Weekly Market Update

WATCH OUT FOR 2018

Thursday, January 4, 2018

Following passage of the tax bill, higher education may soon face additional pressures from Washington. For its part, the House has proposed an overhaul to the Higher Education Act of 1965, limiting loans to students and parents, and ending the loan forgiveness program for public sector workers. The Senate is planning on releasing its version for debate early this year.

The U.S. Department of Education has begun rewriting the gainful employment and borrower defense rules. The rules currently withhold student aid from for-profit colleges when their graduates' debt-to-earnings ratios are too high and forgives federal loans for students whose institutions engaged in illegal borrowing practices. The Department is currently being sued by states for trying to rewrite both rules.

The Pell Grant award size was slated to increase this year, but lawmakers drained funds from the program's reserves, and some fear that this practice will continue.

In addition to such changes in federal programs, states hard hit by tax changes may reduce higher education funding in response to falling revenues.

In Other News

Rating Agency Update

  • Moody's assigned Aa2 to University of Arizona's System Revenue Bonds Series 2018A and 2018B, and Aa3 to University of Arizona's Refunding Certificates of Participation. The outlook is stable.
  • Moody's affirmed Texas Christian University's Aa2 rating. The outlook is stable.
  • S&P assigned AA- to University of Arizona's System Revenue Bonds Series 2018A and 2018B, and A+ to University of Arizona's Refunding Certificates of Participation. The outlook is stable.