Weekly Market Update
CONSOLIDATIONS ON THE WAY
Thursday, October 19, 2017
The University of Wisconsin System will likely undergo large-scale restructuring by merging its two-year and four-year institutions, turning the two-year schools into satellite campuses. The plan is generating controversy, and many worry that the decision is hasty. UW System's president, Ray Cross, explained that the restructuring is necessary to reduce budget pressure and help students. Consolidation is not unique to the University of Wisconsin System. Minnesota merged its community colleges and technical schools, and Georgia has pursued similar consolidations. Mergers and consolidations in higher education may become more common as state funding decreases.
In Other News
- University of North Carolina received almost no penalty from the NCAA for faked classes scandals. The university successfully argued that the scandals fell outside of the NCAA's jurisdiction and should instead come under the purview of its accreditor.
- Arkansas' legislative committee and the Department of Higher Education have proposed policies to assign funds to the state's public universities and colleges on the basis of institutions' improvements, student progress, and post-completion success.
- Seventeen states and the District of Columbia are suing Secretary of Education, Betsy DeVos, for delaying the Gainful Employment Rule. The States argue that the rule is necessary to control the quality of many for-profit programs and to protect students.
- The American Council started Higher Education Week in support of DACA and the Dream Act. College leaders in the D.C. area attended the event.
- More than fifty Connecticut municipalities and school districts are on the verge of rating downgrades due to state budget cuts. With debt representing 9.2% of its gross state product, Connecticut's financial condition is among the most dire of U.S. states'.
Rating Agency Update
- Moody's assigned A2 to Chapman University's Series 2017 Revenue Bonds. The outlook is stable.
- Moody's upgraded Belmont University's rating to A3 from Baa1. The outlook is stable.
- Moody's downgraded Shepherd University's rating to Baa1 from A3. The outlook is stable.
- Moody's affirmed its Aaa rating on Amherst College. The outlook was revised to stable from negative.
- S&P affirmed its BBB rating on Lubbock Christian University's Series 2017 and 2007 Bonds. The outlook was revised to stable from negative.
- S&P assigned AA- to the State University of Iowa's Series S.U.O. 2017 Athletic Facilities Revenue Bonds. The outlook is stable.
- S&P assigned AAA to University of Texas System Board of Regents' Series 2017A Permanent University Fund Bonds. The outlook is stable.