Moody’s Investor Services gave favorable ratings to colleges and universities that offer the highest quality and most affordable higher education options, noting the increasingly strong consumer interest in these types of schools. Moody’s sees a bifurcation of demand, with declining interest in expensive, mediocre schools.
Moody’s Investors Service, in a report earlier this year, said it had a favorable outlook for the nation’s most elite private colleges and large state institutions, those with the “strongest market positions” that had multiple ways to generate revenue. Ohio State, for instance, received a stable outlook from Moody’s last fall, though the report cautioned about the school’s debt and reliance on its medical center for revenue.
But Moody’s issued a negative outlook for a majority of colleges and universities heavily dependent on tuition and state revenue.
“Tuition levels are at a tipping point,” Moody’s wrote, adding later, “We anticipate an ongoing bifurcation of student demand favoring the highest quality and most affordable higher education options.”…
“We know the model is not sustainable,” said Lawrence T. Lesick, vice president for enrollment management at Ohio Northern University. “Schools are going to have to show the value proposition. Those that don’t aren’t going to be around.”