A Calculated Gamble Pays Off: Villa Julie College Bets $101-Million of Debt on its Future

Audry Williams June write in the Chronicle about how Villa Julie College (Baltimore) did more than just some branding work. Requires subscription and registration for access:

Three years and a total of $101-million in debt later, those apartments and three more residence halls with room for another 606 students now sit on Villa Julie's second campus. Known as Villa Julie College-Owings Mills, the 80-acre site also features a community center, a dining hall, a two-story academic building that houses the School of Graduate and Professional Studies and several administrative offices, and a sports-and-wellness center fashioned from what used to be a practice facility for the NFL's Baltimore Ravens.

The college's experience shows how carefully calculated debt can leverage quick institutional change and enrollment growth. Villa Julie's approach to growing its student body "is a strategy that a lot of colleges employ," says Michael K. Townsley, a former college chief financial officer turned consultant, who helps colleges develop financial strategies. "You can use the revenue stream from the housing to pay the debt service, and then you can pick up extra revenue from tuition."