S&P Global Ratings maintained 77 ratings and took 38 rating actions in the U.S. not-for-profit higher education sector in the first quarter of 2021. The 38 rating actions are broken out as follows:
- 10 downgrades
- 18 outlook revisions to stable
- Seven outlook revisions to negative
- One outlook revision to positive
- Two new ratings
All 18 outlooks revised to stable had been revised to negative in April 2020 as part of S&P Global Ratings' response to the heightened social and economic risks associated with the COVID-19 pandemic. Similarly, three of the 10 ratings we lowered had outlooks revised to negative from stable in April 2020.
In "Outlook For Global Not-For-Profit Higher Education: Empty Chairs At Empty Tables," published Jan. 20, 2021, on RatingsDirect, we discussed our view that disparities between higher- and lower-rated issuers will continue to increase; through the first quarter of 2021, we have seen that trend materialize. Of the 10 downgrades, seven were within or into the 'BBB' rating category and only one was within the 'AA' rating category. For all of these institutions, the ongoing pandemic exacerbated preexisting enrollment challenges. At the same time, some institutions have demonstrated operating flexibility by effectively implementing expense reductions or rolling out engaging hybrid learning platforms. Looking forward, the effectiveness and rollout of vaccines will be critical in returning to in-person education, although for many institutions, the effects on enrollment and operations over the past year will likely be felt during the coming years.
We continue to assess the pandemic's effect on the creditworthiness of the U.S. not-for-profit higher education sector and may take further actions on specific issuers or groups of issuers as more details become available. Any rating change will include a full review of an entity's individual credit characteristics.
The following tables summarize S&P Global Ratings' quarterly rating actions for U.S. higher education. All rating actions, outlooks, and maintained ratings are based on our "Methodology: Not-For-Profit Public and Private Colleges and Universities" criteria, published Jan. 6, 2016.
Table 1
First-Quarter 2021 U.S. Higher Education Rating Actions | ||||||
---|---|---|---|---|---|---|
Institution | State | Rating to | Rating from | Outlook to | Outlook from | Description |
Agnes Scott College | GA | A- | A | Negative | Negative | Likely enrollment declines in fall 2021; continued trends of full-accrual operating deficits; declining available resources |
Bethel University | MN | BB+ | BBB- | Stable | Negative | Continued enrollment decline; negative operating margins for the past four years; weak and softening available resources |
Calvin University | MI | A- | Stable | New rating | ||
Carlow University | PA | BBB- | BBB | Stable | Negative | Four consecutive years of enrollment decline; declining net tuition revenue leading to operating deficits |
Franklin & Marshall College | PA | A+ | AA- | Stable | Stable | Significantly increased debt load in fiscal 2020 resulting in weakened available resource ratios |
Goucher College | MD | BBB+ | A- | Stable | Negative | Weakening enrollment and demand profile; persistent operating deficits including extraordinary endowment draws; soft available resources |
Missouri Southern State University | MO | BBB- | BBB | Negative | Negative | Recent enrollment declines and weakening demand metrics; sustained operating deficits; depleted available resources |
Oberlin College | OH | AA- | AA | Stable | Negative | Capital needs that will lead to additional debt over the next year; weakening enrollment and demand |
Ringling College of Art and Design | FL | BBB | BBB+ | Stable | Negative | Declining enrollment and applications; supplemental endowment draws to support operations; weakening balance sheet ratios |
University of Northwestern Ohio | OH | BBB- | Stable | New rating | ||
Wayland Baptist University | TX | BBB+ | A- | Stable | Negative | Three consecutive years of operating deficits; received and remedied event of default notice from bond trustee |
Wilkes University | PA | BBB- | BBB | Stable | Negative | Lower available resources brought on by cash-intensive capital projects; two consecutive years of operating deficits |
Table 2
First-Quarter 2021 U.S. Higher Education Outlook Revisions | |||||
---|---|---|---|---|---|
Institution | State | Rating | Outlook to | Outlook from | Description |
Findlay University | OH | BBB- | Stable | Negative | Anticipation of stabilized enrollment and growth in applications; limited impact on financial profile despite pandemic challenges |
Fisher College | MA | BBB+ | Stable | Negative | Generally stable operating performance expected to continue into fiscal 2021; healthy available resource ratios; low debt |
Florida Southern College | FL | A- | Stable | Negative | Growing enrollment; expectation that fiscal 2021 operations will be at least breakeven; stable available resources |
Gallaudet University | DC | A+ | Negative | Stable | Two years of enrollment decline greater than 3%; stagnant student-derived revenues; additional debt increases leverage |
Georgetown University | DC | A- | Negative | Stable | Weak financial performance likely to continue into fiscal 2022; relatively weak available resource ratios |
Governors State University | IL | BB+ | Stable | Negative | Based on recent outlook revision to stable on Illinois general obligation ratings; improved financial performance and balance sheet |
High Point University | NC | A- | Negative | Stable | Pressured available resources due to several capital improvements made in recent years |
Houston Baptist University | TX | BBB- | Stable | Negative | Growing enrollment over the past two years; improved operating performance; increasing available resource ratios |
Howard University | DC | BBB- | Stable | Negative | Solid enrollment trend despite pandemic; improved operating performance; execution of strategic initiatives; balance sheet stability |
Kean University | NJ | A- | Stable | Negative | Continued strong operating margins; enrollment that has remained fairly consistent; stable available resources |
Lesley University | MA | A- | Negative | Stable | Material enrollment declines over the past two years; pressured fiscal 2020 operating results likely to continue |
Long Island University | NY | BBB+ | Stable | Negative | Healthy operating performance in fiscal 2020 with surplus expected in fiscal 2021 |
Lynchburg University | VA | BBB+ | Negative | Stable | Considerable enrollment decline in fall 2020; softening matriculation and selectivity; uncertainty surrounding new pricing strategy |
Marian University | IN | BBB | Stable | Negative | Trend of enrollment growth; impressive operating margins over the past four years with surplus expected in fiscal 2021 |
Marywood University | PA | BB+ | Stable | Negative | Improved available resources ratios and operating performance in recent years; effective expense management measures |
Moravian College | PA | BBB+ | Stable | Negative | Trend of enrollment growth that is expected to continue; return to positive operating performance |
Nevada System of Higher Education | NV | AA- | Negative | Stable | Significant state appropriation cuts for the new biennium; operational impacts facing system due to the pandemic |
New York Law School | NY | BBB- | Stable | Negative | Stable enrollment and demand metrics; operating deficits though reducing reliance on endowment draws; sufficient available resources |
Notre Dame of Maryland University | MD | BBB- | Stable | Negative | Modest growth in enrollment; successful implementation of new academic programs; improvement in operating performance |
Rowan University | NJ | A | Stable | Negative | Stable enrollment profile; improved operating performance with surplus expected for fiscal 2021; sufficient available resources |
University of Alabama Birmingham | AL | AA | Positive | Stable | Favorable performance through pandemic; increasing enrollment trend; healthy financial operations; ample available resources; low debt |
University of South Alabama | AL | A+ | Stable | Negative | Diversification of revenue streams; operating surplus in fiscal 2020 expected to continue in fiscal 2021; improved available resources |
University of Southern California | CA | AA | Negative | Stable | Further weakening of available resource ratios and financial operations due to cost of legal settlements |
Vaughn College of Aeronautics & Technology | NY | BB- | Stable | Negative | Stable operating performance and available resources in line with rating category |
Western Kentucky University | KY | A- | Stable | Negative | Improved operating performance with stable state appropriations; consistent enrollment; adequate available resources |
Yeshiva University | NY | BBB- | Stable | Negative | Stable enrollment and demand metrics; operating deficits and sufficient available resources in line with rating category |
Table 3
First-Quarter 2021 U.S. Higher Education Maintained Ratings | ||||||||
---|---|---|---|---|---|---|---|---|
Institution | State | Rating | Outlook | |||||
Adelphi University | NY | A- | Stable | |||||
Albany Law School | NY | BBB | Stable | |||||
Arizona State University | AZ | AA | Stable | |||||
Ave Maria University | FL | BBB- | Negative | |||||
Babson College | MA | A | Stable | |||||
Ball State University | IN | AA- | Stable | |||||
Benedictine University | IL | BBB | Negative | |||||
Texas A&M University System | TX | AAA | Stable | |||||
Babson College | MA | A | Stable | |||||
Boston College | MA | AA- | Stable | |||||
Buena Vista University | IA | A | Stable | |||||
Centre College of Kentucky | KY | A | Stable | |||||
Champlain College | VT | BBB | Negative | |||||
Colgate University | NY | AA | Stable | |||||
Florida Atlantic University | FL | A+ | Stable | |||||
Florida Atlantic University* | FL | A | Stable | |||||
Florida State University | FL | AA+ | Stable | |||||
Florida State University* | FL | AA- | Stable | |||||
Gannon University | PA | BBB+ | Stable | |||||
Grinnell College | IA | AAA | Stable | |||||
Harvard University | MA | AAA | Stable | |||||
Hawaii Pacific University | HI | BB | Negative | |||||
Indiana University of Pennsylvania | PA | A- | Negative | |||||
Iona College | NY | BBB | Stable | |||||
King's College | PA | BBB+ | Negative | |||||
Lipscomb University | TN | BBB | Negative | |||||
Loyola University of Chicago | IL | A+ | Stable | |||||
McDaniel College | MD | BBB | Stable | |||||
MCPHS University | MA | AA | Stable | |||||
Mercy College | NY | A | Stable | |||||
Michigan State University | MI | AA | Negative | |||||
Mount Saint Mary's University | CA | A | Negative | |||||
Nazareth College of Rochester | NY | BBB+ | Stable | |||||
New England Institute of Technology | RI | A- | Stable | |||||
North Carolina State University at Raleigh | NC | AA | Stable | |||||
Ohio State University | OH | AA | Stable | |||||
Oklahoma State University | OK | AA- | Stable | |||||
Old Dominion University | VA | A+ | Stable | |||||
Pace University | NY | BBB- | Negative | |||||
Princeton Theological Seminary | NJ | AAA | Stable | |||||
Princeton University | NJ | AAA | Stable | |||||
Purdue University | IN | AAA | Stable | |||||
Randolph College | VA | BBB+ | Stable | |||||
Rider University | NJ | BB+ | Negative | |||||
Southern California Institute of Architecture | CA | BBB+ | Stable | |||||
Southern New Hampshire University | NH | A | Positive | |||||
St. John Fisher College | NY | A- | Stable | |||||
Stanford University | CA | AAA | Stable | |||||
Indiana University of Pennsylvania | PA | A- | Negative | |||||
Thomas M. Cooley Law School | MI | BB | Negative | |||||
Transylvania University | KY | A- | Stable | |||||
University of California | CA | AA | Stable | |||||
University of California* | CA | AA- | Stable | |||||
University of Chicago | IL | AA- | Stable | |||||
University of Houston System | TX | AA | Stable | |||||
University of Kansas | KS | AA- | Negative | |||||
University of Massachusetts System | MA | AA- | Negative | |||||
University of Miami | FL | A- | Negative | |||||
University of New Mexico | NM | AA- | Stable | |||||
University of North Carolina at Charlotte | NC | A+ | Stable | |||||
University of North Carolina at Charlotte** | NC | A | Stable | |||||
University of Northern Colorado | CO | A- | Negative | |||||
University of Pittsburgh | PA | AA+ | Stable | |||||
University of Portland | OR | A | Stable | |||||
University of Puerto Rico | PR | CC | Negative | |||||
University of Puget Sound | WA | A+ | Stable | |||||
University of Texas System | TX | AAA | Stable | |||||
University of Utah | UT | AA+ | Stable | |||||
University of Washington | WA | AA+ | Stable | |||||
University System of Maryland | MD | AA+ | Stable | |||||
Virginia Polytechnic Institute & State University | VA | AA | Stable | |||||
Western Illinois University | IL | BB | Negative | |||||
Western Michigan University | MI | A | Stable | |||||
Widener University | PA | BBB | Stable | |||||
Williams College | MA | AA+ | Stable | |||||
Worcester State University | MA | A | Stable | |||||
Yale University | CT | AAA | Stable | |||||
*Auxiliary housing system rating. **Auxiliary housing and dining system rating. |
Related Research
- U.S. Higher Education Rating Actions, 2020, Jan. 28, 2021
- Outlook For Global Not-For-Profit Higher Education: Empty Chairs At Empty Tables, Jan. 20, 2021
- U.S. Public College And University Fiscal 2019 Median Ratios Remain Generally Stable Although Operating Stress Looms, Nov. 24, 2020
- U.S. Not-For-Profit Private College And University Fiscal 2019 Median Ratios: Changing Landscape Leads To Weakening Credit Measures, Nov. 24, 2020
- Credit Conditions North America Q2 2021: As Outlook Brightens, Risks Remain, March 30, 2021
- Economic Outlook U.S. Q2 2021: Let The Good Times Roll, March 24, 2021
- Across U.S. Public Finance, All Sectors Stand To Benefit From The American Rescue Plan, March 18, 2021
This report does not constitute a rating action.
Primary Credit Analyst: | Jessica L Wood, Chicago + 1 (312) 233 7004; jessica.wood@spglobal.com |
Secondary Contacts: | Laura A Kuffler-Macdonald, New York + 1 (212) 438 2519; laura.kuffler.macdonald@spglobal.com |
Nicholas K Fortin, Chicago + 1 (312) 914 9629; Nicholas.Fortin@spglobal.com |
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