WKU’s annual debt payments will increase by about $3 million a year in the 2026 and 2027 fiscal years after the Board of Regents, at its quarterly meeting Friday, approved borrowing an additional $43.4 million to complete two major construction projects.

But President Timothy Caboni told regents the higher debt payments would be offset by donations and cash on hand and would not cause further cuts to the university’s budget.

During a budget presentation on various facility projects, Susan Howarth, executive vice president for Strategy, Operations and Finance, told the board that WKU will issue its new debt in November after the presidential election.

WKU plans to borrow $25 million to complete the new Gordon Ford College of Business building and $18.4 million to complete the new Hilltopper Fieldhouse and press box project.

Howarth showed the board data on the university’s long-term debt, and according to the data presented in 2014 WKU had $196 million in debt, but it dropped to $116 million in 2024. Howarth said the university will see another uptick in the next few years, but it will begin to drop again.

Howarth also said that in this uptick phase, from 2026 and 2027, WKU’s annual debt service is projected to rise about $2.5 million from $16.7 million in 2025 to $19.2 million in 2026. According to their projections, WKU’s debt service will decline in 2028 by about $3.5 million.

Supporting documents for the item said that annual debt payments would increase by $3.3 million a year for the additional money borrowed.

Faculty Regent Shane Spiller asked Howarth and President Timothy Caboni how this debt uptick plays into the university’s current “budget realignment strategies” that will be carried over into 2025-26, given that “every dollar matters when it comes to this campus.”

“We should have the cash on hand to cover those two years of increases,” Caboni said. “We’ll burn the cash, but we’ll protect the budget, and it will obviously help retire the debt.”

Caboni said that WKU is fiscally conservative in terms of debt structure, and he said that WKU is continuing to bring its debt down even amidst various large construction projects.

Caboni told the Herald after the meeting that some of the cash that will be used to bridge the debt increase for 2026-27 will come from a $9 million pledge from the new Gordon Ford College of Business building and a $5 million-$7 million gift to WKU Athletics that has not yet been announced.

This gift is athletic-oriented, and Caboni said it is “complicated” because it has “incentives built into it.” He said the gift will be announced later this year, and it will support some of the costs for the Hilltopper Fieldhouse project.

The increase in debt comes with the board’s approval of new agency bonds that will fund the completion of the Gordon Ford College of Business building and press box and Hilltopper Fieldhouse projects.

The board’s approval of issuing these bonds means the university will borrow up to $43.4 million to cover the cost overruns on these projects.

Chief Facilities Officer Bryan Russell told the board that these elevated costs are affecting higher-education institutions right now because of increased labor and material costs.

“Every university is dealing with the cost pressures,” Caboni said after the meeting, “And you know, I’m proud of the work that we’ve done, historically, as an institution. In 15 years, we’ve not had any cost overruns in any project. This is really a once in a lifetime kind of inflationary environment that we find ourselves in, and unfortunately we have to navigate through it.”

Other items the Board discussed were:

• Swearing in Staff Regent Jennifer Hammonds and Regent Derrick Helm
• Approving professor emeritus status for Harold Little, associate professor of accounting and former department chair of accounting
• Approving increasing the endowment fund minimum from $10,000 to $25,000 and approving the endowment match program
• Approving the naming of Garrett Plaza – at the top of the Hill where Garrett Conference Center used to be located – after WKU’s second president, Paul Garrett, and his wife, Virginia.

News reporter Cameron Shaw can be reached at [email protected].