Moody’s downgrades higher education, gives sector a negative outlook

Dive Summary:

  • Moody's Investors Service reported Wednesday that it revised its financial outlook for colleges and universities, giving the entire sector a negative grade.
  • The credit reporting agency previously gave the entire sector a negative outlook in 2009, but upgraded the most elite public and private colleges to a stable forecast in 2011-2012.
  • Moody's justified the change by explaining that even the most elite colleges and universities face lower prospects for revenue growth due to increasing pressure to keep tuition down, a weak economy and the chance Congress could cut financing for research grants and student aid--though it should be noted that most of the nation's top colleges and universities still carry top credit rankings.

From the article:

The credit reporting agency Moody’s said on Wednesday that it had revised its financial outlook for colleges and universities, giving a negative grade to the entire field. For the last two years, Moody’s Investors Service gave the nation’s most elite public and private colleges a stable forecast while assigning a negative outlook to the rest of higher education. ...

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