CONWAY, SC (WMBF) - It costs $191 million a year to run Coastal Carolina University, and the finance department is always looking for ways to cut costs.
Friday, the university announced it will save $25 million in its property refinance plan due to high bond savings by purchasing University Place, the student housing facility.
As Stacie Bowie, the Vice President for Finance and Administration explained, the process started last year.
"At the time, with our good bond rating, and low interest rates, that prompted discussion with our chairman to say 'Hey what if we took a look at purchasing University Place and do the same thing, get a good interest rate and what it would be versus what the student housing foundation is paying on the bonds they have outstanding,'" said Bowie following the CCU Board of Trustees meeting on Friday.
Up until this point, the Student Housing Foundation financed the purchase of University Place with bonds with higher interest rates.
Bowie believes this move will save the school nearly $950,000 a year.
"The $950,000 a year goes back into the housing operations and allows us to keep housing rates flat," said Bowie.
She explained the money will also help renovate and expand other buildings on campus.
A press release from CCU pointed out the university will save more than originally estimated on the plan "because of the strong ratings reports released in January 2015 on the $87 million student housing revenue bond issue. Fitch and Moody's, the two major credit rating agencies, assigned CCU's bond issue an "A+" and "A1" rating, respectively. Typically, the higher the bond rating, the lower the interest rate on the bond due to a lower risk perceived by the purchaser."
In addition, the school plans to build a full-service food venue on the property of University Place.
"Right now were looking at a $4.7 million building, that will service the over 2,000 students that live there," said Bowie.
Currently, the university has $150 million in construction projects underway, the biggest construction program in the history of the university.