Weekly Market Update


Thursday, May 3, 2018

Private colleges have been aggressively discounting tuition in an effort to boost enrollment. Discount rates increased to a record 49.9% for full-time freshman at private colleges this academic year, according to a preliminary report by the National Association of College and University Business Officers (NACUBO). Overall tuition discount rates for undergraduates hit a record 44.8%, up from 43.2% last year. For the colleges and universities studied, this discounting led to a slight decline in average net revenue per freshman in 2017-2018, and many schools implemented retention, recruitment, and financial aid strategies in fiscal year 2017 to increase revenue. With private schools, especially those with enrollment under 4,000, largely reliant on tuition dollars and strongly affected by even small enrollment changes, the NACUBO report warned that continued declines in net tuition revenues may limit the institutions' ability to fulfill their educational and public service missions.

In Other News

  • The study, "Higher Ed, Lower Spending: As States Cut Back, Where Has the Money Gone?" found that while public-school education, prisons, police, and fire protection have seen state funding increases, public higher education has experienced declines.
  • The first quarter estimate from the U.S. Department of Commerce for GDP growth is 2.3%, exceeding the previous estimate of 2.0% from economists polled by Reuters.
  • The University of Rhode Island managed to boost its student completion rates while still recovering from the previous recession's budget slashes. Tactics employed include higher spending on student advising capacity, the use of predictive analytics, degree mapping for each student, and an overhaul of its general-education curriculum.
  • Drexel University alum Raj Gupta has donated $2.5 million as part of a larger $5 million gift that establishes the Raj & Kamla Gupta Governance Institute, the University said Monday. The Gupta Institute will house Drexel's existing Center for Corporate Governance and its new Center for Nonprofit Governance.

Rating Agency Update

  • Moody's affirmed Yeshiva University's B3 rating. The outlook is revised from stable to positive.
  • Moody's assigned A2 to Duquesne University's Series 2018 Revenue Bonds. The outlook is stable.
  • Moody's affirmed University of Massachusetts' Aa2 rating. The outlook is revised from negative to stable.
  • Moody's affirmed Chaminade University of Honolulu's Ba2 rating. The outlook is revised from stable to negative.
  • S&P affirmed New York Law School's BBB- rating. The outlook is stable.
  • S&P affirmed the University of Alabama Birmingham's AA rating. The outlook is stable.
  • S&P assigned A- to Allegheny College's Series 2018A Tax-Exempt Bonds and Series 2018B Taxable Bonds. The outlook is negative.
  • S&P assigned AA- to Ball State University's Series 2018 Student Fee Bonds. The outlook is stable.
  • S&P affirmed Ohio University's A+ rating. The outlook is stable.
  • S&P assigned AA- to New York University's Series 2018A Tax-Exempt Revenue Bonds and Series 2018B Taxable Revenue Bonds.
  • S&P assigned AAA to Columbia University's Series 2018A and 2018B Bonds. The outlook is stable.