Roman Catholic colleges and universities face credit risks because fewer students are attending K-12 schools affiliated with the church, narrowing what is traditionally an important enrollment pipeline, according to a report released this week by Moody’s Investors Service.
At the end of the 2019-20 academic year, 209 Roman Catholic elementary and secondary schools closed, according to the National Catholic Educational Association. Roman Catholic K-12 enrollment fell by 6.4 percent this fall, according to the association -- the largest single-year drop recorded in 50 years.
“Increasing closures of Catholic elementary and secondary schools is likely to dampen the percentage of Catholic students who complete elementary and secondary education in Catholic-affiliated institutions, a key feeder for Catholic colleges and universities,” Patrick McCabe, analyst at Moody’s, said in a statement. “The number of students enrolled in Catholic-affiliated primary and secondary schools has been on a downward trend for some time, which is likely to accelerate with the closure and consolidation of such schools.”
Some Roman Catholic colleges and universities enjoy strong national brands and academic reputations. Moody’s expects them to flourish. Others, smaller and regional institutions, face increasing competition for students and rising tuition discount rates that can constrain revenue.
Between 2010 and 2018, enrollment at all universities associated with the church fell by 6 percent. Those whose creditworthiness Moody’s rates -- which tend to be in a stronger position than the higher ed market as a whole -- experienced a median enrollment increase of 1.4 percent between 2015 and 2019, although individual cases varied. That tracked with the median enrollment change for all private universities.
Colleges and universities associated with the church can mitigate some of the pressures they face because a significant portion of their students are not Roman Catholic, according to Moody’s. In 2010, almost 55 percent of students entering four-year Roman Catholic universities identified as Roman Catholic, according to the Higher Education Research Institute. In the fall of 2019, about 47 percent did so.
At the same time, where U.S. Roman Catholics live and who they are has been changing. Relatively fewer Roman Catholic adults are living in the Northeast and Midwest, and relatively more are living in the South and West. The Roman Catholic population makes up a stable percentage of the country’s population -- 22 percent in 2019, in line with a 70-year average of 25 percent, according to Gallup. But the country’s increasingly Hispanic population is contributing to that stability.
In 2010, more than three-quarters of freshmen at Roman Catholic colleges and universities were white, 78 percent. In 2019, two-thirds were white.