By
Higher education has received a negative financial outlook from Moody's, the credit ratings agency, for a second consecutive year. An expectation of continued low net tuition revenue, Moody's said, is the primary driving force behind a prediction that 4 percent growth in overall operating expenses for the sector will outpace projected revenue growth of 3.7 percent.
Concerns about affordability and return on investment will continue to curtail growth in net tuition revenue, according to Moody's. At the same time, colleges will remain focused on containing expenses, particularly rising labor costs, which comprise 65-75 percent of expenses for most institutions. As a result, colleges face longer-term challenges due to not investing enough in academic programs, housing and technology, the credit ratings agency said.
Up to 30 percent of credit-rated public and private colleges will continue to face material financial stress. And a small but growing number of colleges will close or merge with other institutions, Moody's predicted, particularly small colleges.
However, the higher education sector is adaptable, and most universities are adjusting to systemic changes.
"The sector has amassed healthy financial reserves during the outlook period following several years of robust investment returns," Moody's said. "This strength has bolstered endowment payouts and philanthropic support."
Opinions on Inside Higher Ed
Inside Higher Ed’s Blog U
Inside Higher Ed Careers
Browse Faculty Jobs
Browse Administrative Jobs
Browse Executive Administration Jobs
Topics
College Pages
Popular Right Now
Sign Up / Sign In
With your existing account from...
{* loginWidget *}With a traditional account...
{* #signInForm *} {* signInEmailAddress *} {* currentPassword *} {* /signInForm *}Newsletter enrollment
Existing account found
We have found an existing account for the email address.
Please sign in to update your newsletter preferences.
{* /signInForm *}Newsletter opt-out
Edit your newsletter preferences
Account Info
Sign In
Welcome back, {* welcomeName *}!
{* loginWidget *}Sign In
Welcome Back
Account Deactivated
Your account has been deactivated.
Account Reactivation Failed
Sorry, we could not verify that email address.
Email Verification Required
You must verify your email address before signing in. Check your email for your verification email, or enter your email address in the form below to resend the email.
{* #resendVerificationForm *} {* signInEmailAddress *}Almost Done
Please confirm the information below before signing in.
{* #socialRegistrationForm *} {* firstName *} {* lastName *} {* displayName *} {* emailAddress *} {* optInIHE *} {* optIn3rdParty *} {* agreeToTerms *}Almost Done
Please confirm the information below before signing in. Already have an account? Sign In.
{* #registrationForm *} {* firstName *} {* lastName *} {* displayName *} {* emailAddress *} {* newPassword *} {* newPasswordConfirm *} {* optInIHE *} {* optIn3rdParty *} {* agreeToTerms *}Thank You for Registering
We have sent a confirmation email to {* emailAddressData *}. Please check your email and click on the link to verify your email address.
Create New Password
We'll send you a link to create a new password.
{* #forgotPasswordForm *} {* signInEmailAddress *}Create New Password
We've sent an email with instructions to create a new password. Your existing password has not been changed.
Create New Password
This email address was registered with a social account. We've sent an email with instructions to create a new password, which can be used in addition to your linked social providers.
{| current_emailAddress |}
{| foundExistingAccountText |} {| current_emailAddress |}.
{| existing_displayName |} - {| existing_provider |} : {| existing_siteName |} {| existing_createdDate |}
{| existing_provider_emailAddress |}
Sign In to Complete Account Merge
Resend Verification Email
Sorry, we could not verify that email address. Enter your email below, and we'll send you another email.
{* #resendVerificationForm *} {* signInEmailAddress *}Change Password
Create New Password
We didn't recognize that password reset code. Enter your email below, and we'll send you another email.
{* #resetPasswordForm *} {* signInEmailAddress *}Create New Password
We've sent you an email with instructions to create a new password. Your existing password has not been changed.
Edit Your Account
Profile Photo
Linked Accounts
Link Your Accounts
This allows you to sign in to your account using that provider in the future.
Password
Deactivate Account
Change Password
Deactivate Your Account
Are you sure you want to deactivate your account? You will no longer have access to your profile.
{* deactivateAccountForm *} {* /deactivateAccountForm *}
Expand commentsHide comments — Join the conversation!