Borrowers use swaps to match the type of interest rates on their debt with the rates on their income, which can help reduce borrowing costs. Lenders and speculators use swaps to profit from changes in the direction of interest rates. A bet on higher rates, for example, means paying fixed rates and receiving variable. At Harvard, nobody anticipated some interest rates going to zero, making the university’s financing a speculative disaster.

Harvard’s woes stemmed from misunderstanding its role, said Leon Botstein, president of Bard College in Annandale-on-Hudson, New York.

“We shouldn’t be in the banking business, we should be in the education business,” Botstein said in a telephone interview.
Doesn't Harvard train our bankers? Oh... Now I get it (actually, i got it a long time ago)! So the institution that teaches our bankers how to bank, does not know how to bank, and should not be in the banking business from which you would learn how to better bank, hence, you can bank on the fact that the bankers can't bank, as recently proven. So you send your child to Harvard to learn how not to bank.