Weekly Market Update

COMPETITION IN ONLINE EDUCATION

Thursday, May 4, 2017

Purdue University acquired Kaplan, a for-profit university that focuses on distance learning, signaling Purdue's increasing importance in the online education field. According to a report by Digital Learning Compass, the number of students enrolling in online courses is increasing despite a decline in total college enrollment. Most students take online classes from public institutions, but private nonprofit institutions are catching up. In addition to growing fast, the online education industry is highly concentrated: the top 5% of institutions, by enrollment numbers, account for almost half of all online students. At the same time, online institution enrollment rankings change frequently.

In Other News

  • According to a recent study, some colleges and universities have increased tuition discounts to the point of jeopardizing institutional financial stability.
  • David Deming, a scholar at Harvard University, proposed a federal matching grant to make college education free. While the proposal is unlikely to pass Congress, it is intended to address concerns about colleges not having sufficient resources to maintain education quality while providing greater access.
  • Despite President Trump's plan to cut science and education budgets, Congress increased funding for the National Institutes of Health and the return of summer Pell Grants.
  • Treasury Secretary, Steven Mnuchin, said that it would be reasonable to issue bonds with maturities longer than 30 years. He also suggested that public-private partnerships may help finance the government's infrastructure plans.
  • SIFMA finalized its Municipal Issue Price Model Documents on Tuesday. This version clarified a few concepts, including the definition of a "related party," the duties of dealers and underwriters, and competitive sales' notice of sales options.
  • Journalism schools at Northwestern and Berkeley have dropped their accreditor. The schools felt that outdated accreditation credentials could impede the programs. While some other universities support such moves, the accreditor expressed concern that students would be hurt.

Rating Agency Update

  • Moody's assigned A3 to Adam State University's planned Series 2017A and Series 2017B Institutional Enterprise Revenue Refunding Bonds. The outlook in negative.
  • Moody's assigned A3 to Southeastern Louisiana University's Series 2017 Revenue Bonds. The outlook is negative.
  • Moody's downgraded Wright State University's outstanding General Receipts bonds to Baa2 from A2. The outlook is negative.
  • Moody's assigned Aa2 to New York University's Series 2017A and 2017B Revenue Bonds. Moody's also upgraded New York University's prior revenue bonds to Aa2 from Aa3. The outlook is stable.
  • Moody's assigned Aa3 to College of the Holy Cross's Series 2017A Revenue Bonds. The outlook is stable.
  • S&P affirmed its BBB- rating on Waynesburg University. The outlook was revised to negative from stable.
  • S&P upgraded University of Montevallo's Series 2017 Revenue Bonds to AA from A+. The outlook is stable.
  • S&P affirmed its A- rating on Mayville State University's Series 2010 Housing and Auxiliary Revenue Bonds and Series 2013 Facilities Revenue Bonds. The outlook was revised to negative from stable. S&P also assigned A- to Mayville State University's Series 2017A Student Housing and Auxiliary Facilities Revenue Refunding Bonds.
  • S&P downgraded Bradley University's revenue bonds to A- from A. The outlook is stable.
  • S&P downgraded Ranken Technical College's Series 2011B Educational Facilities Revenue Bonds to A- from A. The outlook is stable.