Moody’s Investors Service has a new report on the state of American public higher-education, and it isn’t pretty. Among the negative trends it discusses:
- The decline in enrollment. Moody’s reports that more than half of America’s public universities saw no growth or declines in fall 2013.
- The growing importance of tuition. Tuition now constitutes almost half of public university’s operating revenues, even as tuition revenues dropped 4 percent for flagship and system schools and 25 percent for regional public universities.
- Increased cost pressures. The growth of expenses at public universities outpaced the growth of revenue for the second year in a row.
To be fair, the picture isn’t totally bad. Moody’s also reports that over 87 percent of public universities have increased their total financial resources since 2008, which puts them in a better position to manage declining enrollments and revenues.
This bit of positive news does not mitigate the overall story, however. Moody’s concluded the report by affirming its “negative sector outlook” for higher-education generally and public higher-education in particular. One suspects that investors will take heed. Will college administrators do the same?