USC touts financial strength as construction debt climbs to $1.7B

COLUMBIA — The University of South Carolina’s debt load will more than double over the next four years as it embarks on a massive construction spree, which includes a revamp of the student center, new dormitories and football stadium upgrades.

Debt taken on to build those projects is expected to peak at $1.7 billion in 2030, chief accountant Mandy Kibler told the university system’s governing board Friday. In that year, the school expects to make $140 million in principal and interest payments on that debt, compared to the $60 million in annual payments it’s making now.

USC leaders tout buildout, enrollment growth amid broader higher ed headwinds

In all, this takes up about 80% of the school’s operating revenue, Kibler said.

But Kibler tried to put trustees at ease about the increase, saying the university spent years preparing for this moment.

“While this is a substantial increase — and I can see on all of your faces as you actually see this visually — it is why we have been really planning very intentionally, looking ahead over the last six to seven years, so that we can ensure that we have full repayment,” she said.

One project the university won’t have to finance is its proposed $350 million neurological hospital with one-time funding in the last state budget. The school plans to break ground on the hospital sometime next year.

Kibler reiterated that the school has the confidence of Wall Street ratings agencies.

“We really have a very strong university,” she said. “In the last two ratings calls that I’ve had, they have been very surprised at how strong we are and what our balance looks like.”

In particular, she said, the agencies were impressed by the number of students applying annually to attend the state’s largest university system: 69,000 applicants to the main Columbia campus this fall.

Total enrollment reached nearly 42,000 in Columbia and more than 61,000 across the system’s eight campuses statewide.

In the last school year, the university brought in $2.1 billion in revenues, compared to the $1.9 billion it paid out in operating expenses, Kibler said.