Weekly Market Update

HOUSE REPUBLICANS MOVE AHEAD WITH OVERHAUL OF HIGHER EDUCATION ACT

Thursday, December 14, 2017

The House Committee on Education and the Workforce approved legislation that would amend federal laws governing colleges and universities, student applications for federal aid, and other higher education policies. The bill, known as Promoting Real Opportunity, Success, and Prosperity through Education Reform ("Prosper"), was introduced by Representative Virginia Foxx, the chairwoman of the committee, and would overhaul the existing Higher Education Act by streamlining the student aid system, eliminating various regulations, and increasing post-secondary programs that offer professional certificates and job training. Regarding student financial aid, the bill would simplify the federal aid application as well as the current federal aid offerings, moving to a "one loan, one grant, one work-study" system. The bill also eliminates the Public Service Loan Forgiveness program, which erases debt after 10 years for borrowers who go into public service careers, like teaching or law enforcement. The proposed legislation would also increase the annual federal loan limit from $5,500 to $7,000 for undergraduates, but would limit graduate student borrowing under the Grad Plus program to $28,500 annually. Democrats, who are also eager to overhaul the outdated Higher Education Act, have registered their displeasure over what they say was a rushed legislative process and argue that the GOP proposal missed the mark.

In Other News

  • The tax bill now appears likely to retain tax-exempt private activity bonds, which are used for multi- and single family housing, airports, water and sewer facilities, as well as nonprofit hospitals and universities. The muni market will still take a hit however, from the loss of advance refundings and the reduction in the corporate tax rate to 21% from 35%.
  • Johns Hopkins University plans to stop investing in thermal coal because of concerns over the environmental and public health effects of climate change. Johns Hopkins' board of trustees voted Friday to direct the university to stop buying stocks and bonds of companies that focus on producing coal for electric power. The university also plans to divest itself of any related securities.
  • The Chronicle of Higher Education published its annual database of executive compensation packages for presidents of public and private institutions.
  • The suspension of State and Local Government Series (SLGS) nonmarketable U.S. Treasury securities took effect on December 8, 2017. Treasury's past practice has been to honor all SLGS subscriptions submitted prior to the time and date of a suspension. Existing SLGS maturities, interest payments, and early redemptions will be processed normally during the suspension. Open-market Treasury securities, which are purchased after soliciting bids from banks and other financial institutions, are still an option.
  • Southern Vermont College announced Monday that it received the Bennington Center for the Arts as a gift. Bruce Laumeister and Elizabeth Small, who together founded the Center in 1994, will donate the property, buildings, and one-third of its art collection to the college, which will name it the Laumeister Art Center at Southern Vermont College, in honor of the donors.

Rating Agency Update

  • Moody's affirmed Pittsburg State University's A1 rating. The outlook is negative.
  • Moody's upgraded MCPHS University's rating from A1 to Aa3. The outlook is stable.
  • Moody's affirmed California Western School of Law's Baa3 rating. The outlook is negative.
  • Moody's assigned A1 to Kennesaw State University's Series 2017 Lease Revenue Refunding Bonds. The outlook is stable.
  • Moody's assigned Aa3 to Virginia Commonwealth University Health System's Series 2017A&B General Revenue Refunding Bonds and General Revenue Bonds. The outlook is stable.
  • Moody's assigned A2 to Babson College's Series 2017 Revenue Bonds. The outlook is stable.
  • Moody's assigned Baa1 to College of Saint Benedict's Series 2017 Revenue Refunding Bonds. The outlook is stable.
  • Moody's assigned Baa3 to Georgian Court University's Series 2017 Bonds. The outlook is stable.
  • Moody's affirmed Nova Southeastern University's Baa1 rating. The outlook is stable.
  • Moody's assigned A2 to University of St. Thomas' Series 2017A Revenue Refunding Bonds. The outlook is stable.
  • Moody's assigned Aa2 to University of Hawaii's Series 2017A-G University Revenue Bonds. The outlook is stable.
  • Moody's and S&P assigned A1 and AA+, respectively, to Dartmouth College's Series 2017 Revenue Bonds. The outlook is stable.
  • Moody's and S&P Assigned A1 and A, respectively, to Worcester Polytechnic Institute's Series 2017B Bonds. The outlook is stable.
  • Moody's and S&P assigned A3 and A, respectively, to Drexel University's Series 2017 Revenue Refunding Bonds. The outlook is stable.
  • Moody's and S&P assigned Aa2 and AA, respectively, to University of Houston System's Series 2017C Consolidated Revenue and Refunding Bonds. The outlook is stable.
  • Moody's and S&P assigned Aaa and AAA, respectively, to Princeton University's Series 2017I Revenue Refunding Bonds. The outlook is stable.
  • S&P affirmed Crowder College's A- rating. The outlook is stable.
  • S&P assigned A- to Lesley University's Series 2017A&B Tax-exempt and Taxable Revenue Bonds.
  • S&P raised Sweet Briar College's rating from B to B+. The outlook is stable.
  • S&P assigned A- to St. John's University's Series 2017A University Revenue Bonds. The outlook is positive.
  • S&P assigned A to Seattle University's Series 2017 Refunding Revenue Bonds. The outlook is stable.
  • S&P affirmed Metropolitan State University Board of Trustee's A rating. The outlook is revised from negative to stable.
  • S&P lowered University of Louisville's rating from AA- to A+. The outlook is stable.
  • S&P assigned A- to Flagler College's Series 2017 Revenue Refunding Bonds. The outlook is stable.
  • S&P assigned A- to Washington & Jefferson College's Series 2017 Revenue Bonds. The outlook is stable.
  • S&P affirmed Midwestern University's A rating. The outlook is stable.
  • S&P assigned A+ to Dickinson College's Series 2017A&B Revenue Bonds. The outlook is stable.
  • S&P affirmed Ramapo College's A rating. The outlook is stable.
  • S&P assigned A to Fordham University's Series 2017 Revenue Bonds. The outlook is negative.