Moody’s Investors Service expects the coronavirus outbreak to have a negative effect on higher education worldwide for the next year, it said in a report out today.
Universities will face lower student demand and lost income, according to the bond ratings agency. Public institutions in the United States are at higher risk than others around the world in part because of the potential for government funding cuts. Lower investment income could also affect U.S. universities disproportionately because investment income is a higher percentage of income for U.S. universities than it is for others around the globe.
"We expect rated universities in all of our current jurisdictions -- U.S., Canada, U.K., Australia, Singapore and Mexico -- to enroll fewer students for the next academic year than planned, due to the outbreak," said Jeanne Harrison, vice president and senior analyst at Moody’s, in a statement. "In addition, if campuses remain closed for part of the year, income from residence halls, catering, conferences and sporting events will be lower than budgeted. Endowment and gift income may also decline."
Ramifications for college and university credit quality depends on how long the outbreak lasts, Moody’s said. If campuses can reopen for the upcoming academic year, damage to demand and institutional budgets will be manageable.
Also important to watch are international student flows, which will depend largely on conditions within individual countries. Most universities Moody’s rates rely heavily on Chinese students, who are 23 percent of international students globally.
from Inside Higher Ed | News https://ift.tt/3bUZuws https://ift.tt/eA8V8J
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