The eliminations of these payments would impact higher education institutions in more than 25 states, including the University of Oregon.
The American Council on Education (ACE), the Association of American Universities (AAU), the Association of Public and Land-grant Universities (APLU), and other higher education organizations are urging Congress to take action during the lame-duck session to address the looming expiration of federal subsidy payments of Build America Bonds (BABs) due to sequestrating. The eliminations of these payments would impact higher education institutions in more than 25 states, including the University of Oregon.
In a letter to congressional leadership, the higher education leaders explained that since the Great Recession more than a decade ago, higher education institutions invested billions of dollars in long-term infrastructure projects, such as environmental upgrades and research facilities to stimulate the economy and support campus communities. Congress created Build America Bonds as one of several direct pay bond options, which provided a 35 percent subsidy from the federal government for the lifetime of the bond to cover a percentage of interest costs. Recently Congress reduced subsidy amounts, and now, without immediate federal legislative action, the subsidy payments will be eliminated in January 2023.
Higher education leaders provided examples of how participating institutions will be affected, including losing anywhere from $10 to more than $100 million in payments over time. They also noted that the issue reaches far beyond higher education, with communities that engaged in the Build America Bonds program poised to lose billions in payments if the subsidy is eliminated.