Stability and Modest Growth Expected for U.S. Colleges

December 3, 2015

Stability and modest growth. That's what U.S. colleges and universities can expect over the next year to 18 months, according to a 2016 outlook by credit rating agency Moody's Investors Service.

Tuition revenue growth is expected to be between 2 and 3 percent for public and private universities, with overall revenue growing at about 3 percent. State funding for public universities is anticipated to grow between 2 and 4 percent.

Moody's outlook is based off a comprehensive look at the agency's higher education portfolio, which includes 230 public universities and 275 private universities. 

Though Moody's predicts most colleges will see some revenue growth, it says between 20 to 30 percent of the colleges it rates will struggle to reach the 3 percent revenue growth figure. The ones that will struggle the most, according to Moody's, are small colleges with limited economies of scale.

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