MOOCs, Reputation and Credit Ratings

Recent developments in online higher education will likely benefit the credit ratings of brand-name and niche institutions while possibly threatening for-profit institutions and smaller, regional colleges and universities, according to a new report by Moody's Investor Service. In a report that elides the potential implications of massive open online courses (MOOCs) and the continued growth of conventional online programs, Moody's analysts predicted that well-reputed institutions will band together around online offerings to reduce operating costs. Meanwhile, there could "eventually be negative side effects on for-profit education companies and some smaller not-for-profit colleges that may be left out of emerging high reputation online networks," the report said. However, the analysts suggested that well-known institutions that rush too heedlessly into MOOCs could sacrifice their reputational footing. "[T]he rapid pace of the MOOC movement presents the possibility of brand dilution as universities rush to join the trend without controlling the quality of the product/content being posted," they wrote.