Dive Brief:
- An analysis of the 2014 fiscal year by Moody’s Investors Service finds finances stabilizing at the average public and private nonprofit institution.
- During the 2014 fiscal year, an increase in state funding and flat tuition charges caused, for the first time in more than a decade, the gap between state funding and student charges as a portion of total operating revenue to shrink slightly among public schools.
- Median revenue growth among private institutions also outpaced the growth in expenses for the first time since 2011, and median net tuition revenue outpaced inflation.
Dive Insight:
Much of the good news in the Moody’s report came for those schools at the middle and top of the financial health spectrum. Those at the bottom saw net tuition revenues decreasing, enrollment shrinking, and slow growth in total assets. Among private, nonprofit colleges and universities, Inside Higher Ed reports median total assets grew between 36% and 48% for the most financially stable institutions. It grew only 26% to 28% for those with low Moody’s ratings.
Moody’s attributed the overall financial gains across the industry to strong returns from the stock market, lower debt issuance, and reduced expenses. Its analysis focused nonprofit public and private schools at the financial median on a range of measures.