Forced to keep discounting their prices as enrollment stagnates, U.S. universities and colleges expect their slowest growth in revenue in 10 years, the bond-rating company Moody’s reports.
The squeeze could threaten further cuts in services even as tuition continues to increase.
A quarter of colleges and universities are projecting declines in revenue, according to a closely watched annual Moody’s survey. Half of public and 40 percent of private institutions say they will take in only 2 percent more than the inflation rate, or worse.
Moody’s analysts say regional public universities and small private colleges, particularly in the Northeast and Midwest where birth rates are flat and enrollment growth has stalled, are at the greatest risk. But the problems are dogging campuses everywhere.
“Smaller entering classes in much of the country over the next few years foreshadows continued revenue pressure,” says Eva Bogaty, a Moody’s vice president and senior analyst.
Nearly 40 percent of public and 45 percent of private institutions expect that their enrollments will decline next fall.
