Bottom Line Bloggers
Follow Bottom Line through your favorite RSS reader.
February 6, 2013, 5:05 pm
Declining state appropriations, unstable endowment returns, a projected drop in the number of high-school graduates—there’s no shortage of grim news for higher education of late. But a new analysis from the State University of New York at Albany’s Nelson A. Rockefeller Institute of Government says institutions in the Northeast may be hit harder than the rest.
In a report released on Wednesday, Jason E. Lane, the institute’s director of education studies, argues that data show this gloomy scenario could lead to more closures and consolidations of higher-education institutions in the region.
Mr. Lane based his analysis on data in a recent report from Moody’s Investors Service, which suggested that the negative outlook for higher education is worse than previously thought, and a recent report from the Western Interstate Commission for Higher Education. The commission’s report says …
January 23, 2013, 4:08 pm
Moody’s Investors Service issued a bond-rating downgrade—from Baa3 to Ba1—and a negative outlook for the College of New Rochelle on Wednesday. The downgrade was “based on persistent enrollment declines and a challenged student market position, steep enrollment decline in fall 2012, weakening operating performance, and thin debt-service coverage,” according to Moody’s.
The bond-rating service also cited the New York college’s “high leverage, extremely thin unrestricted liquidity, insufficient liquidity to cover its variable-rate demand debt, heavy use of operating lines, and a modest balance sheet.”
Moody’s did note that the college’s new president, Judith Huntington, who was vice president for financial affairs from 2001 to 2010, could yet stabilize the institution.
The college said that Ms. Huntington was not available for an interview. Instead, the college issued a…
January 16, 2013, 3:11 pm
Across-the-board pressure on all of the revenue sources that support higher education has prompted Moody’s Investors Service to issue a negative short-term outlook for the entire sector in a report issued on Wednesday.
“It basically means that there’s nowhere to hide, even for diversified market leaders, the top-tier universities,” said Eva Bogaty, the credit-rating agency’s assistant vice president and analyst who wrote the report. For the past two years, research universities have escaped criticism from Moody’s because of their diverse sources of revenue. However, state-government appropriations, investment earnings, gifts, research grants, and patient-care reimbursements are all facing economic pressure, the report says.
The outlook report, which is released annually at the beginning of the calendar year, expresses the agency’s expectations for the fundamental credit conditions …
December 18, 2012, 1:48 pm
The number of sanctions from national accrediting agencies increased by nearly 50 percent from 2008 to 2011, according to a new report from Moody’s Investors Service.
Nearly 80 colleges were subject to some negative accreditation action in 2011, the credit-rating agency found. Most colleges have been able to meet accreditors’ requirements after a warning or probation, the report concludes, and the increase in scrutiny is a result of pressure from the U.S. Congress and the Education Department to ensure both academic and financial viability in higher education.
“Not long ago, accreditation sanctions were rare. Now, in response to growing government criticism of poor disclosure about quality, pricing, and outcomes, as well as inefficient cost management, accreditors are taking more aggressive and quicker actions to bolster their role in demonstrating quality and performance…