California University wants to buy back on-campus dorms using $76 million in issued bonds

MarketsAssociated Press

A state-owned university wants to buy back its on-campus housing in an effort to reduce room costs.

Officials said Wednesday that the California University of Pennsylvania, in southwestern Pennsylvania, has asked the State System of Higher Education to issue up to $76 million in bonds to cover outstanding debt against six dorms that hold 1,497 students, the Pittsburgh Post-Gazette reported (http://bit.ly/1e5jpdW ).

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The dorm buildings are on land leased by the university to a university-affiliated organization that built them and pays the debt through variable-rate bank financing.

The system's board of governors will start voting on it Tuesday, and if it's approved the university would pay them back with student housing income. Robert Thorn, Cal U's vice president for business and finance, said the university's education and general budget would not be affected.

Cal U is one of 14 state-owned universities in the state. System spokesman Kenn Marshall said he can't say if others will ask to buy back their dorms.

Thorn said that if the university can lower operational costs it can lower room rates. It cost a student $6,592 in 2014-15 for a standard room.

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Information from: Pittsburgh Post-Gazette, http://www.post-gazette.com