Falling enrollment among graduate-school programs in the United States could hurt colleges’ credit because those declines are likely to stifle tuition-revenue growth, Moody’s Investors Service said on Friday. The declines, as described in a recent Council of Graduate Schools report, are exacerbated by “the persistent declines in M.B.A. and law-degree enrollments, both of which have long provided ample cash for universities,” the company said.
“Many public and private universities with both undergraduate and graduate programs have been relying on graduate-student enrollment to help build net tuition revenue as various pressures encumber undergraduate net tuition-revenue growth,” Moody’s added. “For weaker institutions with low price flexibility, even small declines in graduate enrollment can impede growth in net tuition per student.”
The company’s warning echoes some of the same concerns it outlined in an earlier report on colleges’ financial challenges. That report pointed out that the sluggish economic recovery has made it particularly difficult for colleges that are not market leaders to raise revenue.Return to Top