Moody's Investors Service now has a negative outlook for the entire U.S. higher education sector, the rating agency said on Wednesday, citing "mounting fiscal pressure on all key university revenue sources."
Since 2009, Moody's had had a stable outlook for market-leading, research-driven colleges and universities and a negative outlook for the rest of the higher education sector.
"The U.S. higher education sector has hit a critical juncture in the evolution of its business model," said Eva Bogaty, Moody's assistant vice president, in a statement. "Even market-leading universities with diversified revenue streams are facing diminished prospects for revenue growth."
The agency said one critical factor in the expansion of that negative outlook was that students' price sensitivity is keeping tuition payments low.
(Reporting by Lisa Lambert in Washington, D.C., and Caryn Trokie in New York)