Three years ago, Roosevelt University decided to build a 32-story, $123 million skyscraper residence on its downtown Chicago campus; since building the giant dormitory, South Loop Tower has become a student hub for living, studying, and socializing.
It has also become the center of Roosevelt’s financial woes, according to a new report from the Chicago Tribune, which described the building on South Wabash Avenue as “more like a millstone than a monument to Roosevelt’s educational mission.” The building was reportedly a “pet project” of former Roosevelt president Charles Middleton, who started planning the South Loop tower back in 2002 and retired this past June.
Since building South Loop, Roosevelt hasn’t been able to pay off its construction loans. Interest payments have “ballooned” for the private nonprofit university, and tuition revenue has fallen much shorter than what school officials had predicted back in 2009.
The school is now struggling to stay on track of its debt payments, which make up a whopping 11% of the school’s operating budget; the Tribune reported that this is “nearly double the typical debt burden at financially healthy universities.”
The 6,000-student college, according to American School and University, is expected to be drowning in debt for the fifth year in a row. Salary increases for staff members have been frozen, the school’s administration department is looking to lower its spending, and the school’s new president Ali Malekzadeh is left to clean up the mess.
Roosevelt justified the South Loop tower with predictions from finance officials, back in 2009, that the school would see a $40 million increase in tuition revenue by 2014. Considering that Roosevelt’s average tuition for full-time students is around $26,000 per year — just slightly lower than the national average of $31,000 for the 2014-2015 school year — one would think that the school would be able to pay back its debts.
In reality, the school’s tuition revenue only increased by $5 million.
Officials expected the new dormitory to bring more full-time students onto the campus, and full-time enrollment did increase — just not quickly enough. There are twice as many beds available on Roosevelt’s campus now than there were in 2002, but student enrollment stagnated shortly after construction began in 2009.
Although enrollment is continuing to grow slowly, many Roosevelt University students and staff members are wondering whether it will be enough — or whether that 32-story tower will be considered the beginning of the end for Roosevelt.
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