MIT joins colleges tapping bond markets amid federal funding threats

MIT joins colleges tapping bond markets amid federal funding threats
The elite college is just the latest institution turning to taxable bond sales as the Trump White House continues to exert political pressure.
MAY 05, 2025
By  Bloomberg

The Massachusetts Institute of Technology is the latest elite college to borrow money from the bond market as universities contend with threats to federal funding under President Donald Trump’s administration.

MIT is joining Harvard, Stanford and Princeton in selling taxable bonds in a deal that’s set to price Tuesday, according to a roadshow for investors. Taxable bonds are often quicker to sell compared to tax-exempt bonds, which have restrictions on what the proceeds can be used for. 

“MIT manages its resources to ensure it can advance the Institute’s mission in a wide range of conditions,” Glen Shor, executive vice president and treasurer for MIT, wrote in an emailed statement. “This bond issuance will provide us additional flexibility to achieve this goal.”

Colleges are taking a variety of steps to raise funds and boost their liquidity, including tapping the capital markets. Yale University is also planning to sell $850 million of bonds this month, in a deal that is set to include $350 million of taxable debt.

The flurry of debt sales come as the Trump administration has frozen federal funding for universities including Harvard, Northwestern and Cornell. Trump has hammered colleges for their handling of antisemitism after student protests roiled campuses following the Oct. 7, 2023, attack by Hamas on Israel and the Jewish state’s retaliatory response in Gaza. 

The National Institutes of Health also proposed a cut to research funding for universities, which is being challenged in court.

The federal government provided $648 million in funding for MIT for sponsored activities, including research, during fiscal 2024, bond documents show. MIT also operates a laboratory sponsored by the Air Force through which $1.3 billion in revenue came from the federal government in fiscal 2024. 

“As the situation at the federal level continues to evolve, the Institute will continue to evaluate developments and is contingency planning for a range of financial outcomes,” MIT said in the bond documents.

MIT is rated AAA by S&P Global Ratings, which said that demand for the university is excellent — MIT’s acceptance rate last fall was 5% and it has a $24.6 billion endowment during fiscal year 2024.

The analysts at S&P still consider the federal funding pressures a risk. 

“We anticipate that operating performance could be strained due to changes in federal funding while management proceeds with efforts to reduce expenses,” they wrote.  

Latest News

US futures rise, S&P 500 on track for strong week
US futures rise, S&P 500 on track for strong week

Easing trade tensions continue to boost market.

Fed's Bostic sees one cut, no recession in 2025
Fed's Bostic sees one cut, no recession in 2025

Uncertainty looks set to be here for some time, Atlanta Fed president warns.

Trump set to keep 30% China tariffs until late 2025
Trump set to keep 30% China tariffs until late 2025

Analysts, investors believe trade barriers will return after pause.

Why sugar could prove a sweet investment in 2025
Why sugar could prove a sweet investment in 2025

Global supply glut outlook slashed by major producer.

Edelman: What advisors should know about purposeful retirement
Edelman: What advisors should know about purposeful retirement

InvestmentNews speaks with $293B firm’s Isabel Barrow

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave

SPONSORED The evolution of private credit

From direct lending to asset-based finance to commercial real estate debt.