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GREENSBORO — When Moody’s Investor Services downgraded millions of dollars worth of High Point University investor debt in May, whispers began about the booming school’s long-term financial health.

“I got an e-mail from a friend of mine in Atlanta who saw the Moody’s report,” said Guilford College President Kent Chabotar. “He wanted to know what I thought about it, given Greensboro College’s recent financial problems.”

In August, money troubles forced the retirement of longtime Greensboro College President Craven Williams. Many in higher education wondered: Was High Point University headed down the same road?

High Point University President Nido Qubein also heard the talk and had his own perspective.

“You want to know how seriously I take it?” Qubein said. “On a scale from 1 to 10, I’d give it a negative 2.”

As his university begins another semester of record growth, Qubein said the school is thriving. It has borrowed heavily, he admits — carrying more than $140 million in debt. But he said that’s an investment in the future.

The bonds rated by Moody’s — $4 million to be used on a new arts center — were issued in 2001, before Qubein’s tenure. In a May 15 report, Moody’s, which rates various types of debt for investors to consider, downgraded those bonds, warning investors that “protective elements may be lacking or may be characteristically unreliable.”

The university has a number of other bonds that bear higher ratings by other rating agencies.

For many who have watched High Point’s explosive growth since Qubein took the helm nearly 4 years ago, the news from Moody’s was seen as a rare misfire.

Qubein, a self-made millionaire, CEO and motivational speaker, reacted to the downgrade quickly.

“I talked with our bankers the same day the report came out,” Qubein said. “They said if we wanted the $4 million to pay the bond holders, any who wanted their money back, we could have it to them within 24 hours.”

Qubein made bond-holders that offer, but had no takers.

“Not only did no one want to get out of an investment in High Point University, but when we issued bonds with BB&T after that, we had an enormous response,” Qubein said. “When we went to market, we wanted $40 million, and there were offers for $440 million. People wanted to commit to the investment.”

The school has raised nearly $114 million in cash gifts in the past four years and has seen its revenues go from $30 million to $100 million in the past four years. Like many schools’ investments, HPU’s endowment took a hit in the markets last year but still tops $43 million. Tuition and fees at the school — $33,400 per person this year — also have risen steadily.

“But those aren’t really the numbers that tell the whole story with a college,” Qubein said. “We also went from 2,300 traditional students last year to 2,700 this year. The faculty has grown from 106 to 170 at a time when other schools are losing faculty. And our incoming SAT scores continue to rise, so we know we are attracting top-quality students, and attracting a lot of them.”

U.S. News & World Report, which produces a popular annual ranking of colleges and universities, scored HPU the top up-and-coming school in its most recent “America’s Best Colleges” rankings.

Chabotar, a national expert in college finances, said HPU’s success has been phenomenal, and its fundraising would be the envy of any college. But the school’s heavy borrowing and constant growth come with a high cost, he said.

“Moody’s is saying that High Point University is taking a big risk,” Chabotar said. “They have a plan in terms of enrollment, and if it works, they’ll be fine, and if it doesn’t work, they won’t be fine. But you could say that with any school.”

Qubein doesn’t deny that — but he said that’s the point.

“We have 14 CEOs on our board of trustees,” Qubein said. “They’re bright people. I like to think I’m a bright person myself. We definitely have a plan, and so far every step of that plan has been an extraordinary success.”

Contact Joe Killian at 373-7023 or joe.killian@news-record.com