Borrowing during a time of crisis: Examining institutional debt during the Great Recession and COVID-19

Executive Summary
Insights Report

Although debt is an important tool institutions use to meet strategic goals, many higher education stakeholders have only a limited understanding of the process of institutional borrowing.


Institutional borrowing, or the debt a college takes on as an organization, is an understudied but important tool for colleges to meet strategic goals. Widespread crises, such as the Great Recession and COVID-19, can impact an institution’s financial health and create instability that may alter debt-related planning and access to debt markets. This study examines how postsecondary, nonprofit institutions make borrowing decisions during times of crisis.

Key Insights

  • HBCUs and public institutions were more likely to increase total debt during the Great Recession.
  • HBCUs have historically been underfunded, and the financial strain of the recession likely forced these colleges to access debt markets to ensure they continued to operate.
  • Public institutions faced declining state support during the Great Recession, which may have impacted their need for debt to fund certain projects that had been cut from state budgets.
  • Overall, institutions that increased debt during the Great Recession appeared to strategically invest in opportunities that allowed them to better serve students.

The findings demonstrate how CFOs use and structure debt, how they learn and understand from others’ experiences, and the role CFOs play in educating institutional stakeholders to get debt approved.


The authors examined changes to over 2,000 postsecondary, nonprofit institutions’ capital structures after the exogenous shock of the recession, using data from the Integrated Postsecondary Education Data System. They also analyzed changes in debt and leverage across institutional characteristics.



Staci Gusakova

Ithaka S+R

Mya Haynes

Ithaka S+R

James Dean Ward

Ithaka S+R

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