Had lunch with a sip buddy yesterday and he told me that OU is a billion in debt as a school.

Had not heard anything about this so I looked it up...and, yep, it's true.

Sorry for anyone on the moon in case I have inadvertently bombed it.

Quote:

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The University of Oklahoma is losing $36 million a year as expenses continue to outpace revenues, the incoming president said Tuesday.

"Total debt is almost $1 billion at our Norman campus," said Jim Gallogly, who becomes OU's 14th president July 1. Debt service costs are almost $70 million a year, he said.

"Our debt has more than doubled in the last 10 years as we've been on a building campaign," Gallogly said. "As a result of that, we have a beautiful campus and a lot to be proud of, but during that period of time, we spent approximately $730 million."

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That's what happens when your entire curriculum is doing meth.

Squadron7 said:

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Had lunch with a sip buddy yesterday and he told me that OU is a billion in debt as a school.

Had not heard anything about this so I looked it up...and, yep, it's true.

Sorry for anyone on the moon in case I have inadvertently bombed it.

Quote:

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The University of Oklahoma is losing $36 million a year as expenses continue to outpace revenues, the incoming president said Tuesday.

"Total debt is almost $1 billion at our Norman campus," said Jim Gallogly, who becomes OU's 14th president July 1. Debt service costs are almost $70 million a year, he said.

"Our debt has more than doubled in the last 10 years as we've been on a building campaign," Gallogly said. "As a result of that, we have a beautiful campus and a lot to be proud of, but during that period of time, we spent approximately $730 million."

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Who owns the debt? Can we get a BMA buy the bank and make payment due immediately? Lets bankrupt that campus

That article is 3 years old. Is it even worse now?

were there not any safeguards in place to stop the spending?

someone in leadership has to say "no" at some point

Maybe that's why They mortgaged Riley.

Is this unusual for higher education?
This is the worst industry when it comes to money management.

They're not going to know how to respond when the student loan bubble bottoms out. Gone is the money tree

Squadron7 said:

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Had lunch with a sip buddy yesterday and he told me that OU is a billion in debt as a school.

Had not heard anything about this so I looked it up...and, yep, it's true.

Sorry for anyone on the moon in case I have inadvertently bombed it.

Quote:

---

The University of Oklahoma is losing $36 million a year as expenses continue to outpace revenues, the incoming president said Tuesday.

"Total debt is almost $1 billion at our Norman campus," said Jim Gallogly, who becomes OU's 14th president July 1. Debt service costs are almost $70 million a year, he said.

"Our debt has more than doubled in the last 10 years as we've been on a building campaign," Gallogly said. "As a result of that, we have a beautiful campus and a lot to be proud of, but during that period of time, we spent approximately $730 million."

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So you went to lunch with a sip and talked about OU. What kind of Aggie are you?

J/K Their tuition revenue bonds were recently downgraded but apparently their debt is still serviceable- whatever the hell that means.

https://www.fitchratings.com/research/us-public-finance/fitch-downgrades-university-of-oklahoma-to-a-outlook-to-stable-29-10-2021

From Fitch:

Quote:

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As of Sept. 30, 2021, OU had $854 million in parity GRB's outstanding, and the series 2021 issuance will bring that total to $1.011 billion. MADS is measured at $81.5 million in 2024, and debt service is front-loaded with over 60% amortization by 2035. The series 2021 issuance will extend maturity to fiscal year 2052.

Outstanding OU debt at June 30, 2021 was $967 million, which includes parity GRBs ($890 million, including premium and current portion), capital leases ($41 million), and other notes. Most of the capital leases are through the Oklahoma Capital Lease Improvement Authority, for which the state annually appropriates debt service (but does not pledge to do so). Overall OU debt is fixed rate with serial maturities and a generally declining debt service structure.

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My nephew graduated from OU - said his high school was harder than his OU classes.. for real.. granted he did go to a prep school, but still.

Wearetheaggies said:

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Squadron7 said:

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Had lunch with a sip buddy yesterday and he told me that OU is a billion in debt as a school.

Had not heard anything about this so I looked it up...and, yep, it's true.

Sorry for anyone on the moon in case I have inadvertently bombed it.

Quote:

---

The University of Oklahoma is losing $36 million a year as expenses continue to outpace revenues, the incoming president said Tuesday.

"Total debt is almost $1 billion at our Norman campus," said Jim Gallogly, who becomes OU's 14th president July 1. Debt service costs are almost $70 million a year, he said.

"Our debt has more than doubled in the last 10 years as we've been on a building campaign," Gallogly said. "As a result of that, we have a beautiful campus and a lot to be proud of, but during that period of time, we spent approximately $730 million."

---

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So you went to lunch with a sip and talked about OU. What kind of Aggie are you?

J/K Their tuition revenue bonds were recently downgraded but apparently their debt is still serviceable- whatever the hell that means.

https://www.fitchratings.com/research/us-public-finance/fitch-downgrades-university-of-oklahoma-to-a-outlook-to-stable-29-10-2021

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If his sip friend brought up dildos and he changed the topic to OU then good on him.

Lol. Very good point!

DimebagsGhost said:

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My nephew graduated from OU - said his high school was harder than his OU classes.. for real.. granted he did go to a prep school, but still.

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Your nephew went to a prep school and could only get into OU?!?

Emilio Fantastico said:

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DimebagsGhost said:

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My nephew graduated from OU - said his high school was harder than his OU classes.. for real.. granted he did go to a prep school, but still.

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Your nephew went to a prep school and could only get into OU?!?

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OU does give full tuition scholarships to national merit scholars....

OU's debt rating was lowered from AA- to A+. Texas A&M has a AAA rating.

DimebagsGhost said:

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My nephew graduated from OU - said his high school was harder than his OU classes.. for real.. granted he did go to a prep school, but still.

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In fairness, I also went to a private prep school in Australia (graduating class of 51 people), and my first two years at A&M was repeat and a cake walk. Allowed me to focus on my social scene and alcohol tolerance.

Amount of debt doesn't really mean anything by itself. Wouldn't surprise me if we've taken on debt to fund construction as well. The question is how hard is it to service the debt, does the organization have the ability to pay the interest / pay down the debt.

The credit rating is not a great sign for OU though.

Your buddy might want to google how much debt the University of Texas has. Debt isn't a big deal, especially if OU used it for capital campaigns which it sounds like they did. It is often cheaper to take out a loan rather than spend cash if the cash is invested and making more than the interest on the debt costs.

Aston04 said:

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Emilio Fantastico said:

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DimebagsGhost said:

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My nephew graduated from OU - said his high school was harder than his OU classes.. for real.. granted he did go to a prep school, but still.

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Your nephew went to a prep school and could only get into OU?!?

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OU does give full tuition scholarships to national merit scholars....

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OU recruits and does a very good job of reeling in national merit scholar's at one point they had the highest percentage of national merit scholar's For a public university

This is from 2012. I would guess with the low interest rates, Texas's debt is probably more:

"The UT System's $7.3 billion worth of outstanding debt accounts for 58 percent of the state's total public university debt, according to a report released by Susan Combs, Texas comptroller of public accounts, last week."


https://thedailytexan.com/2012/11/01/ut-systems-debt-accounts-for-over-half-of-texas-total-public-university-debt/

I would guess we're pretty similar.

And are we talking system debt or Athletic Department debt?

A school can be a mess in one and solid in the other.

Most people don't consider their mortgage as indebtedness.

I'm guessing OU's debt is financing buildings and other capital projects.

That's how you get big, expensive stuff built.

Exactly. Debt is a tool to be used. The UT System's outstanding revenue financing debt is just over $6.7B. Ours is nearly $3.4B.

There are tons of factors to consider about whether the debt is being used efficiently (amortization schedule, net interest cost, credit ratings, etc.), but laughing at a major university for having $1B in debt is silly.

Ghost of Bizbee said:

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Is this unusual for higher education?
This is the worst industry when it comes to money management.

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EDIT: NVM, question answered.

Still, seems like poor money management

Seems pretty on brand for OK.

Texmid said:

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That article is 3 years old. Is it even worse now?

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Yes. Its up to a Bazillion dollars now.

I understand everyone has debt, but does everyone also operate on an annual loss as is mentioned in the article?

Noobmaster69 said:

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Squadron7 said:

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Had lunch with a sip buddy yesterday and he told me that OU is a billion in debt as a school.

Had not heard anything about this so I looked it up...and, yep, it's true.

Sorry for anyone on the moon in case I have inadvertently bombed it.

Quote:

---

The University of Oklahoma is losing $36 million a year as expenses continue to outpace revenues, the incoming president said Tuesday.

"Total debt is almost $1 billion at our Norman campus," said Jim Gallogly, who becomes OU's 14th president July 1. Debt service costs are almost $70 million a year, he said.

"Our debt has more than doubled in the last 10 years as we've been on a building campaign," Gallogly said. "As a result of that, we have a beautiful campus and a lot to be proud of, but during that period of time, we spent approximately $730 million."

---

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Who owns the debt? Can we get a BMA buy the bank and make payment due immediately? Lets bankrupt that campus

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And take the land back?

Noobmaster69 said:

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Squadron7 said:

---

Had lunch with a sip buddy yesterday and he told me that OU is a billion in debt as a school.

Had not heard anything about this so I looked it up...and, yep, it's true.

Sorry for anyone on the moon in case I have inadvertently bombed it.

Quote:

---

The University of Oklahoma is losing $36 million a year as expenses continue to outpace revenues, the incoming president said Tuesday.

"Total debt is almost $1 billion at our Norman campus," said Jim Gallogly, who becomes OU's 14th president July 1. Debt service costs are almost $70 million a year, he said.

"Our debt has more than doubled in the last 10 years as we've been on a building campaign," Gallogly said. "As a result of that, we have a beautiful campus and a lot to be proud of, but during that period of time, we spent approximately $730 million."

---

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Who owns the debt? Can we get a BMA buy the bank and make payment due immediately? Lets bankrupt that campus

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Better question is who has a sip buddy?

Operating at a loss should be concerning, but simply having debt doesn't mean anything. The A&M system has over $4 billion in bonds outstanding.

There's a difference between having $1Billion in debt, and being "in debt" $1 Billion.


A young hotshot out of college who lands a $100k job can qualify for a $400,000 home loan. He just took on $400k in debt, but he has plenty of capability to make the payments. Debt is not insolvency.

Noobmaster69 said:

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Squadron7 said:

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Had lunch with a sip buddy yesterday and he told me that OU is a billion in debt as a school.

Had not heard anything about this so I looked it up...and, yep, it's true.

Sorry for anyone on the moon in case I have inadvertently bombed it.

Quote:

---

The University of Oklahoma is losing $36 million a year as expenses continue to outpace revenues, the incoming president said Tuesday.

"Total debt is almost $1 billion at our Norman campus," said Jim Gallogly, who becomes OU's 14th president July 1. Debt service costs are almost $70 million a year, he said.

"Our debt has more than doubled in the last 10 years as we've been on a building campaign," Gallogly said. "As a result of that, we have a beautiful campus and a lot to be proud of, but during that period of time, we spent approximately $730 million."

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Who owns the debt? Can we get a BMA buy the bank and make payment due immediately? Lets bankrupt that campus

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While there may be some commercial bank financing included, I'd guess most of that debt is through bonds with a fixed due date.

Also, given the age of the article, its also likely return on endowment money over the last 3 years has allowed them to pay down at least some of the debt. Athletic department fundraising is separate from this and should have no affect on coaching salaries or hiring. I'm sure OU was willing to match or at least come close (tax issues notwithstanding) what USC offered Riley.

Ulrich said:

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Amount of debt doesn't really mean anything by itself. Wouldn't surprise me if we've taken on debt to fund construction as well. The question is how hard is it to service the debt, does the organization have the ability to pay the interest / pay down the debt.

The credit rating is not a great sign for OU though.

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Excellent point. We have a **** ton of debt from Kyle Field's renovation, etc., but, apparently, we are in excellent shape to continue to pay for it through the 31 to 33 year length of the loan.