New College of Florida Seeks Up to $47 Million to Finance USF Sarasota-Manatee Campus Takeover

New College of Florida is seeking to borrow up to $47 million to cover debt it is inheriting with the University of South Florida's Sarasota-Manatee campus and to refinance its own existing obligations, under a financing plan that departs from State University System debt rules and needs approval from the Florida Board of Governors.

The college's trustee Finance and Budget committee took up the plan on Friday, Oct. 30, the Tampa Bay Times reported, and WMNF reported that the committee advanced it unanimously. The full New College board is expected to vote at its Nov. 3 meeting, and the Board of Governors, which oversees Florida's 12 public universities, meets Nov. 12 and 13.

What New College wants to borrow

Under the state law that handed the Sarasota-Manatee campus to New College, the small liberal arts school must take on all of the campus's outstanding debt. About $28 million of that debt is tied to Atala Hall, the campus's residence hall and student center, according to the Times, which reviewed the meeting's agenda materials. New College is also seeking about $16 million to refinance debt it already carries.

The proposal splits the borrowing into two loans:

The college plans to refinance both loans in 2032, the Times reported. The investor behind the subordinate loan has not been publicly identified.

Why it needs special approval

The plan deviates from State University System debt guidelines in several ways, according to the agenda item described by the Times. The system does not allow subordinate liens unless a first lien is unavailable or "circumstances require." Because BankUnited would lend no more than $40 million, New College needs the second, junior loan to reach its target.

The structure also relies on ascending payments, which start small and grow over time, and interest-only payments, neither of which complies with system guidelines. The agenda item states that the college's operating income will not be sufficient to cover its debt payments until 2037.

WMNF reported that a college official told the committee its vote was not the final step: New College would still need to sign loan agreements with the bank, and those would return to trustees for final approval before the loans close.

A deadline set by state law

The financing is driven by deadlines lawmakers wrote into House Bill 5601, the higher education bill lawmakers passed alongside the state budget during this year's special session. The law required that the Sarasota-Manatee campus's real property, along with contracts, leases and liabilities tied to it, be transferred to New College by July 1, 2026.

It also requires New College to assume "legally and financially" the full liability for any outstanding debt on facilities built on the campus, including dormitories financed by USF or the USF Financing Corporation, "as soon as reasonably practical, but no later than December 31, 2026." That includes any fees and costs of transferring, retiring or defeasing that debt.

Until the debt is assumed, the law requires New College to pay USF $166,617 a month, equal to the outstanding debt service, using its own money rather than USF funds. If New College fails to make those payments, the law says the transfer of facilities is invalidated and the buildings revert to USF. New College is also solely responsible for the cost of operating, repairing and maintaining the transferred facilities.

How the campus changed hands

Gov. Ron DeSantis proposed giving the USF Sarasota-Manatee campus to New College in his budget recommendations last winter. The idea drew opposition from local business leaders, many alumni and donors, students and the USF Faculty Senate, and it was never fully debated as a standalone bill, WUSF reported. Instead, House and Senate negotiators settled it during budget conference talks in a special session, and DeSantis signed the budget at the end of June.

USF trustees approved a joint transfer agreement and facilities plan in June. The transfer covered buildings, classroom furniture and fixtures, but not the campus's roughly 1,600 students, its employees or its operating funds. USF kept more than $22 million in recurring operating money associated with the campus, and students enrolled before July 1 may finish their degrees there under the USF name.

Rick Piccolo, chair of the USF Sarasota-Manatee campus board, called the plan "difficult to endorse" at the time but voted for it. "It will be different, to say the least, to no longer see the USF identity on US 41," he said, according to WUSF.

Questions about New College's finances

The debt has been a central point of criticism. During the legislative session, the total debt tied to the campus dorms was put at about $53 million. New College was already renting up to 144 beds in Atala Hall, which opened in 2024 with about 200 beds, for roughly $1.6 million a year.

Nathan Allen, who served as New College's vice president for strategy from 2023 to 2024, told WUSF in February that taking on the dorm debt could be "lethal" for the school. "How do you assume $50 million in debt against no revenue?" Allen said. He noted that New College was already carrying about $17 million in debt, which he said had kept it from borrowing for more than a decade.

A Florida DOGE report last November found New College to be the least efficient school in the state university system, with per-student operating expenses of $83,207 and a cost of $494,715 to produce a degree, compared with $72,252 at USF. DeSantis appointed a slate of conservative trustees in 2023 to remake the school, which is led by President Richard Corcoran.

What's next

The New College Board of Trustees is scheduled to vote on the financing at its Nov. 3 meeting. If trustees approve, the plan goes to the Board of Governors on Nov. 12 and 13, where members will be asked to sign off on a structure that breaks several of the system's own debt rules. If the Board of Governors agrees, New College would then negotiate final loan documents, bring them back to trustees and close the loans before the state's Dec. 31 deadline for taking over the campus debt.