S&P Global Ratings took 17 rating actions and maintained 71 ratings in the U.S. not-for-profit higher education sector during the third quarter of 2024. The 17 rating actions are broken out as follows:
The four upgrades reflect favorable enrollment and demand trends, improved balance-sheet metrics, and increased state appropriations. The two positive outlook revisions were spurred by the maintenance of excellent market position, growth in financial resources, and recent operating surpluses. The one outlook revision to stable from negative was a result of improved demand and progress toward negotiating a forbearance agreement and revised covenant requirements as a result of not complying with current covenants.
The three downgrades and six negative outlook revisions were, inversely, spurred by enrollment declines, increased liabilities, pressured operating performance, weakened financial resources, and/or high endowment draws.
As discussed in our 2024 sector outlook and fiscal 2023 medians reports, credit quality continues to diverge, consistent with our bifurcated outlook. Higher-rated institutions with strong demand, sound resources, and excellent reputations have maintained or strengthened their positions year to date; however, lower-rated institutions, such as those that are less selective or regional, face heightened difficulties, including growing competition, higher expenses, and operating margin pressure. Many of these schools were facing enrollment declines before the pandemic, and consistent and material enrollment decreases have caused deepening deficits. Liquidity and bond covenant pressures have increased for weaker institutions where higher expenses were not matched by revenue growth.
Exacerbating enrollment uncertainties, delays and errors in the processing of the Free Application for Federal Student Aid (FAFSA) for the 2024-2025 academic year meant that colleges and universities had less time to determine financial aid packages, which has affected enrollment for many schools, causing negative effects on matriculation rates and operating budgets.
The following tables summarize S&P Global Ratings' quarterly rating actions for U.S. not-for-profit higher education issuers. The rating actions, outlooks, and maintained ratings are based on our "Global Not-For-Profit Education Providers" criteria, published April 24, 2023.
Table 1
Third-quarter 2024 U.S. higher education rating actions | ||||||
---|---|---|---|---|---|---|
Institution | State | Rating to | Rating from | Outlook to | Outlook from | Description |
Abilene Christian University | TX | A- | Stable | New rating | ||
College For Creative Studies | MI | BBB | BBB+ | Stable | Stable | Limited demand due to niche programming, small and declining enrollment, and continued operating deficits anticipated |
Icahn School of Medicine at Mount Sinai | NY | BBB+ | A- | Negative | Stable | Increased liability owed to hospital partner, thin balance sheet, operating pressure at hospital partner that could stress support |
Illinois State University | IL | A | A- | Stable | Positive | Growing enrollment, increasing cash and investments, improved state credit quality, and additional state support |
Johns Hopkins University | MD | AA+ | AA | Stable | Stable | Favorable demand trend, healthy and improved financial performance, robust philanthropic support, and low debt burden |
Northeastern Illinois University | IL | BBB- | BB+ | Stable | Stable | Increasing state appropriations, moderation of enrollment declines, and improving financial resources |
University of Health Sciences & Pharmacy in St. Louis | MO | BB+ | BBB- | Stable | Stable | Enrollment declines and above-policy endowment draws to support operations |
University of North Carolina at Charlotte | NC | AA- | A+ | Stable | Positive | Gradual improvement in market position and history of robust operating performance |
Table 2
Third-quarter 2024 U.S. higher education outlook revisions | |||||
---|---|---|---|---|---|
Institution | State | Rating | Outlook to | Outlook from | Description |
Barnard College | NY | A | Negative | Stable | Ongoing operating deficits from rapidly rising expenses, and significant management turnover |
College of New Jersey | NJ | A | Negative | Stable | Projected continued operating pressure and modest financial resources relative to operations and debt |
Eastern Illinois University | IL | BBB- | Positive | Stable | Operating surpluses from prudent expense management, increased state support, and growth in financial resources |
Guilford College | NC | BBB- | Negative | Stable | Weakened operating margins from accounting change and debt service covenant violation in fiscal 2023 |
Loyola University New Orleans | LA | BBB | Negative | Stable | Significant enrollment decline from admissions staff turnover and FAFSA delays, and enrollment uncertainty in fall 2025 |
Pacific Lutheran University | WA | BB | Stable | Negative | Improved demand and momentum toward negotiating favorable forebearance agreement and revised covenant requirements |
Saint Francis University | PA | BBB | Negative | Stable | Enrollment declines, operating deficit in fiscal 2023, extraordinary endowment draw in fiscal 2024, and weak balance sheet |
University of Florida | FL | AA+ | Positive | Stable | Exceptional market position and balance sheet metrics, and recent surplus operations |
Western Illinois University | IL | BBB- | Negative | Stable | Past and expected enrollment declines and material operating deficits in fiscal 2024 |
Table 3
Third-quarter 2024 U.S. higher education maintained ratings | |||
---|---|---|---|
Institution | State | Rating | Outlook |
Ave Maria University | FL | BBB- | Stable |
Bowling Green State University | OH | AA- | Stable |
California State University | CA | AA- | Stable |
Centre College of Kentucky | KY | A | Stable |
Colby College | ME | AA | Stable |
Columbia University | NY | AAA | Stable |
Dartmouth College | NH | AAA | Stable |
Delaware State University | DE | BBB- | Stable |
DePaul University | IL | A | Stable |
Drake University | IA | A- | Stable |
Earlham College | IN | A- | Stable |
East Carolina University | NC | AA- | Stable |
Eastern University | PA | BBB- | Stable |
Fairfield University | CT | A | Stable |
Florida International University | FL | AA- | Stable |
Florida State University | FL | AA+ | Stable |
Florida State University System | FL | AA+ | Stable |
George Fox University | OR | A- | Stable |
Grand Valley State University | MI | A+ | Stable |
Hartwick College | NY | BB | Stable |
Hofstra University | NY | A | Stable |
Illinois Wesleyan University | IL | A- | Stable |
Jacksonville State University | AL | BBB | Stable |
Juniata College | PA | BBB | Stable |
King's College | PA | BBB | Stable |
Lawrence Technological University | MI | BBB- | Stable |
Lewis & Clark College | OR | A- | Stable |
Lewis University | IL | BBB | Stable |
Lindsey Wilson College | KY | BBB | Stable |
Loma Linda University | CA | A | Stable |
Long Island University | NY | A- | Stable |
Marywood University | PA | BB+ | Stable |
Meredith College | NC | BBB+ | Negative |
Middlebury College | VT | AA | Stable |
Minot State University | ND | A | Stable |
Morgan State University | MD | A+ | Stable |
Oberlin College | OH | AA- | Stable |
Ohio University | OH | A+ | Stable |
The Ohio State University | OH | AA | Stable |
Oklahoma City University | OK | BBB- | Stable |
The Pennsylvania State University | PA | AA | Stable |
Pepperdine University | CA | AA- | Stable |
Providence College | RI | A | Stable |
Roanoke College | VA | BBB+ | Stable |
Sarah Lawrence College | NY | BBB- | Stable |
St. Ambrose University | IA | A- | Stable |
St. John's University | NY | A- | Stable |
Stanford University | CA | AAA | Stable |
Stevenson University | MD | BBB- | Stable |
Swarthmore College | PA | AAA | Stable |
Syracuse University | NY | AA- | Stable |
Teachers College - Columbia University | NY | A+ | Stable |
Texas Tech University System | TX | AA+ | Stable |
Thomas M Cooley Law School | MI | B- | Negative |
University of Alabama | AL | AA | Stable |
University of Alabama Huntsville | AL | AA- | Stable |
University of Findlay | OH | BBB- | Stable |
University of Houston System | TX | AA | Positive |
University of Idaho | ID | A | Stable |
University of Kentucky | KY | AA+ | Stable |
University of Louisville | KY | A+ | Stable |
University of Maine System | ME | AA- | Negative |
University of Missouri | MO | AA+ | Stable |
University of Montevallo | AL | A- | Stable |
University of North Alabama | AL | A | Stable |
University of North Florida | FL | A | Stable |
University Of Northwestern Ohio | OH | BBB- | Stable |
Wayne State University | MI | A+ | Stable |
Western Carolina University | NC | A+ | Stable |
Williams College | MA | AA+ | Stable |
Worcester State University | MA | A | Stable |
Related Research
- The New "New Normal": Trends In U.S. Higher Education Post-Pandemic Versus Post-Recession, Sept. 25, 2024
- Economic Outlook U.S. Q4 2024: Growth And Rates Start Shifting To Neutral, Sept. 24, 2024
- U.S. Higher Education Rating Actions, Second-Quarter 2024, July 19, 2024
- U.S. State Funding: Propping Up Public Universities In An Increasingly Competitive Landscape, July 18, 2024
- U.S. Not-For-Profit Public College And University Fiscal 2023 Medians: Rising State Funding Offers Hope Amid Continued Demand Pressures, July 18, 2024
- U.S. Not-For-Profit Private College And University Fiscal 2023 Medians: Inflated Expenses, Deflated Support Contribute To Weaker Margins, July 18, 2024
- Rising Covenant Violations Are A Symptom Of The Pressure Facing Lower-Rated U.S. Higher Education Entities, June 20, 2024
- U.S. Higher Education Rating Actions, First-Quarter 2024, April 18, 2024
- U.S. States 2024 Outlook: Credit Stability Endures In Unstable Times, Jan. 4, 2024
- Outlook For Global Not-For-Profit Higher Education: Credit Quality Divergence Continues, Dec. 7, 2023
- Historical Peak Of Negative Outlooks Signals Challenges Remain For U.S. Not-For-Profit Acute Health Care Providers, Dec. 6, 2023
Cheyenne Barber and Kwahmyre Barbour contributed research for this report.
This report does not constitute a rating action.
Primary Credit Analyst: | Stefan Turcic, New York (1) 212-438-0559; stefan.turcic@spglobal.com |
Secondary Contacts: | Laura A Kuffler-Macdonald, New York + 1 (212) 438 2519; laura.kuffler.macdonald@spglobal.com |
Jessica L Wood, Chicago + 1 (312) 233 7004; jessica.wood@spglobal.com |
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