STUDENTS have to rack up a huge debt and count on making money in the future – and Bournemouth University has done the same.

The university’s long term debt has hit £23 million, an increase of 130 per cent since it began a massive investment plan.

The figures were released to the Daily Echo after a Freedom of Information Act request. They show debt was only around £10.5m from 2005 to 2007.

The debt is classed as long term because it does not have to be paid back within one financial year. The bulk is £13m worth of bank loans.

Another £9.9m comes in the form of finance leases, where the university is gradually buying back a new building – like the Executive Business Centre in Holdenhurst Road.

Money has also gone into high-quality student accommodation like Lyme Regis House in Bournemouth town centre and infrastructure like the 308-seat Large Lecture Theatre.

A university source said: “Debt levels are going to be a problem over the next few years while universities get to grips with the new financial environment.

“The investments have positioned BU well to charge higher prices and the recent moves up the league tables will also have helped.

“The only difficulty is in attracting postgraduate students, which is where the high margin profitability kicks in.”

The lecturers’ union has raised concerns that some universities will go bust now government grants are being cut by 80 per cent – though it does not have particular concerns about BU.

The source said: “I think BU is relatively safe because it provides such a significant proportion of the local GDP that it will not be allowed to fail.

“Of course, that doesn’t mean there will not be difficult times ahead.”

Bournemouth University research found student spending off campus generates around £240m a year for the region.

The university said it would respond to questions over the long-term debt if they were submitted under the Freedom of Information Act.

Deputy vice chancellor David Willey told the Echo last year: “Our finances are very healthy. We are as confident as we can be in an uncertain time.”

He pointed to a £4m annual profit on a turnover of just over £100m – more than government guidelines demand.

However, another university source said: “The management team claim to have an operating surplus, but we are also massively understaffed and in debt, so there is a definite problem.”

The university’s strategic plan says it expects to borrow up to £30m by the end of the next financial year.

David Heathcote, from the universities branch of lecturers’ union the UCU, said the danger is degrees could be “dumbed down” to keep up customer satisfaction, now student fees are so vital to a university’s bank balance.

Mr Heathcote added: “The vice-chancellor has given us his assurance that standards will not be compromised at Bournemouth and we are willing to work with him to ensure that this is not so.”

Factfile

Bournemouth University’s long-term debt:

2010 – £23m

2009 – £20.1m

2008 – £15.2m

2007 – £10.5m

2006 – £10.4m

2005 – £10.4m

2004 – £10.5m