Dartmouth plans to borrow more than $450 million through the sale of $300 million in taxable bonds and $156 million in tax-exempt bonds to fund the College’s “long-term capital plan,” College spokesperson Jana Barnello wrote in a statement to The Dartmouth.
“The proceeds will contribute to funding housing construction and renovation, energy transition and other institutional priorities,” she continued.
Dartmouth’s decision to issue new bonds aligns with a broader trend among peer institutions. Though higher education institutions have issued bonds in the past, the volume of bond issuance this year are record-breaking — up 36% compared to the same period last year, according to Bloomberg.
Barnello said bond sales are “common” for universities.
“Dartmouth last accessed the debt markets in 2016, and issuing bonds remains a common, prudent way for institutions to fund significant capital projects as part of responsible financial planning,” Barnello wrote.
Bonds are a form of debt security used as a loan to raise immediate capital for projects, economics professor Andrew Levin said in an interview with The Dartmouth. Investors purchase “slices of the pie” from the borrower and are repaid over time through interest and eventual return of principal, he explained. This structure provides up-front capital for specific projects, while also allowing institutions — such as hospitals, universities and other private corporations — to distribute the cost of capital-intensive projects over many years.
The taxable bonds will be sold by the College itself, while the tax-exempt bonds will be sold through the New Hampshire Health and Education Facilities Authority, according to investment research company Morningstar. HEFA’s bond sales were issued as public transactions, Barnello wrote in a follow-up statement.
Revenue raised from these tax-exempt bonds must be used for pre-approved purposes — in this instance, projects such as residence hall renovations and energy transition initiatives. The bonds issued directly by the College are considered taxable investment income because Dartmouth is a private corporation, Levin said.
According to economics professor Bruce Sacerdote, borrowing through bond issuance can be a “great and sensible” strategy for funding projects with long-term payoffs, particularly when the College aims to preserve cash or avoid selling existing investments.
“The College’s revenues and the savings from the projects are so stable that often it makes sense to issue debt at very low rates… to fund the project,” Sacerdote wrote in a statement to The Dartmouth. “… By not having to liquidate other high returning assets to make these capital investments, we are able to still benefit from the returns on those existing assets.”
In a July 10 credit analysis, Moody’s Ratings analysts rated Dartmouth’s securities Aa1 — the second-highest possible grade for long-term investments.
“While capital needs are fueling debt increases and accelerating the pace of capital spending, Dartmouth’s very strong financial profile will support manageable debt relative to scale,” Moody’s analysts wrote. “An evolving political landscape adds potential operational and financial complexities.”
Sacerdote wrote that the College’s high bond rating reflects a “very sensible and conservative approach in the amount of debt issued and our total interest costs.”
Other universities — including Harvard University, Princeton University and Stanford University — have collectively sold more than $24 billion in taxable municipal bonds in 2025, according to Bloomberg. Some of these high-profile institutions are taking on additional debt to protect their finances as their budgets are threatened by potential federal funding cuts. For example, Massachusetts Institute of Technology vice president Glen Shor wrote in a statement to Bloomberg in May that the university had issued bonds for “additional flexibility” to “ensure it can advance the Institute’s mission in a wide range of conditions.”
Kelsey Wang is a reporter and editor for The Dartmouth from the greater Seattle area, majoring in history and government. Outside of The D, she likes to crochet, do jigsaw puzzles and paint.
Annabelle Zhang '27 is a reporter and editor from New Jersey. In the classroom, she studies Geography and Government modified with Philosophy and Economics. She enjoys creating recipes, solving puzzles and listening to music.
