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While Moody’s Investors Service sees a stable outlook over the next 12 to 18 months for a small number of highly rated colleges and universities, a new report by the ratings agency about the outlook for higher education says that the majority of colleges and universities will continue to face various financial pressures, including state and federal funding cuts, concerns about cost by students and families, falling demand, and balance sheet illiquidity.

The report notes a bifurcation of demand, with some students favoring the highest quality options and others preferring the most affordable. In a line that the ratings agency has used more frequently as of late, the report’s authors state that colleges and universities with good leadership teams will perform the best over the next few years. “Colleges and universities led by experienced management teams with diverse backgrounds and overseen by strong boards will be best placed to navigate through ongoing future challenges,” the authors note. The report is available online to Moody’s subscribers.