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U.S. Not-For-Profit Private College And University Fiscal 2022 Medians And Ratios: As Pandemic Risks Abate, Enrollment Pressures Persist

(Editor's Note: This article, originally published July 12, 2023, is being republished to provide the link to the medians interactive dashboard.)

As COVID-19 risks have subsided, most U.S. not-for-profit private higher education institutions across rating categories returned to pre-pandemic operations in fiscal 2022. However, because of persistent demographic shifts and students' affordability concerns, enrollment continues to decline in most rating categories. Higher Education Emergency Relief Funds (HEERF) have generally offset both one-time expenses associated with the return to pre-pandemic operations and the ongoing enrollment pressure, resulting in positive median operating performance across most rating categories, despite these challenges. While market volatility in fiscal 2022 reduced financial resources across the sector, median levels of cash and investments remain elevated compared with pre-pandemic levels. Finally, higher total adjusted operating expenses and the increase in the median total debt outstanding notwithstanding, balance-sheet ratios are stronger than they were before the pandemic.

Chart 1


Full details of the medians are available through our interactive dashboard, by clicking here: The below image is a preview.


Rating Distribution And Characteristics

S&P Global Ratings maintained 273 debt ratings on U.S. not-for-profit private colleges and universities as of June 1, 2023. Since our last published medians report on July 12, 2022, we have assigned ratings to four new private institutions. On April 24, 2023, S&P Global Ratings released revised criteria for the higher education sector (see "Global Not-For-Profit Education Providers"). In accordance with our criteria, our analytical metrics evaluate both the enterprise and financial risk profiles. Many institutions' overall demand profiles were pressured during the pandemic, but we believe most of these pandemic-related concerns have subsided. As a result, median full-time-equivalent (FTE) enrollment rose modestly in fiscal 2022 (fall 2021) from fiscal 2021 (fall 2020) but remains below pre-pandemic levels; the highest rating categories saw the most improvement. Furthermore, illustrating the highly competitive environment for students, median demand metrics weakened slightly, including matriculation, selectivity, and graduation rates. Because of the pandemic, most of the private colleges and universities we rate did not require standardized test scores as part of the application process, and very few are requiring them as of June 1, 2023, leading to higher application rates but lower selectivity and slightly lower matriculation rates.

For fiscal 2022, financial performance was still bolstered by federal COVID-19 relief funding, with most colleges and universities posting strong operating margins. However, for fiscal 2023, with the exhaustion of relief funds combined with rising expenses, we anticipate that overall operating margins will be weaker, which could depress financial resources.

In our assessment of the medians (tables 1 and 2), we observed the following:

  • Median FTE enrollment remained relatively flat (0.3% increase), thanks mostly to growth at the highest-rated institutions (14.8% at 'AAA' rated universities), offset by continued enrollment decreases at lower-rated institutions (2.2% and 3.8% at the 'BBB' and speculative-grade levels, respectively).
  • Other demand metrics including median selectivity, matriculation, and graduation rates remained at or below fiscal 2021 levels.
  • Median operating performance across all rating categories, except for speculative-grade, remained positive, and the overall median was only slightly weaker than that of fiscal 2021.
  • As the cost of borrowing rose, debt burdens increased among the 'AA', 'A', and 'BBB' rating categories.
  • Balance-sheet ratios compared to both debt and total adjusted operating expenses remain above pre-pandemic levels, albeit slightly lower than in fiscal 2021.

Table 1

Private colleges and universities -- sectorwide ratios
2018 2019 2020 2021 2022
Sample size 252 260 265 276 273
Total FTE enrollment
Median 3,275 3,199 3,174 3,004 3069
Mean 6,398 6,343 6,331 6,088 5944
FTE enrollment change (%)
Median 0.3 0.4 -0.3 -2.7 0.3
Mean -0.4 -0.1 -0.5 -2.6 1.4
Undergraduates as a % of total enrollment
Median 75.2 75.9 73.5 79.1 74.3
Mean 74.1 74.4 72.7 77.0 73.7
First year acceptance rate
Median 62.4 65.5 66.0 71.4 74.0
Mean 56.1 57.0 58.2 61.3 63.4
First year matriculation rate (%)
Median 22.0 22.0 21.0 18.8 18.6
Mean 26.2 26.1 25.3 23.1 24.0
Average SAT
Median 1,206 1,213 1,206 1,192 1,219
Mean 1,228 1,232 1,232 1,222 1,248
Average ACT
Median 26 26 26 26 27
Mean 26 27 27 27 27
Retention rate (%)
Median 85.0 83.1 84.0 83.0 83.8
Mean 83.9 83.3 83.5 82.2 82.3
Six-year graduation rate (%)
Median 71.3 70.9 71.4 71.6 71.3
Mean 70.8 70.9 71.5 71.5 71.6
In-state students (%)
Median 53.0 52.7 54.5 54.0 53.0
Mean 50.5 51.3 51.7 51.8 49.5
Net adjusted income
Median 0.8 0.9 0.3 1.8 1.1
Mean 1.0 1.3 0.7 2.5 1.7
Net tuition revenue
Median 66,491 66,470 63,919 61,366 60,882
Mean 150,291 156,144 158,790 154,954 168,148
Student-generated revenue (%)
Median 84.8 84.0 84.0 81.7 79.7
Mean 77.2 77 77.1 74.5 73.6
Auxiliary revenue (%)
Median 11.4 11.4 9.9 7.6 10.4
Mean 11.3 11.2 9.5 8.0 10.3
Grants and contracts revenue (%)
Median 1.2 1.2 2.2 4.4 5.0
Mean 3.6 3.5 4.3 6.7 6.3
Gifts and pledges revenue (%)
Median 2.0 1.8 1.9 1.9 1.9
Mean 2.5 2.6 2.6 2.7 2.7
Financial aid burden
Median 26.6 27.6 28.9 30.0 29.5
Mean 25.2 25.9 27.0 28.4 27.9
Instruction expense (% of expenses)
Median 26.9 27.1 27.1 26.0 25.5
Mean 27.9 28.3 28.2 27.1 26.5
Tuition discount rate (%)
Median 39.2 40.0 41.0 41.9 43.3
Mean 39.2 40.1 41.1 42.8 44.1
Cash and investments ($)
Median 218,630 224,553 225,569 281,617 257,427
Mean 1,536,554 1,601,177 1,683,629 2,223,590 2,121,390
Cash and investments to operations (%)
Median 132.2 126.6 126.5 161.4 141.6
Mean 204.1 196.4 195.4 256.9 221.3
Cash and investment to debt (%)
Median 259.1 264.1 245.6 298.3 281.2
Mean 341.6 339.3 322.9 398.4 361.9
Total debt outstanding ($000s)
Median 96,633 97,015 98,420 96,580 105,384
Mean 374,727 373,862 421,814 448,459 467,667
Average age of plant (years)
Median 14.2 14.4 14.8 15.1 15.6
Mean 14.6 14.9 15.4 15.7 16.2
Maximum annual debt service burden (%)
Median 4.2 4.1 4.0 4.4 4.3
Mean 4.8 4.6 4.8 5.0 4.9
Total debt per FTE ($)
Median 28,471 28,964 31,463 33,207 34,791
Mean 49,548 48,962 53,614 57,727 57,460
Endowment per FTE
Median 55,265 54,827 53,884 69,511 68,781
Mean 188,690 186,869 185,774 257,903 225,958

The sample size for our private college and university median ratios for fiscal 2022 was 273 (table 1). Consistent with previous years, we do not include universities and colleges that we consider specialty schools in our ratio calculations. Given the niche focus of these institutions (such as medical schools, stand-alone law schools, and music or arts schools), certain metrics used to measure credit quality might be skewed and would not be directly comparable with those of similarly rated institutions with a wider array of program offerings.

Our analysis of any particular institution involves a holistic view of its creditworthiness, which includes a qualitative assessment that is not captured in this article. The mean or median metrics (table 2) should not be considered thresholds to achieving a particular rating.

Table 2

Private colleges and universities -- fiscal 2022 ratios
AAA AA A BBB Speculative-grade Sectorwide
Sample size 11 45 91 104 22 273
FTE (full-time equivalent) enrollment
Median 11,837 7,733 3,352 2,484 2,219 3,069
Mean 11,829 11,088 6,763 3,120 2,448 5,944
FTE change (%)
Median 14.8 6.9 -0.2 -2.2 -3.8 0.3
Mean 13.4 7.6 0.2 -0.8 -1.6 1.4
Undergraduates (% of total enrollment)
Median 51.2 67.4 81.6 71.5 74.0 74.3
Mean 59.3 69.3 79.2 71.9 75.6 73.7
Freshman acceptance rate (%)
Median 5.3 17.8 72.9 80.3 81.9 74.0
Mean 6.1 22.6 68.2 79.1 80.6 63.4
Freshman matriculation rate (%)
Median 66.2 38.8 17.8 15.2 15.4 18.6
Mean 65.8 39.5 19.8 18.0 17.8 24.0
Average SAT score
Median 1499 1434 1225 1149 1102 1219
Mean 1502 1442 1247 1166 1103 1248
Average ACT score
Median 34 33 27 25 20 27
Mean 34 33 28 25 24 27
Retention rate (%)
Median 96.5 95 86.0 77.0 69.4 83.80
Mean 96.7 94.1 84.4 76.4 70.2 82.3
Six-year graduation rate (%)
Median 95.0 90.3 74.5 64.4 57.9 71.3
Mean 94.5 89.4 73.9 63.2 54.4 71.6
Total adjusted operating revenue
Median 2,665,251 693,572 234,650 111,191 95,479 174,508
Mean 3,289,594 2,537,491 420,081 161,853 101,488 760,679
Total adjusted operating expenses
Median 2,333,713 661,052 223,552 116,822 95,676 169,861
Mean 3,139,599 2,433,847 405,616 159,880 102,720 732,077
Net tuition revenue
Median 387,874 269,660 85,091 46,010 35,788 60,882
Mean 429,568 414,139 165,283 63,877 39,037 168,148
Net adjusted operating margin (%)
Median 3.9 4.1 0.7 0.7 -0.9 1.1
Mean 7.8 3.7 2.0 0.3 -0.3 1.7
Student-generated revenue (%)
Median 33.5 59.7 81.0 82.7 81.6 79.7
Mean 33.5 53.8 79.4 80.5 78.0 73.6
Auxiliary revenue (%)
Median 3.7 8.8 11.1 10.7 12.0 10.4
Mean 4.7 8.3 11.2 10.6 11.5 10.3
Grants and contracts revenue (%)
Median 13.6 5.4 4.6 4.9 5.2 5.0
Mean 14.5 8.5 5.6 4.8 7.2 6.3
Gifts and pledges revenue (%)
Median 2.7 3.0 1.6 1.6 2.3 1.9
Mean 3.2 3.3 2.3 2.5 3.4 2.7
Financial aid burden (%)
Median 14.3 20.4 30.5 32.0 32.0 29.5
Mean 14.6 18.7 29.8 31.3 29.2 27.9
Instruction expense (% of expenses)
Median 34.9 27.3 25.0 24.1 23.0 25.5
Mean 33.3 29.5 26.0 26.0 22.5 26.5
Tuition discount (%)
Median 47.3 39.5 42.4 45.2 45.6 43.3
Mean 47.3 40.4 43.6 45.5 44.6 44.1
Endowment market value ($000s)
Median 13,279,846 2,391,304 316,898 104,416 47,178 220,712
Mean 20,764,417 4,008,970 480,339 141,236 49,559 1,739,140
Cash and investments
Median 16,014,726 2,852,879 386,704 128,133 53,098 257,427
Mean 24,494,560 5,260,146 600,121 164,326 58,723 2,121,390
Cash and investments to operations (%)
Median 951.9 377.8 157.0 95.2 57.7 141.6
Mean 946.3 426.7 188.4 118.1 62.9 221.3
Cash and investments to debt (%)
Median 882.2 463.1 355.7 184.5 110.7 281.2
Mean 983.1 536.6 379.3 249.7 152.8 361.9
Total debt outstanding ($000s)
Median 2,496,373 596,725 130,281 65,565 49,683 105,384
Mean 2,792,590 1,416,332 226,269 109,219 57,743 467,667
Average age of plant (years)
Median 13.2 14.4 16.1 16.1 15.8 15.6
Mean 13.4 15.4 16.1 16.7 17.1 16.2
Current maximum annual debt service burden (%)
Median 6.0 5.2 4.0 4.1 4.1 4.3
Mean 7.5 5.8 4.4 4.7 5.1 4.9
Total debt per FTE ($)
Median 199,921 90,361 35,187 26,698 25,352 34,791
Mean 232,204 128,285 39,011 31,389 24,774 57,460
Endowment market value per FTE ($)
Median 1,651,659 436,821 75,115 35,914 20,281 68,781
Mean 1,876,965 514,471 116,269 57,765 27,151 225,958

Ratings Stabilize As Pandemic Uncertainty Recedes

Since June 15, 2022, S&P Global Ratings has assigned four new credit ratings: two in the 'BBB' category and two in the speculative-grade category. In addition, we lowered 19 ratings, including two to the 'BBB' category from the 'A' category. We raised nine ratings, including one to 'AAA' from the 'AA' category, one to the 'A' category from the 'BBB' category, and three to the 'BBB' category from the speculative-grade category. All other rating actions, positive or negative, remained in the same rating category.

We continue to see a standard rating distribution, with 71% of rated private higher education institutions in the 'A' and 'BBB' categories (chart 2). The outlook distribution reflects the abating pandemic uncertainty, with 85% of the ratings having stable outlooks as of June 1, 2023, a significant improvement from 80% on June 15, 2022. In addition, only 10% of our ratings had a negative outlook and 5% of ratings had a positive outlook, considerably improved from 16% and 4%, respectively, as of June 15, 2022 (chart 4). The decrease in negative outlooks and increase in stable outlooks reflect that most private colleges and universities returned to operational normality in fiscal 2022.

Chart 2


Chart 3


Chart 4


Enrollment And Demand Metrics

Post-COVID enrollment exemplifies growing divergence in the sector

Ongoing concerns from the pandemic resulted in FTE enrollment declines across all rating categories in fiscal 2021, and while many of these concerns had eased by the fall semester in fiscal 2022, FTE enrollment remained relatively flat overall (table 1). However, this stability was not experienced equally across rating categories, with FTE enrollment growing at most 'AAA' and 'AA' rated universities even compared with pre-pandemic levels, while the other rating categories faced continued FTE enrollment losses even compared with fiscal 2021. These declines increased at the lower-rated categories, with 'BBB' and speculative-grade median enrollments falling at a greater percentage than they did in fiscal 2021 (chart 5). This dichotomy illustrates that demand for colleges with stronger market position, high selectivity, high retention rates, and, typically, exceptional student quality has returned to pre-pandemic levels or better, despite the swelling competition for a shrinking population of college-age students across many areas of the county. Meanwhile, private institutions with less geographic diversity, limited program offerings, or weaker market position (especially on the lower end of the rating spectrum) are experiencing falling enrollment as a result of the increased competition.

In response, many of these lower-rated institutions have expanded recruitment strategies to attract international and out-of-state students, and have supplemented their offerings to include graduate and certificate programs. Despite these efforts, undergraduate enrollment continues to drop and median tuition discount rates continue to rise (chart 6) for most of the lower rating categories, as the competition for students intensifies. We expect the increasing struggle for students will result in the continuation of the current trends and widening disparity between universities in the higher and lower rating categories.

Chart 5


Chart 6


Most other demand metrics remain at or near pandemic levels

As a result of the pandemic, most private colleges and universities transitioned to test optional, no longer requiring SAT or ACT scores as part of the application process, in fiscal 2020. However, post-pandemic, many institutions are still not requiring applicants to submit test scores, and only about 80% of our rated schools are reporting test scores. Historically, the shift to test optional has resulted in improved reported test scores, in part due to self-selectivity, as only applicants with stronger scores submit their score with their application, while applicants with weaker scores elect not to submit theirs. This selective reporting has resulted in both median ACT and SAT scores being stronger than pre-pandemic levels (table 1).

One side effect of the move to a test-optional application process has been an increase in freshman applications for many private higher education institutions. However, median selectivity and matriculation rates have continued to weaken from pandemic levels, further illustrating the highly competitive environment. And while private colleges and universities have invested in initiatives to ensure student success and to better justify the costs associated with a college education, retention and graduation rates remained relatively flat in spite of the pressure of the pandemic (table 1). Many of these demand metrics are lagging factors, so it may take more time to see the full effect of the pandemic, specifically in graduation rates. We expect that acceptance and matriculation rates could continue to drop for many private higher education institutions that are no longer requiring tests and are facing more intense competition for college-aged students. Given the passing of the recent affirmative action ruling, we will probably see colleges increase targeted recruitment and expand financial aid programs, while a broader move to test optional is expected across the industry.

Financial Metrics

Revenue diversity is slow to return to pre-pandemic levels

For fiscal 2022, private colleges and universities returned to in-person instruction, with student housing opening to full capacity. The reopening of campuses boosted auxiliary revenue, which represented a larger portion of total adjusted operating revenue while remaining considerably lower than pre-pandemic levels (chart 7). Lagging auxiliary revenues were offset by federal money, as the majority of private colleges and universities benefited from the remaining HEERF in fiscal 2022, resulting in an increase in the percentage of revenue derived from government grants and contracts (chart 8). We expect that the vast majority of universities have now exhausted remaining COVID-19 relief funds, resulting in grants and contracts returning to historical levels. However, with increasing enrollment pressures, student-related revenues such as auxiliary revenue could be slower to return to pre-pandemic levels.

Chart 7


Chart 8


COVID-19 funds bolstered operating performance in fiscal 2022

During fiscal 2022, many private colleges' and universities' total adjusted operating expense were elevated because of one-time costs associated with fully reporting campuses. The increase in total adjusted operating expenses resulted in slightly weaker median operating performance than fiscal 2021's (table 1). However, because many private colleges and universities used their remaining HEERF money to stabilize operations, median operating performance remained positive and well above pre-pandemic levels. However, further illustrating the widening contrast between rating categories, speculative-grade private institutions produced modest median deficits as they continued to experience more severe drops in net tuition revenue and high competition for both graduate and undergraduate students.

Financial aid remains a key factor in attracting students. We assess institutional financial aid spending through the tuition discount rate, which is calculated as financial aid as a percentage of gross tuition and fees. Tuition discounting has increased across rating categories except for 'AAA' and 'AA', with the lower categories seeing the largest year-over-year growth. For higher-rated private institutions, median tuition discount rates have returned to pre-pandemic levels (chart 6), while lower-rated private colleges and universities have seen rising tuition discount rates for the past six years. In addition, while the higher-rated universities can often offset the costs associated with financial aid thanks to strong fundraising and healthy endowments, we view the higher discount rates at lower-rated universities to be a greater risk due to limited financial flexibility and more modest balance sheets to support higher levels of aid. Because of intensifying competition in the sector as a result of a shrinking pool of college-age students, combined with the increased concerns surrounding college affordability, discount rates are likely to rise further for most rating categories. In addition, as most private colleges and universities have exhausted their remaining HEERF money, and at the same time are facing inflation pressure, we expect that some will still see pressured operations, specifically at the lower end of the rating spectrum.

Chart 9


Despite market volatility, investments remain stronger than pre-pandemic levels

Fiscal 2021 market returns were unprecedented and robust, bolstering total endowment funds. However, in fiscal 2022, some market volatility resulted in decreases in median endowments across all rating categories (table 3), most significantly speculative-grade schools. However, they remain considerably stronger than pre-pandemic levels. Although these levels of endowment still provide some financial cushion for universities, market volatility and high inflation have already started to mute fundraising, specifically at the lower end of the rating spectrum, which could suppress endowment growth.

Table 3

Private colleges and universities -- endowment change ($000s)
2021 % change 2022
AAA 14,349,970 -7.5 13,279,846
AA 2,559,082 -6.6 2,391,304
A 321,376 -1.4 316,898
BBB 108,836 -4.1 104,416
Speculative-grade 57,496 -17.9 47,178
Sectorwide 242,543 -9.0 220,712
Source: S&P Global Ratings.
Cash and investments remain elevated

With the adoption of the revised higher education criteria on April 24, 2023, we no longer use expendable resources to evaluate balance-sheet strength. Rather, we now use "cash and investments" as an input into financial metrics in place of "available resources" (i.e., expendable resources or unrestricted net assets). Recent market volatility resulted in a modest 8.6% decrease in median cash and investment levels in fiscal 2022 from fiscal 2021. However, this was partially offset by positive operating performance and robust market returns in fiscal 2021, resulting in cash and investments remaining higher than pre-pandemic levels across rating categories. Similarly, cash and investments compared to operations remain stronger than pre-pandemic levels (chart 10), though the higher operating expenses as a result of retuning to full operations deflate these ratios slightly.

The higher cost of borrowing in fiscal 2022 did little to deter institutions in most rating categories from issuing additional debt. Median total debt outstanding increased in most categories but dropped in the 'AAA' and speculative-grade categories. Similarly, debt per FTE rose in all categories except 'AAA' (chart 12). Despite the increased debt, the median maximum annual debt service burden, calculated as a percentage of total operating expenses, fell slightly in fiscal 2022 to 4.3% from 4.4% in fiscal 2021. Finally, across the higher rating categories, cash and investment ratios (compared to debt) weakened slightly, falling just below pre-pandemic levels; however, in the 'A', 'BBB', and speculative-grade categories, they remained higher than pre-pandemic levels.

Chart 10


Table 4

Private colleges and universities -- change in debt ($000s)
2021 % change 2022
AAA 2,661,558 -6.2 2,496,373
AA 534,327 11.7 596,725
A 120,721 7.9 130,281
BBB 61,241 7.1 65,565
Speculative-grade 50,416 -1.5 49,683
Sectorwide 97,400 8.2 105,384

Chart 11


Chart 12


Credit Quality By Enrollment Size

Intensifying competition for undergraduate students, rising expenses, and increasing tuition discount rates are challenges for most private colleges and universities. However, these conditions are particularly vexing for smaller institutions (those with fewer than 1,400 FTE students), which typically lack the revenue diversity of the very large ones (those with more than 15,000 FTE students). In addition, most of the larger private colleges and universities have more revenue diversity, healthy endowments, and a broader alumni base to assist with fundraising, resulting in a higher degree of financial flexibility. While institutions with fewer than 1,400 FTE students are not precluded from higher ratings, there is some correlation between enrollment size and overall credit characteristics. In the 'AAA' and 'AA' rating categories, there are no private institutions with fewer than 1,400 FTE students, while schools with more than 15,000 FTE students account for 27% of 'AAA' ratings and 29% of the 'A' rating category for all private higher education institutions. In addition, within the 'A' rating category, 13% of institutions have more than 15,000 FTE students and only 8% have fewer than 1,400 FTE students. None of the institutions in the 'BBB' or speculative-grade categories have more than 15,000 FTE students, while 16% of institutions in the 'BBB' category and 27% in the speculative-grade category have fewer than 1,400 FTE students (chart 13).

Chart 13


Comparing metrics, especially those associated with demand and financial flexibility, is particularly revealing (table 5). Total FTE enrollment at the larger institutions typically consists of a smaller percentage of undergraduate enrollment, a stronger selectivity rate, and greater geographical diversity, signifying a higher resilience to demographic changes. As a result of the higher levels of demand and a strong graduate presence, larger private colleges and universities typically have significantly lower tuition discount rates, which, when combined with more diverse revenue sources, leads to more positive operations.

One the other hand, very small private colleges and universities tend to face a more competitive environment for first-year students due to typically more limited geographic diversity and more modest course offerings. This competition leads to more aggressive tuition discounting and ultimately weaker total adjusted operating performance. Although many of the smaller institutions have a relatively strong balance sheet with a limited amount of debt per FTE student, we do not consider this enough to offset the highly competitive enrollment environment, which we anticipate will intensify over the next few years.

Consistent with our methodology for this report, we have excluded specialty schools from table 5 as well as from chart 13. Although there are many specialty schools that would be classified as very small, none of them have an FTE population of more than 15,000.

Table 5

Private colleges and universities -- fiscal 2022 ratios by full-time equivalent enrollment size
More than 15,000 Fewer than 1,400 All private institutions
Sample size 28.0 30.0 273.0
Undergraduate as a % of total enrollment 46.3 95.2 74.3
Freshman acceptance rate (%) 13.3 74.6 74.0
Six-year graduation rate (%) 87.9 64.2 71.3
Net adjusted operating margin (%) 4.2 -0.9 1.1
Student-generated revenue dependence (%) 48.1 72.1 79.7
Tuition discount rate (%) 36.9 58.2 43.3
Cash and investments to operations (%) 159.0 194.2 141.6
Cash and investments to debt (%) 354.9 434.5 281.2
Total debt per full-time equivalent ($) 78,504 33,455 34,791

What We're Watching

Fall 2023 enrollment

Due to the growing competition for first-year students, we expect that enrollment pressure will persist for smaller, more regional and lower-rated private higher education institutions. In addition, we expect that most private colleges and universities will continue to leverage early decisions, focus on recruiting a more geographically diverse student body, and will look to modify their program offerings to meet market demand and demographic pressure. In addition, we expect that most institutions will remain test optional at least for the near term, which could weaken selectivity further. Finally, we believe the cost of higher education will remain an important tool in student recruitment, leading to continued increases in tuition discounting.

Operations without relief funds

We anticipate operations will remain pressured as most private colleges and universities have exhausted their HEERF money. In addition, while many invested in long-term cost-saving programs during the pandemic, we expect that these savings may be offset by higher expenses as a result of inflation.

Financial resources

Market volatility could result in more modest amounts of cash and investments. However, because many private higher education institutions recorded substantial net growth of financial resources from fiscal years 2021 and 2022, we expect that balance sheets will remain at or above pre-pandemic levels, specifically in the higher rating categories.

Capital investments

With the current rate of inflation, we expect that many private colleges and universities might struggle to fund capital projects, resulting in changes in overall capital plans with the focus remaining on attracting and retaining students. In addition, as hybrid work has become more normal for many private colleges and universities, they may elect to alter previously designed capital plans to better repurpose space on campuses. In this environment, we expect that institutions with more financial resources will differentiate themselves and improve their overall demand profile, resulting in a widening gap between rating categories within the sector.


Table 6

Private colleges and universities by rating
Institution State Outlook
Columbia University NY Stable
Grinnell College IA Stable
Harvard University MA Stable
Massachusetts Institute of Technology MA Stable
Pomona College CA Stable
Princeton University NJ Stable
Rice University TX Stable
Stanford University CA Stable
Swarthmore College PA Stable
Vanderbilt University TN Stable
Yale University CT Stable
Amherst College MA Stable
Brown University RI Stable
Bryn Mawr College PA Stable
Dartmouth College NH Positive
Davidson College NC Stable
Duke University NC Stable
Northwestern University IL Stable
Smith College MA Stable
University of Pennsylvania PA Stable
University of Richmond VA Stable
Washington University MO Stable
Wellesley College MA Stable
Williams College MA Stable
Carnegie Mellon University PA Positive
Colby College ME Positive
Colgate University NY Stable
Colorado College CO Stable
Cornell University NY Stable
Denison University OH Stable
Emory University GA Stable
Johns Hopkins University MD Stable
Middlebury College VT Stable
University of Southern California CA Negative
Wake Forest University NC Stable
Washington & Lee University VA Stable
Wesleyan University CT Stable
Boston College MA Stable
Boston University MA Stable
California Institute of Technology CA Stable
Case Western Reserve University OH Stable
College of the Holy Cross MA Stable
Haverford College PA Stable
Lehigh University PA Stable
New York University NY Stable
Oberlin College OH Stable
Pepperdine University CA Stable
Reed College OR Stable
Saint Louis University MO Stable
Southern Methodist University TX Stable
Syracuse University NY Stable
Trinity University TX Stable
Tufts University MA Stable
University of Chicago IL Stable
University of Rochester NY Stable
Villanova University PA Stable
American University DC Stable
Babson College MA Stable
Bates College ME Stable
Baylor University TX Positive
Belmont University TN Stable
Brandeis University MA Stable
Dickinson College PA Stable
Franklin & Marshall College PA Negative
George Washington University DC Stable
Lafayette College PA Stable
Loyola University of Chicago IL Stable
Rhodes College TN Stable
Southern New Hampshire University NH Stable
Trinity College CT Stable
Tulane University LA Stable
University of Dayton OH Stable
University of Denver (aka Colorado Seminary) CO Stable
University of Puget Sound WA Stable
University of the South TN Stable
Vassar College NY Stable
Barnard College NY Stable
Buena Vista University IA Stable
Catholic University of America DC Negative
Centre College of Kentucky KY Stable
DePaul University IL Stable
Duquesne University PA Stable
Fairfield University CT Stable
Fordham University NY Stable
Franciscan University of Steubenville OH Stable
Gettysburg College PA Stable
Hampden-Sydney College VA Stable
Hampton University VA Stable
Hofstra University NY Stable
Hope College MI Stable
Kenyon College OH Stable
Loyola University in Maryland MD Stable
Mercy College NY Stable
Mount St. Mary's University CA Stable
Providence College RI Stable
Randolph-Macon College VA Stable
Sacred Heart University CT Stable
Seattle University WA Stable
St. Lawrence University NY Stable
University of Portland OR Stable
Worcester Polytechnic Institute MA Stable
Adelphi University NY Stable
Agnes Scott College GA Stable
Allegheny College PA Stable
Assumption College MA Stable
Baldwin Wallace University OH Stable
Bryant University RI Stable
Butler University IN Stable
Calvin University MI Stable
Doane College NE Stable
Drake University IA Stable
Drexel University PA Stable
Earlham College IN Stable
Flagler College FL Stable
George Fox University OR Stable
Georgetown University DC Stable
High Point University NC Stable
Hobart and William Smith Colleges (Colleges of the Seneca) NY Stable
Holy Family University PA Stable
Illinois Wesleyan University IL Stable
Johnson & Wales University RI Positive
Kettering University MI Stable
Lewis & Clark College OR Stable
Long Island University NY Stable
Lycoming College PA Negative
Manhattan College NY Negative
Mercer University GA Stable
Messiah College PA Stable
Milwaukee School of Engineering WI Stable
New England Institute of Technology RI Stable
Nova Southeastern University FL Stable
Ohio Wesleyan University OH Stable
Quinnipiac University CT Stable
Saint John Fisher College NY Stable
Saint Joseph's University PA Positive
Saint Mary's College IN Stable
St. Ambrose University IA Stable
St. John's University NY Stable
Stetson University FL Negative
Taylor University and Affiliates IN Stable
Transylvania University KY Stable
Universidad Interamericana de Puerto Rico PR Stable
University of Miami FL Stable
University of Scranton PA Stable
University of Tampa FL Stable
Wofford College SC Stable
York College of Pennsylvania PA Stable
Albion College MI Stable
Bradley University IL Stable
Columbia College IL Negative
Concordia University Irvine CA Stable
Emerson College MA Stable
Fisher College MA Stable
Gannon University PA Stable
Goucher College MD Stable
Illinois College IL Stable
Knox College IL Stable
Lesley University MA Stable
Lynchburg College VA Negative
Manchester University IN Negative
Meredith College NC Negative
Moravian College PA Stable
Mount Aloysius College PA Stable
Mount Vernon Nazarene University OH Stable
Nazareth College of Rochester NY Stable
New York Institute of Technology NY Stable
Niagara University NY Stable
Randolph College (fka Randolph-Macon Woman's College) VA Stable
Rensselaer Polytechnic Institute NY Stable
Roanoke College VA Stable
Seattle Pacific University WA Negative
Seton Hall University NJ Stable
St. Bonaventure University NY Stable
Stevens Institute of Technology NJ Positive
The New School, A University NY Stable
Washington & Jefferson College PA Stable
Wayland Baptist University TX Negative
Arcadia University PA Negative
D'Youville College NY Stable
Gwynedd-Mercy College PA Stable
Iona College NY Stable
Juniata College PA Stable
Kings College PA Stable
Lenoir-Rhyne University NC Stable
Lewis University IL Stable
Lindsey Wilson College KY Stable
Loyola University of New Orleans LA Stable
Marian University IN Positive
McDaniel College MD Positive
Molloy College NY Stable
Neumann University PA Stable
Pacific University OR Stable
Queens University of Charlotte NC Stable
Regent University VA Stable
Saint Francis University PA Stable
Simmons University MA Stable
Springfield College MA Negative
St. Edward's University TX Negative
St. John's College MD Positive
University of Dubuque IA Negative
University of Indianapolis IN Stable
University of St. Thomas TX Stable
Ursinus College PA Stable
Washington College MD Negative
Westminster College PA Stable
Widener University PA Stable
Willamette University OR Stable
Augustana University SD Stable
Ave Maria University FL Stable
Bard College NY Positive
Barton College NC Stable
Benedictine University IL Stable
Cabrini University PA Stable
Capital University OH Stable
Carlow University PA Stable
Champlain College VT Stable
Chatham University PA Stable
Dominican University IL Stable
Eastern University PA Stable
Elizabethtown College PA Stable
Florida Institute of Technology FL Stable
Georgian Court University NJ Stable
Guilford College NC Negative
Hendrix College AR Negative
Houghton College NY Stable
Houston Baptist University TX Positive
Howard University DC Positive
Lake Forest College IL Stable
Lawrence Technological University MI Stable
Lipscomb University TN Stable
Lubbock Christian University TX Negative
Merrimack College MA Stable
Oklahoma City University OK Stable
Pace University NY Stable
Sarah Lawrence College NY Stable
Seton Hill University PA Stable
Southwest Baptist University MO Negative
St. Michael's College VT Stable
Stevenson University MD Stable
The Master's University CA Stable
Tiffin University OH Stable
University of Northwestern Ohio OH Stable
University of Evansville IN Stable
University of Findlay OH Stable
University of Hartford CT Negative
University of New Haven CT Stable
Western New England University MA Stable
Westminster College UT Stable
Wilkes University PA Stable
Wingate University NC Stable
Yeshiva University NY Stable
Alvernia University PA Stable
Bethel University MN Stable
Chaminade University of Honolulu HI Stable
Greenville University IL Stable
Marymount University VA Stable
Marywood University PA Stable
Mount St. Mary's University MD Stable
Saint Leo University FL Stable
Anna Maria College MA Stable
Hartwick College NY Stable
Hawaii Pacific University HI Stable
Hiram College OH Stable
La Salle University PA Negative
Lasell College MA Negative
Mercyhurst College PA Stable
Methodist University NC Stable
Pacific Lutheran University WA Negative
Rider University NJ Stable
Saint Elizabeth University NJ Stable
Sweet Briar College VA Positive
University of the Sacred Heart PR Stable
Medaille College NY Negative

Table 7

Glossary of ratios and terms
Metric or ratio Definition
Average ACT scores Average ACT scores for entering first-year students
Average SAT scores Average combined math and reading SAT scores for entering first-year students
First-year acceptance rate (%) Number of students accepted/total number of first-year applications
FTE enrollment Total students enrolled on a full-time-equivalent basis
In-state students (%) Students enrolled who come from within the state/total students enrolled
Retention rate (%) Freshmen students who matriculated for sophomore year/total students who completed their first year
Six-year graduation rate (%) Students who graduate from the university within 6 years/total students in the first-year cohort
Undergraduate students (%) Total number of undergraduate students/total students
Net adjusted operating margin (%) Total adjusted operating income/total adjusted operating expenses
Gifts and pledges revenue (%) Gifts and pledges/total adjusted operating revenues
Grants and contracts revenue (%) Government grants and contracts/total adjusted operating revenues
Investment and endowment revenue (%) Endowment spending income and investment income/total adjusted operating revenues
Student-generated revenue (%) (Gross tuition and fees + auxiliary revenues)/total adjusted operating revenues
Financial aid burden (%) Total financial aid expense/total adjusted operating expenses
Instruction (%) Instructional expense/total adjusted operating expenses
Tuition discount rate (%) Total financial aid expense/gross tuition revenue
University endowment market value ($000s) Market value of endowment as of fiscal year end
Cash and investments to debt (%) Total cash and investments/total debt
Cash and investments to expenses (%) Total cash and investments/total adjusted operating expenses
Average age of plant Accumulated depreciation/depreciation expense
MADS burden (%) Maximum annual debt service/total adjusted operating expense
Endowment per FTE ($) Market value of foundation and endowment/FTE
State appropriations per FTE ($) Total state operating appropriations/FTE
Total debt per FTE ($) Total debt/FTE
Cash and investments Total cash, short term and long term investments
Total adjusted operating expenses Total operating expenses + institutionally funded financial aid + interest expense - non-cash pension and other postemployment benefit expenses
Total adjusted operating revenues Total operating revenues + institutionally funded financial aid + state appropriations + federal and state grants + endowment spending - realized and unrealized gains

This report does not constitute a rating action.

Primary Credit Analyst:Steven Sather, Englewood 303.721.4962;
Secondary Contacts:Laura A Kuffler-Macdonald, New York + 1 (212) 438 2519;
Jessica L Wood, Chicago + 1 (312) 233 7004;
Research Contributor:Akshata Shekhar, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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