Moody’s: 8 La. colleges could see credit downgrade

UL Lafayette is not among the universities listed by the credit rating agency.

Citing dwindling state support and continuing budget cuts, Moody’s Investor Services has put eight Louisiana public universities on review for downgrade, the credit rating agency announced Tuesday.

Colleges under review include the state’s flagship four-year university, LSU, along with University of New Orleans Research and Technology, University of Louisiana at Monroe, LSU Health Sciences Center in New Orleans, Louisiana Tech University, Southeastern Louisiana University, McNeese State University and Southern University System.

According to Moody’s:

While the credit impact will be distinct for each university, public universities in Louisiana operate in a very challenging environment. Louisiana’s four-year universities have endured a severe 47% decline in operating appropriations between 2010 and 2014 compared to a median of 9% for our rated US public universities. To mitigate those cuts, universities without a solid brand in the region may have exhausted pricing power by increasing tuition by an average of 52% since FY 2010 compared to the US average of 13%.

Shortly after news broke of the possible credit downgrades, Gov. John Bel Edwards released the following statement:

Over the last eight years, Louisiana’s higher education institutions have faced the largest disinvestment in the country. Now, faced with the largest budget deficit in our state’s history, further cuts will be necessary if the legislature will not work with me to bring in additional revenue. We cannot continue to chip away at funding for higher education and expect them to have the ability to invest in our children’s education. This announcement should serve as a wakeup call for anyone who thinks we can simply cut our way out of this crisis, and I am hopeful this will bring folks to the table to work with me to avoid making these cuts that will have a negative long-term impact on higher education in this state.

Read more about Moody’s’ decision by clicking here.