To read the full page ad in Sunday's The New York Times, one would think that the Ohio State University, home of the Buckeyes, was issung 100-year bonds (they reach maturity in a century) to help students pay for their college educations.

"BUT FOR OHIO STATE," touts the ad's headline, "a new standard would not have been set for financing public education."

While it is not unusual for public universities to issue bonds to pay for both short and long term capital projects -- dormatories, classrooms, infratructure improvements, large and small -- Ohio State -- or should we say, THE Ohio State University (so as not to confuse the school with the other Ohio State University, we suppose) -- became the first public university to issue century bonds, valued at $500 million.

With this, Ohio State's total indebtedness is now more than $2 billion (yes, we said billion), with interest on the century bonds alone expected to be in the neighborhood of $2.4 billion (yes, you read that right) over the bond's lifetime. [And you were worried about getting buried under your student loan debt!]

Is it any wonder the cost of college is through the roof, and going nowhere but up year after year?

While Ohio State's costs are relatively low as colleges go -- $19,926 for tuition, fees, room & board for Ohio residents, $34,974 for out-of-staters -- the interest on those bonds, not to mention principal, has to be paid by someone, somehow. OSU, on its website, says students should expect 5-10% increases in costs annually. What does that mean for the children of this generation's college grads? You do the math!

Now, let's be fair. Modernizing campus with the latest technology, state-of-the-art facilities, and an infrastructure that befits a major research institution clearly enures to the benefit of students, academically and otherwise.

Still, billions of dollars of debt, which won't be paid off for 100 years, with more borrowing likely -- assuming no one leaves a cool billion or three in his will to the ole alma mater -- to finance public higher education down the road.

And what does a full page ad, on the back of the Sunday Business section of The New York Times, no less, run? A mere, pittance, we imagine, compared to the application fees this "new standard...for financing public higher education" will bring in. The ad may be a smart marketing move for OSU, if not somewhat disingenuous in its approach. The billions in debt, however? Not all that smart.

We see what happens when governments borrow beyond their means. And families? Buy on credit today. Have that huge credit card bill at the end of the month. Can bankruptcy be far behind?

We don't much like debt -- for students or for public entities -- though we do realize that borrowing today to fund the future is sometimes, perhaps too often, a necessary evil.

How much debt is too much debt? When and where does the buck, if not the Buckeye, stop? And what are the lessons, let alone the lagacies, we are passing down to future generations of students (as well as the taxpayers of Ohio, and the other states that bond beyond their means to repay)?

Our advice to students is to borrow only when absolutely necessary, and then, to borrow carefully. Avoid going into debt, if at all possible, but if you must borrow to pay for college, do not borrow more than you will be able to pay over a reasonable period of time. And, for goodness sake, do your homework and search out/apply for every last scholarship you qualify for. There are, after all, billions of dollars in scholarship money out there, most of it unclaimed!

The piper, from whom we borrow, must eventually be paid. Guess whose pocket that comes out of?

Maybe, just maybe, Ohio State should have checked out fastweb before borrowing $500 mil. A free ride to college for colleges themselves? Why not? Better that than to finance the future with a debt that burdens us all! 

The views and opinions expressed in this blog are solely those of The College Whisperer, the authors of referenced articles and websites, and such guest bloggers as may appear.
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