Moody's increasingly downgrading elite colleges

August 30, 2013

Inside Higher Ed reports on the increased number of private colleges that have had their credit ratings downgraded by Moody’s Investor Service over the past year and a half. Although said institutions -- Haverford College, Morehouse College, Oberlin College and Wellesley College -- are still highly sought after by students, they have been “showing signs of fiscal stress” since the recession. “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 Moody’s analyst Edie Behr. Behr warns institutions against the dangers of relying on too few revenue streams; however, these small colleges depend on just tuition, donations and money from endowment growth. “It’s like a car dealership being sales-of-car dependent,” says Oberlin’s VP Finance, Ronald Watts. “I mean, it’s our industry, what do you want us to do?” Inside Higher Ed