Moody's Warns of Impact of Enrollment Declines

Declines in the total enrollment of American higher education are "credit negative" for colleges and universities, particularly the majority that depend on tuition revenue for operating support, says a review of credit issues released Monday by Moody's Investors Services. "Enrollment declines in higher education are credit negative because they heighten competitive pressure for all universities. This limits opportunity to grow tuition revenue, now the primary revenue for the majority of public and private universities," said the report. "[A]mong traditional undergraduate colleges and universities, the credit effect is more severe for lower-rated, tuition-dependent colleges and universities that lack a strong brand name or market position. For higher rated universities with established student demand, the effect is minimal." Read more...