Weekly Market Update

PRESSURE ON ENROLLMENTS

Thursday, September 14, 2017

According to a survey of admissions directors, 56% of colleges had not met their enrollment targets by May of this year, a higher percentage than the previous two years. Enrollment difficulties extended to well-regarded schools, with private colleges struggling more than large public research universities. Other key findings from the survey include the following: enrollment strategies are largely focused on students who will be able to pay full tuition and international students; some colleges check social media to select students; many colleges are putting more effort into recruiting rural and low-income white students; the public image of higher education is problematic, creating more pressure for liberal arts colleges; concerns over student debt have caused institutions to lose applicants; and institutions, especially private colleges, take a dim view of free tuition.

In Other News

  • A group of lawmakers introduced legislation aiming to reduce bureaucratic and affordability barriers for homeless students.
  • Last Thursday, Gov. Rick Scott asked all Florida state universities and colleges to close to prepare for the Hurricane Irma. With the effects of Hurricane Harvey still reverberating, most institutions responded favorably to the governor's request, though some in the western part of the state adopted a wait and see stance.
  • A Federal Reserve Bank of New York survey showed that consumers' expectations for inflation level fell last month, reaching the lowest value since January 2016, despite their expectation that gasoline prices would rise substantially.
  • The top House tax writer said the working group will release "core elements of tax reform" on September 25, and indicated that passage of the federal budget is precedent to the reforms taking effect.
  • President Trump rescinded the Deferred Action for Childhood Arrivals (DACA), which protected immigrants who entered the country as minors from being deported immediately, under certain conditions. Ending DACA is expected to reduce educational opportunities for many children. In response, educators are seeking ways to protect their students.

Rating Agency Update

  • Moody's assigned Aaa to Texas A&M's Series 2017 Permanent University Fund Bonds. The outlook is stable.
  • Moody's affirmed its A1 rating and assigned A1 to Worcester Polytechnic Institute's Series 2017 Bonds. The outlook was revised to stable from negative.
  • Moody's assigned Aaa to University of North Carolina at Chapel Hill's Taxable General Revenue Refunding Bonds, Series 2017. The outlook is stable.
  • S&P assigned AAA to University of Virginia's 2017C General Revenue Pledge Bonds. The outlook is stable.
  • S&P assigned AAA to University of North Carolina at Chapel Hill's Taxable General Revenue Refunding Bonds, Series 2017 and Series 2012B FRN remarketing. The outlook is stable.
  • S&P assigned AA- to University of California Board of Regents' Series 2017M and Series 2017N Limited Project Revenue Bonds. The outlook is stable.
  • S&P assigned AA- to College of the Mainland's Series 2017 Maintenance Notes. The outlook is stable.