October 15, 2024
Financial Pressure Grows for Colleges, Fitch Says
Pressure on college finances is intensifying despite modest enrollment growth this fall, slowing inflation and other tailwinds for the sector, according to a recent analysis by Fitch Ratings. In a Friday release, Fitch noted that while most of the colleges it rates have stable financial outlooks, it has increasingly lowered outlooks for colleges in recent quarters — which could portend more credit downgrades ahead. Sectorwide, the ratings agency has a negative outlook for higher education, a now multiyear trend, Fitch senior director Emily Wadhwani noted in a Thursday webinar. “We do expect the sector to yield generally softer operating margins and continue to show some strains on financial flexibility as we head into 2025,” she said.