Harvard Accepts Higher Debt Costs as Bankers Profit

Harvard’s interest costs are set to increase as much as $550 million over three decades because the U.S.’s wealthiest and oldest university took advice from Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley.

Earlier, those same Wall Street banks sold Harvard -- then led by Lawrence Summers, now an Obama administration adviser -- derivatives that soured. When that worsened a cash squeeze, they recommended that the AAA rated school pay as much as 1.41 percentage points more than yields on identically rated corporate debt for a $1.5 billion Dec. 5 bond sale.