Key Takeaways
- • Harvard is planning to borrow $675 million through a Massachusetts municipal bond agency, with the preliminary offering statement distributed to Wall Street investors, according to the New York Post's On The Money column.
- • Harvard holds triple-A ratings from Moody's and Standard & Poor's, indicating its ability to repay debt remains strong despite its dispute with the Trump administration.
- • The $56.9 billion endowment returned 11.9% for the fiscal year ended June 30, 2025, beating its 8% long-term benchmark but trailing the S&P 500's roughly 13% gain over the same period.
- • Applications for the 2025-2026 academic year fell to roughly 47,800 first-year applications, down 17% from 2021-2022, while first-year enrollment declined more than 6% over the same span.
- • Harvard's president Alan Garber disclosed a continued university-wide hiring freeze, flat salaries, "painful layoffs," and scaled-back projects and expenditures.
Summary
Harvard University is planning to borrow $675 million through a Massachusetts agency that issues tax-advantaged municipal bonds on behalf of qualifying private entities, including universities. According to the New York Post's On The Money column, the borrowing is largely intended to refinance older, higher-cost debt and fund a small number of capital projects, so the issuance itself is routine. The preliminary offering statement, however, contains disclosures that the column characterizes as a sobering picture of the university's finances as it contends with the Trump administration over government probes, the throttling of federal research funds over campus antisemitism, and other political disputes.
Despite speculation on the political right that Harvard faces financial distress, the school retains the highest credit ratings, triple-A from Moody's and Standard & Poor's. Its $56.9 billion endowment returned 11.9% for the fiscal year ended June 30, 2025, exceeding the school's long-term 8% benchmark. However, the return trailed the S&P 500's gain of roughly 13% over the same period. The prospectus said endowment results in fiscal 2025 were dampened by a lower allocation to public equities relative to private equity, and the column notes the broader sector's concerns about private equity returns, illiquidity, and exposure to private credit loans to software companies that could be affected by artificial intelligence. The document did not state whether Harvard holds private credit investments.
Admissions data in the document show the school received roughly 47,800 first-year applications for 2025-2026, down 17% from 2021-2022, and first-year enrollment fell more than 6% over the same period. Harvard attributes part of the decline to its reinstatement of standardized testing, which ended a Covid-era test-optional policy, and says current incoming classes roughly match pre-test-optional levels. The all-in cost of one year of undergraduate study is $86,926, a 16.6% increase over five years, and the admit rate is around 4%.
On the balance sheet side, Harvard president Alan Garber's statement included in the offering documents describes a continuing university-wide hiring freeze, flat salaries, "painful layoffs," and scaled-back projects and expenditures in response to federal funding reductions. Harvard's money managers, the school says, are managing for long-term returns within strict risk parameters rather than maximizing returns on every investment.
Despite speculation on the political right that Harvard faces financial distress, the school retains the highest credit ratings, triple-A from Moody's and Standard & Poor's. Its $56.9 billion endowment returned 11.9% for the fiscal year ended June 30, 2025, exceeding the school's long-term 8% benchmark. However, the return trailed the S&P 500's gain of roughly 13% over the same period. The prospectus said endowment results in fiscal 2025 were dampened by a lower allocation to public equities relative to private equity, and the column notes the broader sector's concerns about private equity returns, illiquidity, and exposure to private credit loans to software companies that could be affected by artificial intelligence. The document did not state whether Harvard holds private credit investments.
Admissions data in the document show the school received roughly 47,800 first-year applications for 2025-2026, down 17% from 2021-2022, and first-year enrollment fell more than 6% over the same period. Harvard attributes part of the decline to its reinstatement of standardized testing, which ended a Covid-era test-optional policy, and says current incoming classes roughly match pre-test-optional levels. The all-in cost of one year of undergraduate study is $86,926, a 16.6% increase over five years, and the admit rate is around 4%.
On the balance sheet side, Harvard president Alan Garber's statement included in the offering documents describes a continuing university-wide hiring freeze, flat salaries, "painful layoffs," and scaled-back projects and expenditures in response to federal funding reductions. Harvard's money managers, the school says, are managing for long-term returns within strict risk parameters rather than maximizing returns on every investment.
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