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Higher Ed Sector Outlook Neutral for 2022
Fitch Ratings forecast a neutral sector outlook for U.S. colleges and universities in 2022, the credit ratings agency announced Tuesday. Small enrollment increases, favorable state budget proposals and the return of auxiliary revenue have aided the sector’s recovery. Outsize endowment returns and continued federal stimulus have also helped.
However, downgrades are possible for institutions with “insurmountable operating and cash flow pressures, which may be driven by underperforming enrollment, auxiliary and/or state funding, along with other operating pressures,” according to the Fitch analysis. Local COVID-19 outbreaks as well as low international student enrollment could pose risks to the sector in 2022.
Continued on-campus instruction and activities could help bolster enrollment in 2022. Federal and state decisions about Pell Grants and student aid, as well as state funding, may also impact the outlook for colleges and universities next year.
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