Penn State problems – possible bonds downgrade & highest in-state tuition

by Grace

Penn State’s reputation is taking a beating due to the horrible child abuse scandal revealed last week.

Moody’s may downgrade Penn State’s bond rating in light of possible “weaker student demand” and other risks

New York, November 11, 2011 — Moody’s Investors Service has placed the Aa1 revenue bond rating of Pennsylvania State University (Penn State) on review for possible downgrade to assess credit risks emanating from the announcement this week by the Pennsylvania Attorney General of the filing of criminal charges involving child sexual abuse against a former assistant football coach …

Over the next several months, Moody’s will evaluate the potential scope of reputational and financial risk arising from these events…. We will monitor possible emerging risks emanating from potential lawsuits/settlements, weaker student demand, declines in philanthropic support, changes in state relationship and significant management or governance changes.

Penn State has highest tuition rates for in-state students.

Since March, Penn State’s rising tuition and budget cuts have been a concern for students, parents and officials. And then, US News reported earlier this month that Penn State has the highest tuition in the nation for in-state public school students.

According to the US News report, tuition for the 2010-2011 academic year on average for in-state Penn State students was $15,250.

Penn State spokeswoman Annemarie Mountz said the “highest in-state tuition in the nation” title is a concern for Penn State officials.

CollegeBoard reports that 36% of Penn State students are from out of state.  It will be interesting to see if their total college application numbers drop this year.

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