Penn takes out $500M credit line amid federal funding cuts
A Penn spokesperson said the move helps the university's credit match "its current financial scale.” Harvard and Yale have also made moves, selling bonds as President Donald Trump targets colleges.
Amid federal funding cuts and other changes ordered by the Trump administration, the University of Pennsylvania has taken out three lines of credit worth $500 million.
The move, approved by the board of trustees this month, came after a series of actions targeting Penn — including pausing $175 million in federal funding because Penn permitted a transgender athlete to compete on the women’s swim team in the past, and the potential loss of $250 million in research funding from the National Institutes for Health.
The banks with which Penn took out the lines of credit, and the interest rates it agreed to, were redacted from publicly-available filings, dated June 3. The financial transaction was first reported by Bloomberg News.
A spokesperson said the move came as part of Penn’s “regular financial management.” The last expansion of university credit lines happened in 2009, when Penn’s revenue was $5.2 billion. It is now $15.8 billion.
“The recent expansion brings the university’s credit resources more in line with its current financial scale,” the spokesperson said.
Penn is not the only university that has increased its lines of credit as President Donald Trump’s administration aims to cut funding to higher education. Harvard and Yale, among other prestigious colleges, have sold bonds; Brown took out a $300 million private loan.
In addition to tapping the capital market, Penn has signaled some belt-tightening — including cutting graduate admissions by a third, over the objections of some faculty and students. The university also ordered a hiring freeze in March.