An analysis of capital debt and capital debt service at CCCU member colleges and universities 1975-1994

This research explored and analyzed capital debt and capital debt service at small private liberal arts colleges and universities, and the impact of the capital debt and capital debt service over a twenty year period, 1975-1994.

Eighty-two small private liberal arts colleges and universities in the United States were studied. Data were obtained for the years 1975-94 from the Computer-Aided Science Policy Analysis and Research (CASPAR) database. Descriptive statistics, financial ratios, and regression analysis were utilized to analyze the relationships between capital debt and capital debt service and selected indicators of financial health. All financial figures were converted to constant 1987 dollars to control for inflation.

The findings indicated that neither capital debt nor capital debt service increased significantly between 1975 and 1994. Overall, the financial balance sheets of the colleges and universities in this study became stronger from 1975 to 1994, in large part because of higher enrollments and growing endowments. Overall, between 1987 and 1994, capital debt increased at the institutions studied. Colleges and universities with lower per student educational expenditures tended to have higher levels of capital debt, suggesting that capital debt is negatively related to various fiscal expenditures at colleges and universities.