The Pac-12 conference is planning a loan program where schools could borrow up to $83 million each to cover athletic department losses in the event of a canceled football season.
The Mercury News first reported on the program this week. The report called the loan program an “escape hatch” for athletic departments that would face huge revenue losses if college football is canceled amid the coronavirus pandemic.
The loan program would allow each of the Pac-12’s member schools to borrow up to $83 million from the conference, to be paid back over 10 years at a rate of 3.75 percent interest. Individual schools could decide whether they want to participate in the program or not, but if all 12 member schools borrow the maximum, the program would lend $996 million.
College football is a revenue driver for many athletic departments, and the money brought in by ticket sales and media rights help athletic departments fund non-revenue sports like swimming & diving. With the coronavirus pandemic looming, schools and conferences are struggling with decisions on whether to hold fall sports this year. Many fear that a canceled football season would force schools to cut non-revenue sports to balance budgets, but a loan program like the one the Pac-12 is planning could give schools an alternative option.
It’s already been a brutal offseason for college swimming, with at least four Division I programs (Boise State women, UConn men, Dartmouth women & men, East Carolina women & men) being cut and another (Western Illinois women & men) being suspended indefinitely. You can see a full list of the college programs cut and suspended here.
So far, many athletic conferences have opted to postpone the start of fall sports and/or cancel non-conference schedules. That includes the Pac-12, along with Power-5 conferences the Big Ten, ACC, and SEC.
1) I’m surprised this isn’t coming in the form of a government back loan program. Which is something I’d almost expect the NCAA and Conferences to lobby government to try and provide.
2) I’m a little surprised the interest rate is that high.
Since they have a history of burdening their students with loan debt due to the high prices of services rendered, I guess it’s only fitting they take on some debt themselves.
I wonder if the schools will be able to pay it back?
No they will default and pass the debt on to the middle class.