Dive Brief:
- Fortune reports tuition revenue overall is barely expected to outpace inflation and colleges that don't attract major donors can't cushion enrollment declines or spend more to attract new students.
- Revenue had been growing around 7% per year, but is now expected to only see a 3% per year increase.
- Moody's Investor Services rates the bonds of 36 colleges as junk or near-junk, indicating a sector of the wider industry that remains vulnerable.
Dive Insight:
Moody's outlook for four-year higher education as a sector was negative from January 2013 through this past July. The shift to a "stable" came from the expectation of stability in operational revenue growth for at least the next year. Even this status change came with the caveat that regional public universities and small private schools are very much under financial stress.
New York's Bard College and Virginia's Dowling College might look to Sweet Briar for hope. The college's $12 million donation from loyal alumni helped to save the school.