CSU Trustees Discuss Debt Levels

CSU Trustees continued their destructive lean into the corporatization of higher education at their September meeting last week.

Not only did trustees and CSU management work to interrupt, disrespect, and cut off public speakers after an undemocratic one minute at the microphone, they patted themselves on the back for having a “low” amount of debt.

The CSU paid $440 million to debt obligations during the 2024-25 year, according to a debt service presentation by CSU Executive Vice Chancellor Steve Relyea. The majority of the CSU’s debt consists of issuing bonds for development projects such as sports stadiums, student housing, and administration buildings.

Any funding from the operating budget that pays for debt is money not spent on academic and support programs like student counselors, Relyea said.

During the discussion, Relyea noted that CSU revenues can be pledged as security when issuing debt. Credit rating agencies like Moody’s actually incentivize universities increasing student tuition and fees because it allows more revenue to be used as collateral when securing debt. The portion of the operating budget going toward debt payments has increased 29 percent over five years, from $341 million to $440 million.

Perhaps not coincidentally, trustees approved a 34-percent student tuition increase over five years starting this fall.

Rising student tuition and fees combined with the crowding out of academic and support programs for debt financing means students are paying more and getting less. Class sizes get bigger while course sections are slashed. Waitlists to see mental health counselors grow. Faculty job loss and hiring freezes mean larger workloads for faculty who remain, leaving them less time for individualized student support. Students take on more loan debt and CSU administration policies further contribute to the racial wealth gap.

During the summer, Sacramento State administrators pushed through a campus-based student fee increase despite student opposition. Weeks later, President Luke Wood announced plans to build a new football stadium.

Though administrators claim taxpayer dollars and student fees won’t fund the stadium or other development projects likely coming down the pike at other campuses, Sacramento, Fresno, and San Diego States are being courted to join the Pac-12 football conference. The universities would have to pay exit fees to ditch the Mountain West Conference.

“…Paying $20 million to join a conference that has only six members and has yet to sign a media rights contract, where the bulk of revenue is typically derived, presents a financial risk,” according to reporting from the San Diego Union Tribune.

Financial decisions made by management appear to prioritize building sports arenas and impressing credit agencies over the core academic mission of the CSU.