Posts tagged ‘Moodys’

November 15, 2011

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.

August 6, 2011

‘Fears of a bubble in educational spending are not without merit’ – Moody’s

by Grace

Mike Riggs at Reason writes about Moody’s recent report on student lending.  The situation is looking very similar to other recent industry bubbles.

“These subsidies are kind of like propping up the auto industry with cash for clunkers, or the housing industry with cash for first-time buyers . . . We have this financial aid system that is keeping the system alive.”  —  Howard Horton, President of the New England College of Business and Finance

The future for today’s colleges and their students?

To his credit, Kantrowitz anticipated a future in which would-be students shy away from expensive higher educations, due to the double-whammy of high debt and and gloomy job prospects. But he puts that future at least 20 to 30 years away, when today’s college graduates are likely to still be paying back student loans and thus reluctant to extravagantly finance their own children’s educations as well. Moody’s sees that problem coming to a head possibly within the next decade, and anticipates that the aftershock of declining demand for higher education will hurt both college towns and big cities, which rely on students (and their borrowed money) to keep businesses afloat during down times.

My grandchildren’s* college experience may be completely different from the one their parents have.

* Not that I’m assuming grandchildren in my future!

August 4, 2011

Moody’s downgrades student loan outlook

by Grace


“Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place.”

Via InsideHigherEd

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