Should’ve Gone to Freecreditreport.com. Or not.

Here’s a quotation from an article from yesterday’s D regarding the drop in the College’s credit rating and the cost it incurs:

Days before the College plans to issue over $400 million in bonds, Standard & Poor’s downgraded the College’s credit rating to double-A plus, the second highest rating, from its prior triple-A status. The change will likely have only a marginal effect on the College’s upcoming bond issue, according to Adam Keller, Dartmouth executive vice president for finance and administration.

Because of the downgrade, Dartmouth will incur “a very modest cost” — interest rates will increase between one and two-tenths of one percent on the new bonds, Keller said in an interview with The Dartmouth.

That doesn’t sound too bad, does it? The College took some risks, gets its credit rating lowered, but it’ll shrug it off, right?

Let’s crunch some numbers here. 0.1-0.2% on those loans means that the that the College will pay out about $400,000-$800,000/year of extra interest on the $400,000,000 loan – in other
words, the annual cost of 3-6 full professors. Unless your name is Tim Geithner or Henry Paulson, it’s hard to call that amount of money “modest.”

In contrast, those flat-screen TVs in Collis and FoCo that are a favorite target of editorials in the D are probably cost $3,000-5000 each. I’m not sure what model they are, but a quick trip to Best Buy’s website seemed to give a price range for the big screen models at around $2,000-3000, even though they were on sale. If there was something that students should be upset about, TVs in Collis and FoCo ought to be a bit lower on their list.