Students pay $110 fee each semester to pay off construction debt over the next 25 years
By Emily Williams, Senior Staff Writer
After undertaking several building and remodeling projects over the past few years, Miami University has racked up a substantial amount of debt - $656 million of it, to be exact. That figure represents the university's amount of outstanding debt as of June 30, 2014, according to David Creamer, Miami's Vice President for Finance and Business Services.
Miami has been renovating many of its buildings since the 2009 launch of the "Miami Makeover" project, aimed at updating dorms, dining halls and educational buildings that were constructed 60 to 100 years ago. Creamer believes that, despite the heavy accumulation of debt from the building projects, the university has been relatively frugal.
"The debt is an authorization that the board of trustees of the university makes based upon a set of projects that they feel the necessity to undertake," Creamer said.
One of the university's most debt-incurring ventures, the Armstrong Student Center (ASC), which opened in February of last year, cost $53.1 million to construct. Although the center has become an integral part of Miami's campus, some of the expenses to design and decorate the building have been questioned.
For example, the old-fashioned diner-style chairs for the center's Pulley Diner originally came in black leather. However, fearing that the color scheme was more indicative of the University of Cincinnati than Miami, President David Hodge requested the 82 chairs be reupholstered for a total cost of $12,450, Creamer confirmed.
Although donations alleviated some of the cost of building ASC, Miami students will be paying off the balance for the next 25 years. Students are charged a $110 fee each semester to pay off the debt incurred by the project.
Phase Two of the Armstrong Student Center, currently in progress, will cost an additional $18.8 million. The project will include the renovation of Kreger Hall and construction of a two-story atrium with an overhead walkway connecting ASC and a renovated Culler Hall. The facility will host Miami's Office of Career Services, an Associated Student Government chamber, and a sports grill restaurant and game room.
A recent article in the Dayton Daily News about Miami's debt suggested the spending is largely a means of competing with other peer universities for prospective students, but Creamer insists this is not the case.
"We're simply trying to make sure that when students arrive here they have an adequate place to reside during primarily their first two years on campus," Creamer said.
Rachel Zetwick, a first-year from Colorado, picked Miami primarily for its academics, but recalls the emphasis put on ASC and its many amenities when she first looked into coming here.
"I think they stress that a lot for out-of-state students," Zetwick said.
With increasing debt comes an increasing need for the school to keep its credit ratings high. One way to indicate a university as a stable source of revenue is a larger number of students coming from out-of-state. At Miami, out-of-state students pay more than double what Ohio residents pay for tuition. According to a Peterson's report, 32 percent of Miami students are from out-of-state.
The Board of Trustees has recommended not expanding the debt any further at this time. Currently, they are renovating buildings in East Quad and renovation on North Quad will start soon. There is already funding in place for those projects, as well as an additional $100 million reserved for projects that have not yet been determined. However, Creamer insists students shouldn't expect another fee on their tuition bill for these projects.
"We don't have any special fees or anything else in place," Creamer said. "To help us retire this, we think it can be done with the standard room and board payments that students make."
The focus of the "Miami Makeover" has been on renovating instead of rebuilding. Remodeling an older building can be done for about 65 to 70 percent of the cost of constructing a new facility, Creamer said. He believes the university has been conscientious in these remodels, focusing on reworking older dormitories for students and their modern technology.
"We believe that the more appropriate path here is to make sure that our facilities are modern and safe, but at the same time we're not elaborate in the kinds of improvements and amenities that we're providing," Creamer said.
Junior Darice Chapel said she is concerned by the debt the university has undertaken to fund these projects, especially considering the amount which has gone toward building and renovating non-educational facilities.
"I can live in the nicest dorm in the world, but at the end of the day, I'm going to leave that dorm, and the education is what I'll take with me," Chapel said.
$656 million is a daunting number, but Creamer said he does not see the current debt as a major concern.
"These cycles with debt are things that aren't uncommon. It occurred back in the 50s and 60s when some of the original residence halls were built," he said. "Now that we're having to modernize those, it requires debt again."