Dartblog

A four-part series: Part 1, Part 2, Part 3 and Part 4.

We’ve commented repeatedly on the College’s exploding indebtedness: jumping from $288 million in 2001 to $945 million in 2010. Dartmouth is not alone in the Ivies in going into hock to finance its operations and construction budgets in the 21st century — but as this space has illustrated, when everyone in the Ivy League sins, we seem to sin a fair bit more.

In 2000, for every dollar in the endowment, Dartmouth had 11 cents of debt. As you can see below, we were not as prudent financially as Harvard and Princeton, but we were close to being on a par with Yale, and we managed our finances better than Columbia, Penn and Cornell (Brown’s fiscal 2000 financials are no longer available):

By 2010, after a decade of terrible financial decisions, we had the second highest debt to endowment ratio in the Ivies: 32 cents of debt for every dollar in the endowment. Penn seems to have wrestled its finances under control (it can be done), even as Cornell borrowed with abandon:

The above are not simply abstract financial statistics. Each borrowed dollar will need to be re-paid with interest out of future budgets — thereby depriving tomorrow’s students and faculty of the resources to pay for great education.

How sad to see that after becoming financially stronger each year in the 1990’s, Dartmouth has become financially weaker over the past decade, with no signs yet of a turnaround.

Note: Where has all of the borrowed money gone? Surprisingly, though the College completed a $1.3 billion capital campaign in 2009, a significant part of the $400 million loan that the College took out in that year still went to capital projects, as The D described after an interview with Adam Keller:

The lion’s share of funds acquired through the tax-free issue — $121 million — will support the construction of the Class of 1978 Life Sciences Center, Keller said. The recently completed renovations to New Hampshire residence hall will require $12 million, and an additional $12 million will fund a project to replace the boiler and increase capacity at the College heating plant.