So my college is currently in 4 million dollars of debt. I’ve tried finding out how that is even possible for them considering they are land grant university, however they are also an hbcu. Were they misappropriating funds? If they were how are misappropriated funds usually used and what are the consequences of it for colleges?
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It is a huge leap to go from debt to misappropriated funds.
Colleges are like most other organizations. Even if they are a private non-profit, they have board of directors and governance structures to oversee budgets. And they have to submit financial reports. If it is a private for profit, then even more they have to submit records and pay taxes. In any case, the debt alone is not sufficient evidence of financial wrongdoing. Even if they are a public organization, the university is bound by funding rules and oversight by government audits etc.
As with any organization universities rely on funding sources (grants, tuitions, federal/state subsidies) and have costs to pay (salaries etc). In nearly every case, universities will borrow money from banks for major capital expenditures like new building construction or upgrades. 4 million dollars is not a sizable sum of money unless it is a very small college (I’d guess). A faculty of 50 staff alone would easily have their annual salaries exceed this amount.
Consequences? The obvious would be tuition cost increases, reducing the number of classes, closing down departments, cost savings. Many things can be done to cut costs.
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