October 21, 2010
DeKalb, Ill. — The NIU Board of Trustees today approved the sale of Build America Bonds to provide $112 million to fund improvement projects across campus.
Revenue from the bond sale will help the university improve parking for commuter students, create a state-of-the-art intramural athletic complex, modernize residence halls and pay to repair and remodel one of the students’ favorite buildings, the Holmes Student Center.
“The projects funded by this bond sale will benefit students across campus,” said NIU President John Peters. “And by taking advantage of federally subsidized Build America Bonds, we will be able to significantly lower the cost of that work – a savings that will directly benefit our students.”
All of the projects funded by the bond sale are essential to meeting NIU’s goal of becoming the most student-centered research university in the Midwest by 2020.
“Our students deserve top-tier facilities, and these projects will enable the university to better meet the changing needs of students in the 21st century,” Peters said. “This work will ensure that we provide the best learning and living environment possible – from technologically sophisticated residence halls with modern amenities, to comfortable, functional public spaces and a technology infrastructure that keeps the university functioning efficiently.”
The Build America Bonds are the key to making the projects possible.
Created as part of the American Recovery and Reinvestment Act, Build America Bonds are a type of municipal bond that carries special tax credits and federal subsidies for either the bond issuer or the bondholder. They reduce the cost of borrowing for state and local government issuers and governmental agencies by subsidizing 35 percent of the cost of interest.
The university calculates that the bonds will allow NIU to save nearly $36 million in principle and interest over the life of the 30-year bonds. To take advantage of those savings, the university must issue bonds before the program expires Dec. 31, 2010.
“This was an opportunity not to be missed, and we are delighted that the NIU Board of Trustees moved quickly to approve this plan,” Peters said.
Projects that will be financed by the bonds will include the following:
Additional proceeds from the bond sale will be set aside for infrastructure improvements.
Planning work on these projects will begin almost immediately, and most of the work will be completed by 2015.
As with major campus improvement programs in the past, the Build America Bonds will be paid for through a graduated increase in the student revenue bond fee. Students living in residence halls also will pay a modest surcharge to support these bonds.
The charges, which will begin appearing on student bills in Fiscal Year 2012, will be phased in over a four-year period. In FY2012, students carrying 12 credit hours or more will pay $2.50 per credit hour. That fee will increase to $3.50 per credit hour in 2013; $4.75 per credit hour in 2014; and $6 per credit hour in 2015. These are “not to exceed” rates. Depending on the final pricing of the bonds, the actual rates could be even lower.
Since a significant portion of the renovation and refurbishing is occurring throughout the residence halls as a result of this bond issue, students living in the residence halls will be charged a $25 per semester surcharge in FY12; $30 per semester in FY13; $40 per semester in FY14; and $50 per semester in FY15.
“We do not take lightly any action that increases the cost of education for our students,” said Peters. “In this case, however, the good news is that, thanks to the NIU Board of Trustees vote to approve the use of Build America Bonds, those costs will be reduced for our students by tens of millions of dollars.”
Media Contact: Brad Hoey, NIU Media Relations & Internal Communications