S&P Issues Bifurcated Outlook for Higher Ed

January 15, 2016

In recent years the number of credit-rating downgrades to colleges and universities has significantly outnumbered the number of upgrades given by Standard & Poor's credit rating agency. And the trend is expected to continue, but slow, in the coming year.

Yet some institutions will experience more financial difficulty than others, depending on their size, academic standing and financial strength. The result is a bifurcated outlook for higher education in 2016, according to a new report from Standard and Poor's.

"We believe most institutions have adapted to the 'new normal' of more competition for students and limited tuition flexibility and are taking advantage of their individual strategic positions to continue operating successfully," the report states. "However, these factors are not affecting all institutions equally. Schools with national or international reputations and growing resources will likely be able to capitalize on opportunities to further strengthen their positions, while smaller, regional schools will continue to struggle to differentiate their brands, which will require additional investment and resources that could weaken their credit profiles in 2016."

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