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Depressed Family Income Spells Trouble For Colleges, Moody's Warns

Families Are Getting Poorer, And That Spells Trouble For Colleges
Reuters
** ADVANCE FOR WEEKEND AUG. 5-6 ** Students walk outside the library at the University of Idaho in Moscow, Idaho, on Thursday, Aug. 3, 2006. College recruiting has become a national competition, with private and even public universities aggressively siphoning students from out-of-state in the quest to improve applicant quality, geographic diversity and to attract more students to pay higher tuition. (AP Photo/Geoff Crimmins)
** ADVANCE FOR WEEKEND AUG. 5-6 ** Students walk outside the library at the University of Idaho in Moscow, Idaho, on Thursday, Aug. 3, 2006. College recruiting has become a national competition, with private and even public universities aggressively siphoning students from out-of-state in the quest to improve applicant quality, geographic diversity and to attract more students to pay higher tuition. (AP Photo/Geoff Crimmins)

Nov 22 (Reuters) - More than 40 percent of U.S. public universities and nonprofit colleges face lower or anemic tuition revenue growth and declining enrollment in fiscal 2014, according to a survey released by Moody's Investors Service on Friday.

The rating agency said the negative credit trend was spreading in the higher education sector after cumulative years of depressed family income and net worth as well as dimmer job prospects for recent graduates.

"As this contagion spreads through higher education, tuition-dependent colleges and universities, both public and private, will be especially challenged to sustain competitive position and credit strength," Moody's said.

Regional public universities and small private colleges lacking a well-defined niche were most at risk, Moody's added. The survey is available to Moody's subscribers at: https://www.moodys.com/research/Weakened-Tuition-Revenue-Plagues-US-Higher-Education--PBM_PBM160487.

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