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U.S. Higher Education Rating Actions, Third-Quarter 2024

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U.S. Higher Education Rating Actions, Third-Quarter 2024

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:

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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

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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