S&P: Public Universities in 4 Countries Stable Despite Pressures

August 21, 2018

A credit ratings agency said in a report issued Monday that public universities in Australia, Canada, Mexico and the United Kingdom “have largely maintained their creditworthiness over the past year,” despite reductions in governmental appropriations relative to total revenues.

The report from S&P Global Ratings -- titled "Australia, Canada, Mexico and U.K. Universities 2018 Medians Report: Increased International Tuition Revenues Preserve the Sector's Stability Amid Stagnant Government Support" -- finds that increases in student revenues and spending controls have "sustained solid operating margins at the high investment-grade universities" and notes their increasing reliance on tuition revenue.

“In the past year, most public universities' operating margins have come under pressure, because revenues from state transfers have stagnated or declined,” the report states. “State appropriation dependence for most higher-rated public universities in Australia, Canada, and the U.K. has declined relative to total revenues. In Australian universities, for example, international student fees have largely compensated for the decline. That said, it's still unclear if student-generated revenues will continue covering the lower government funding."

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