When universities can get out of debt and become profitable again
Harvard and MIT are on the cusp of a historic turnaround.
The two universities announced a series of aggressive steps to help their campuses become more profitable and profitable again, and to reduce their debt loads.
The two are the first institutions in the country to declare bankruptcy.
On Monday, the Harvard-MIT Joint Venture announced the $1 billion purchase of a major part of a company that made software that helps universities secure and monetize their intellectual property.
Harvard and MIT also said they will begin an orderly restructuring process that includes paying back the debt of the $2.5 billion company and agreeing to reduce debt loads by 30%.
“We will make the largest possible investments in our intellectual property and in our research,” Harvard University President Drew Faust said in a statement.
“We will also continue to work with the government and our private sector partners to accelerate our turnaround plan to achieve the most efficient and successful outcome possible.”
This deal comes as universities across the country are struggling with mounting debt loads, a trend that is likely to accelerate as colleges and universities make more money and raise tuition.
“This deal demonstrates that our universities can return to profitability, with a lower debt burden, as they continue to grow,” Faust said.
MIT, Harvard, and Carnegie Mellon have all filed for Chapter 11 bankruptcy protection since 2014.
President Faust and Harvard President Drew G. Faust announced a deal with the two universities, the acquisition of the company, and the debt reduction measures announced Monday.
The deal is expected to close by the end of the year.
Last year, Harvard and its largest rival, MIT, announced that they would merge, merging into the newly formed Massachusetts Institute of Technology (MIT).
The announcement comes as students are facing a growing number of financial hardships.
Students at Harvard and at MIT face a higher cost of attendance, as the two institutions rely on students to pay for their education.
The combined institutions reported $6.1 billion in debt in 2016.
In a separate statement, Harvard University president Drew Faust also said the university will begin to cut down on debt as the financial crisis continues to worsen.
The school’s total debt, which included more than $2 billion in uncollected loans, is now more than half of what it was in 2008.
The combined university will have a total debt of $18.5 million by the close of 2019.
As of the end, the schools debt is less than $18 billion, down from $23.6 billion at the end at the close in 2012.