Borrowing for College: A Comparison of Long-Term Debt Financing between Public and Private, Nonprofit Institutions of Higher Education

Institutions of higher education provide an excellent opportunity to compare long-term debt financing in the nonprofit and public sectors. The proposed models explain the long-term debt per student at public and private-nonprofit research universities. Student enrollment, enrollment growth, total assets, and revenue variables as a group all influence debt levels. The strongest predictors of debt balances are the fixed characteristics of the universities themselves. Empirical evidence from the university sector also suggests the absence of a powerful arbitrage incentive to issue debt.