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Moody's Negative on Higher Ed. Sector

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Moody's Investors Service last week downgraded its outlook for the higher education sector to negative across the board, saying even prestigious, top-tier research universities are now under threat from declining enrollment, government spending cuts, and growing public doubts over the value of a college degree.

Previously, its outlook had been stable for those better-positioned institutions, and negative for the rest.

The report explaining the decision outlines a range of financial challenges now burdening virtually all institutions. They include stagnant family income that limits pricing power, substantial state funding cuts, a demographic dip in the population of new high school graduates, and a federal budget standoff that almost certainly threatens the flow of dollars for research and student-aid programs like Pell Grants.

And despite the obvious pressure, Moody's says too many college leaders still haven't made the bold choices required to survive and thrive.

Vol. 32, Issue 18, Pages 4-5

Published in Print: January 23, 2013, as Moody's Negative on Higher Ed. Sector
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