For the first time in its short, 36-year-old history, Liberty University is a debt-free institution. May 2007’s passing of Liberty’s founder and Chancellor Dr. Jerry Falwell led to a great return on the life insurance policies he had been buying throughout his lifetime.
According to an article by Ron Brown in the Liberty Journal, Dr. Falwell’s insurance policies totaled $34 million. From that money, $5 million was designated for Thomas Road Baptist Church and $29 million was given to the university. Throughout the past 20 years, those managing the financial health of the university have been working to maintain Liberty’s debt to $20-$25 million per year. Due to the amount of money received from the life insurance policies, the debt previously carried by the university has been entirely paid.
Dr. Ron Godwin, Executive Vice President, said, “We arrived at a debt-free status because of two things: the prior management of debt reduction by the Chancellor and Vice Chancellor and the life insurance received upon Dr. Falwell’s death.”
Godwin went on to explain that this new reality “allows us to concentrate on increasing the endowment [fund] rather than paying off debt.”
In the first convocation of the school year on Wednesday, LU Chancellor Jerry Falwell Jr. said, “Dad always joked that when he kicked the bucket Liberty would be in high cotton.”
Falwell Jr. also added, “Because of this payoff, the class of 2011 is the first class to enter Liberty University as a debt-free institution.”
A desired result of this debt-free status is that it will aid the growth and development of the university both in its quality and in its size.
“A debt-free institution is much more attractive to potential endowment donors. Major donors, as a rule, give money in the anticipation of their gifts living and producing far beyond their own lifetimes. A debt-free institution is much more likely to live well and far into the future,” said Godwin.
In comparison to the early years of the university, Godwin said, “I am grateful and extremely encouraged. Our debt-free status allows us to plan for a future that would not have been imaginable or attainable had we remained deeply in debt.”
“We’re not relying on contributions. We’re operating within our tuition and fees. Zero percent has come from other ministries. We have a strong bottom line even with that,” said Falwell Jr., as quoted in the Liberty Journal.
The cause of the endowment fund has also been greatly aided by a $2.5 million gift recently donated to the university by Sherwin Cook, manager of White Oak Management Company.
As Mr. Cook told the Liberty Journal, “The university reaches a lot of people in many aspects of life. It reaches throughout the world as more and more alumni go out into the world. I can see the great potential in what they are doing. There is a great need for more of it.”
Near the close of his speech on Wednesday, Falwell Jr. exhorted the faculty and students to maintain the vision that has been fostered by Dr. Falwell and the many contributions of others throughout the years.
“In Luke 12:48 it says that to whom much has been given much will be required. That means that we have a responsibility to maintain the dream and vision and to complete the mission. We cannot disappoint those who gave to make this a reality,” said Falwell Jr.
Contact Jennifer Schmidt at firstname.lastname@example.org.