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U.S. Higher Education Rating Actions, Third Quarter 2020

During the third quarter of 2020 (July 1-Sept. 30), S&P Global Ratings maintained 25 ratings and took 16 rating actions in the U.S. not-for-profit higher education sector. Of the 16 rating actions, six were downgrades, five were outlook revisions to negative, one was an outlook revision to stable, two were assignments of new ratings, and two were rating withdrawals.

On Aug. 18, 2020, we published "Not-For-Profit Higher Education Mid-Year Sector View: Fall 2020 Enrollments Will Drive Credit," which outlines S&P Global Ratings' observations from the first half of the year and expectations going forward. The report posits that weakened enrollments due to COVID-19-related social distancing measures will pressure net tuition and auxiliary revenues through fiscal 2021 and beyond. In addition, as the uneven economic recovery continues, philanthropy may stumble while lower state revenues could lead to cuts in appropriations to public colleges and universities. In the face of expected revenue declines, institutions have been curtailing expenses; instituting hiring freezes; and, in some cases, have discussed or executed furloughs and layoffs. Through the second half of the year, we expect financial operations will become increasingly challenging for more colleges and universities. Although the Coronavirus Aid, Relief, and Economic Security (CARES) Act did provide $14 billion in federal relief funds directly to institutions, for most colleges and universities, lost revenue from room and board and other auxiliary sources was much more material than new costs related to COVID-19. As the coronavirus and enrollment landscapes evolve, support from the federal government will remain a critical part of the overall financial health of colleges and universities.

We expect to continue to update our credit rating opinions as economic data, visibility on fall enrollment, and fiscal 2021 forecasts become available, in line with our methodology and policies. We continue to assess the pandemic's impact on the creditworthiness of the not-for-profit higher education sector and could 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 issuers. 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

Third-Quarter 2020 U.S. Higher Education Rating Actions And Outlook Revisions
Institution State Rating to Rating from Outlook to Outlook from Rating action Description

Brown University

RI AA+ AA+ Negative Stable Rating affirmed; outlook revised to negative Pressured balance sheet ratios due to increase in debt

Des Moines University Osteopathic Medical Center

IA BBB+ Stable Rating initially assigned New rating

D'Youville College

NY BBB Stable Rating initially assigned New rating

East Carolina University

NC AA- AA- Negative Stable Rating affirmed; outlook revised to negative Pressured enrollment; weakening selectivity and matriculation; decline in available resource ratios

Hendrix College

AR BBB- BBB Negative Negative Rating lowered Six consecutive years of enrollment decline; high tuition discount rate; accelerating negative operating performance

Idaho State University

ID NR A+ NR Stable Rating withdrawn Rating withdrawn at issuer's request

Lewis University

IL BBB BBB+ Stable Negative Rating lowered; outlook revised to stable Softening operating performance and reliance on credit lines; deteriorating operating liquidity

Manchester University

IN BBB+ A- Stable Negative Rating lowered; outlook revised to stable Declining enrollment and demand metrics; increasing deficits that could be exacerbated by pandemic

Morgan State University

MD A+ A+ Negative Stable Rating affirmed; outlook revised to negative Continued operating deficits; pressured balance sheet due to recent loans and new housing project

Ranken Technical College

MO NR A- NR Stable Rating withdrawn Rating withdrawn at issuer's request

Regent University

VA BB+ BB+ Stable Negative Rating affirmed; outlook revised to stable Significant enrollment growth; health operating surpluses without utilizing endowment draws

Rider University

NJ BB+ BBB- Negative Negative Rating lowered Trend of operating deficits expected to continue; increased debt led to pressured available resource ratios

Sarah Lawrence College

NY BBB- BBB Stable Negative Rating lowered; outlook revised to stable Additional debt pressures available resource ratios; pandemic and economic conditions could pressure enrollment and operating performance

Trinity University

TX AA- AA Stable Stable Rating lowered Series 2020 issuance led to decreased available resource ratios; expected future capital spending

University of Rochester

NY AA- AA- Negative Stable Rating affirmed; outlook revised to negative Softening operations in fiscal 2020; weak available resources relative to expenses and pro forma debt

Wayne State University

MI A+ A+ Negative Stable Rating affirmed; outlook revised to negative Accreditation issues with School of Medicine; pressure at board level; thinning available resources and operating margins

Table 2

Third-Quarter 2020 U.S. Higher Education Maintained Ratings
Institution State Rating Outlook

Bates College

ME A+ Stable

California State University

CA AA- Stable

DePaul University

IL A Stable

Duquesne University

PA A Stable

Fairfield University

CT A- Stable

Harrisburg University of Science and Technology

PA BB Negative

Illinois State University

IL A- Negative

Jacksonville State University

AL A- Negative

Lafayette College

PA A+ Stable

Lehigh University

PA AA- Stable

Loma Linda University

CA A Stable

Michigan State University

MI AA Negative

New York Institute of Technology

NY BBB+ Stable

Quinnipiac University

CT A- Stable

Reed College

OR AA- Stable

Sacred Heart University

CT A Stable

Saint Elizabeth University

NJ BB Negative

St. Louis College of Pharmacy

MO BBB Negative

St. Louis University

MO AA- Negative

Sweet Briar College

VA BB- Stable

Texas A&M University System

TX AAA Stable

University of Chicago

IL AA- Stable

University of Southern Indiana

IN A Stable

University of Virginia

VA AAA Stable

Winston-Salem State University

NC BBB+ Negative

Related Research

This report does not constitute a rating action.

Primary Credit Analyst:Jessica L Wood, Chicago (1) 312-233-7004;
Secondary Contacts:Laura A Kuffler-Macdonald, New York (1) 212-438-2519;
Nicholas K Fortin, Boston + 1 (312) 914 9629;

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