Amid 'Negative Outlook' for Higher Ed, Moody's Finds Optimism

July 15, 2014

The financial picture for higher education remains negative, but “green shoots” of stability are emerging, according to a new industry outlook by Moody’s Investors Service.

The usual concerns about higher ed still apply: because students and families worry about price and cost, colleges can’t much raise tuition to increase their revenue; state funding will increase, but not enough to keep up with the growth in expenses; competition for sponsored research will continue to be fierce; and demographic forces will exacerbate stress at weaker colleges, among other concerns.

Moody’s still finds reasons for hope. Among them: long-term demand for higher education remains strong, particularly interest in associate and master’s degrees; rebounds in the job and housing market augur well for the higher ed sector; and endowment returns continue to grow.

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