Moody’s Upgrades Higher Ed’s Outlook From ‘Negative’ to ‘Stable’

Moody’s Investors Service has upgraded its outlook for the higher-education sector from “negative” to “stable,” citing expected increases in state funding and federal research funding. Higher education had been assigned a “negative” outlook since January 2013.

“Our outlook revision to stable reflects our view that aggregate operating revenue growth for four-year colleges and universities will stabilize at a post-recession level of just above 3 percent over the next 12-18 months, providing some predictability in operating budgets for the first time since FY 2009,” said Eva Bogaty, author of the service’s new report, in a news release.

In adjusting its outlook, the service cited a report it released two weeks ago showing improvements in the financial health of both public and private colleges.

Moody’s cautioned, however, that regional public universities and small private colleges will be the most likely to feel financial “stress.”