Weekly Market Update
TRUMP ADMINISTRATION RESCINDS GUIDANCE ON AFFIRMATIVE ACTION
Thursday, July 5, 2018
The Trump administration on Tuesday rescinded guidance issued by the Obama administration on how colleges and universities could legally consider race and ethnicity in admissions decisions. The Justice Department announced it was eliminating 24 federal guidance documents that it deemed "unnecessary, outdated, inconsistent with existing law, or otherwise improper." Seven of the rescinded documents called on schools to consider race when trying to diversify their campuses, and were issued jointly with the Education Department's Office for Civil Rights under the Obama administration. The policy shift comes at a pivotal moment in the long-running affirmative action debate. The Obama-era guidelines stated that these programs "greatly contribute the educational, economic, and civic life of this nation," while the new guidance argues that the previous stance "advocates policy preferences and positions beyond the requirements of the Constitution." The retirement of Supreme Court Justice Anthony Kennedy, who has in recent years backed the consideration of race in admissions, will allow President Trump to name a successor who could tilt the outcome of future cases. The rollback of guidelines comes as Harvard University is being sued over its admissions practices by a group claiming it discriminates against Asian-American applicants.
In Other News
- Grand Canyon University is once again a nonprofit university. Under the terms of a transaction that closed on July 1, 2018, Grand Canyon Education sold Grand Canyon University to a nonprofit entity that will retain the GCU name. The transaction returns GCU to its previous status as a nonprofit university and representatives from both GCU and GCE claim that the change ensures the long-term legacy of both GCU and GCE.
- Pennsylvania State System administrators have proposed that instead of having a single tuition rate across the system, each of the 14 universities would be given broad leeway to set their own prices and distribute financial aid. If approved, those schools would be able to set tuition and adjust financial aid that best fits each institution's student demand.
- Greg Schuler was named chief investment officer at University of Pittsburgh. Mr. Schuler will oversee investment and management of the university's $4 billion consolidated endowment.
- A coalition of six state treasurers wrote a letter to Securities and Exchange Commission Chairman Jay Clayton on Monday urging the agency not to change its policy of not allowing public companies to dictate forced arbitration to shareholders.
- The Higher Learning Commission has approved University of Wisconsin System President Ray Cross' plan to merge the system's two-year and four-year schools. Cross' plan calls for the 13 two-year schools to become branch campuses of seven nearby four-year schools.
Rating Agency Update
- Moody's assigned Aa2 to University of Arkansas's Series 2018A Various Facility Revenue Bonds and Series 2018B Taxable Bonds. The outlook is stable.
- Moody's affirmed University of Redland's A3 rating. The outlook is revised from stable to negative.
- Moody's affirmed Winston-Salem State University's A3 rating. The outlook is stable.
- Moody's assigned Aa2 to California State University's Series 2018 Systemwide Revenue Bonds. The outlook is stable.
- Moody's assigned initial Baa3 to Northwest Nazarene University's Series 2018 Bonds. The outlook is stable.
- Moody's assigned Aa2 to Washington & Lee University's Series 2018A Bonds. The outlook is stable.
- S&P affirmed Morgan State University's A+ rating. The outlook is stable.
- S&P assessed Saint Edward's University's rating as BBB+. The outlook is stable.
- S&P assigned AA to Washington & Lee University's Series 2018A Educational Facilities Revenue and Refunding Bonds. The outlook is stable.
- S&P assigned A- to Kansas City Art Institute's Series 2018 Educational Facilities Revenue Bonds. The outlook is stable.
- S&P affirmed College of William & Mary's AA rating. The outlook is stable.
- S&P assigned A- to Nova Southeastern University's Series 2018 Educational Facilities Revenue and Refunding Bonds. The outlook is stable.