Things That Make You Go "Hmm" in the education arms race

Prep School Admissions
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<p>The facilities arms war of the last decade or so is killing higher education, just at a time when online education is poised to swell. Harvard, the nation’s wealthiest institution of high ed, carries $6 BILLION of debt? Wow.</p>

<p><a href=“http://www.nytimes.com/2012/12/14/business/colleges-debt-falls-on-students-after-construction-binges.html?adxnnl=1&smid=fb-share&adxnnlx=1355494285-AJHS3hktSZoADevIVTSrAw[/url]”>http://www.nytimes.com/2012/12/14/business/colleges-debt-falls-on-students-after-construction-binges.html?adxnnl=1&smid=fb-share&adxnnlx=1355494285-AJHS3hktSZoADevIVTSrAw&lt;/a&gt;&lt;/p&gt;

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<p>As Harvard’s endowment is $30 billion, I wouldn’t worry in Harvard’s case.</p>

<p>[2012</a> Harvard endowment results:value declines to $30.7 billion, return flat | Harvard Magazine](<a href=“http://harvardmagazine.com/2012/09/harvard-endowment-declines-to-30-7-billion]2012”>http://harvardmagazine.com/2012/09/harvard-endowment-declines-to-30-7-billion)</p>

<p>[Harvard</a> Swaps Are So Toxic Even Summers Won?t Explain (Update3) - Bloomberg](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>

<p>In June, 2005, Harvard had an endowment of $22 billion. In June, 2012, Harvard had an endowment of $30 billion. If you can ignore the high of over $36 million just before the crash, an increase of 30% over 7 years is not too bad.</p>

<p>A good part of the debt likely arose from the bonds Harvard sold to terminate existing swaps agreements in 2008. (see Bloomberg article above.)</p>

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<p>With large endowments and such low interest rates, it makes sense to take on some debt.</p>