BY JONATHAN POLSON
At the end of the 2012-2013 school year, the University of Mary Washington’s debt on state bonds totaled to $83 million. With the addition of the $55 million Campus Center, the school’s current debt total is approximately $138 million.
Debt service is the amount of money owed on state bonds issued to UMW by the Commonwealth of Virginia for construction of new buildings and other auxiliary projects.
A 9(d) revenue bond is one of three bonds issued by the Commonwealth to fund construction and renovation projects. 9(c) and 9(d) bonds must be repaid by “campus users of the projects, primarily students,” and, more specifically, 9(d) bonds must be repaid by “general revenue of the institution,” according to a report by the Joint Legislative Audit and Review Commission of Virginia released on Sept. 9.
The report listed the total cost of 9(d) debt-funded projects at Virginia public institutions. Comparatively, schools with undergraduate enrollment sizes similar to UMW possess slightly less debt. Christopher Newport University’s total debt totaled $88,335,000 and the College of William and Mary’s debt amounted to $112,183,000. Schools with greater undergrad populations than UMW have nearly twice the amount of debt. James Madison University, with 18,000 undergrads, possesses $309,654,000 in debt and Virginia Commonwealth University’s debt, with 24,000 undergrads, totals $266,302,000.
“On average, student fees cover 90 percent of the total auxiliary enterprise debt service across the 15 [Virginia public] institutions,” the report stated.
Students at UMW pay a debt service fee as a part of their tuition, according to Richard Pearce, vice president for administration and finance.
In the 2012-2013 school year, a fulltime, in state, residential student paid approximately $1,700 as a debt service fee.
At UMW, these fees are allocated from students’ tuition, comprehensive fees, housing fees and meal plans. Last year, a fulltime, in state, residential student’s debt service fee totaled to roughly nine percent of collected tuition, according to Pearce.
Fees will increase depending upon the addition of new debts and what debts are paid off.
In the 2014-2015 school year, dining fees will increase by two percent, about $70, said Pearce. Additionally, Comprehensive Fees will increase 1.8 percent, about $84, every year until 2018-2019. According to Pearce, these increases will go specifically toward the debt service of the Campus Center.
“It’s something I wish they’d tell you beforehand,” said freshman history major Anna Kumor in regards to the debt service fee. “I’m an out of stater, and it’s kind of expensive.”
Junior English major Storm Prince said he assumed rising tuition prices correlated with the new construction. “I knew that the payment was going up,” said Prince.
The debt service is similar to mortgage on a house, according to Pearce. It covers old and new projects on campus, and the rates change every year depending on “the age of the project and when the bonds were sold.”
Last year, “debt service was approximately $6.8 million,” said Pearce.
“We’ll be collecting enough to pay off the debt service,” said Pearce. After the bonds are paid off, UMW owns the constructed buildings.
The report listed “debt funded projects authorized between 2002 and 2012” for Virginia public four-year institutions. UMW projects funded by 9(d) bonds include construction of the Campus Center, the Convocation Center, the parking deck and the Indoor Tennis Center, as well as renovation to residence halls, the Battlefield Athletic Complex and Goolrick Field.
“I think it’s irresponsible that we take more money out of student pockets to build new buildings,” said Prince. “It’s inconsiderate to put so much burden on students who aren’t coming [to UMW] for the buildings. They’re coming here for a degree.”
Pearce stated, “[The] Campus Center and dining hall is pretty much the last piece of the puzzle,” in regards to construction of new buildings.
He said the next step is renovation of current academic buildings and residence halls. “I’m going to start on that probably next summer,” said Pearce.
Kumor believes the renovation of existing buildings is a good idea to uphold UMW’s history. Construction at the school should center on “fixing what we already have instead of focusing on new buildings,” she said.