It has long been speculated by financial observers that the next fiscal bubble to pop may be in higher education, much like the housing crisis of last decade.
This week a new report from the Roosevelt Networks will only add to dreary prognostications. The report examines the toxic financial deals universities and colleges are engaging in with Wall Street, including interest rate swapping.
Financial Times defines an interest rate swap as a contract to exchange fixed payments for floating payments linked to an interest rate, and is generally used to manage exposure to fluctuations in interest rates. They can be profitable, however, if markets move in an unexpected way, they can also produce losses.
With all the growth higher education institutions are experiencing, it would not be hard to believe there are some bad financial dealings underpinning the pristine facade. The numbers from the report are staggering. They used a…