Downgrading Elite Colleges

Ry Rivard:

Over the past year and a half, the credit ratings of several prestigious liberal arts colleges have been downgraded or assigned a negative outlook by Moody's Investors Service.
(Note: This article has been updated from an earlier version to note that these ratings were issued over the last 18 months, not the past several months.)

These are institutions -- Haverford College, Morehouse College, Oberlin College and Wellesley College - that top students seek out, yet they are showing small but noticeable signs of fiscal stress several years after the end of the recession. Their downgraded ratings are still better than those of plenty of other institutions, and Moody's has issued plenty of gloomy projects about colleges during the economic downturn. But the recent actions are notable because they affect colleges that are by many measures -- money, prestige, history -- among the most fortunate in the country.

"We do see pressure on small private colleges as a group and that's primarily because they don't have a lot of different things they can do, so they are primarily dependent on tuition revenue," said a Moody's analyst, Edie Behr.

Posted by Jim Zellmer at September 6, 2013 12:02 AM
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