Hunter
12/02/24
The University of Iowa athletic department still owes a substantial sum from the $50 million it borrowed from the main campus during the pandemic.
The Gazette reports although UI Athletics paid $3 million back to the main campus in 2022, $1.5 million in 2023 and $1.5 million this year, the loan’s 2.5 percent interest rate has swallowed up most of those payments — shaving just $2.3 million off the principal to date.
The loan, which was taken out in early 2021, was to ease the burden of a projected $75 million deficit for the budget year due to the pandemic. When all was said and done, the deficit was a less severe $45 million.
Fiscal year 2022 saw the Athletic Department exceed revenue expectations by nearly $10 million, with the following fiscal years seeing revenue records. The current budget shows another revenue record, thanks in part to Big Ten Conference contributions increasing by 22 percent over last year.
Iowa Board of Regents member David Barker said given the financial status of the athletic department, the original payback period of 15 years with interest rates repriced every five years seems inadequate. He anticipates Athletics will be in a position to pay off more of the loan at a faster rate.
The Gazette quotes UI Chief Financial Officer Terry Johnson as being very interested in paying the loan off as quickly as possible, which pleased Regents President Sherry Bates.