Graduates put their designating sashes over each other during Howard University's commencement ceremonies on May, 10, 2014 in Washington, D.C. (Bill O'Leary/Washington Post)

Moody’s Investors Service cut Howard University’s credit rating Friday for the third time in three years, reflecting continuing financial struggles at one of the nation’s premier historically black institutions.

The agency’s rating on $290 million of revenue bonds stands at Ba2, down from Baa3. The new designation indicates that Moody’s considers the university’s debt below investment grade and a “substantial credit risk.”

As recently as September 2013, Moody’s rated Howard’s debt at A3 — a low risk.

In the Moody’s system, there are 21 rating levels, from Aaa at the top to C at the bottom.

Howard, with 10,265 full- and part-time students as of last fall, is heading toward its 150th anniversary in 2017. It is one of the nation’s leading producers of doctoral degrees for African Americans and occupies a central role in the sector of historically black colleges and universities.

Privately operated, the university in Northwest Washington receives a special annual appropriation from Congress of more than $200 million.

Howard President Wayne A.I. Frederick said he was “disappointed” with the rating but did not anticipate “any adverse effect” on the university’s ability to fulfill its mission.

“I am very optimistic about the future of Howard University and encouraged by the steps we’re taking to stabilize the university and Howard University Hospital,” Frederick said. “We have launched a thorough review of university and hospital operations to identify needs and assess opportunities to improve efficiencies, recruit talent, reduce costs and enhance our overall service delivery system.”

Frederick has led Howard since fall 2013, first as interim president and since July 2014 as president. He had been the university’s provost.

In April, Howard disclosed that it was cutting more than 80 positions from its staff in an effort to save money. Audit records show the university’s operating expenses in the fiscal year that ended in June 2014 — $848.7 million — exceeded operating revenue by more than $44 million.

Moody’s said its latest downgrade reflects “the cumulative effect of ongoing losses at both Howard University Hospital and Howard University combined with expected continued pressure on revenue and liquidity management.” The rating agency noted that the university is relying in part on a bank line of credit for cash flow. It also said that the university might be able to generate money from its real estate holdings in the city.

Financial troubles at the university’s hospital have been a key issue. Howard last year entered into an agreement with Paladin Healthcare Capital to improve the hospital’s fortunes.

In addition, Moody’s said tuition revenue has been lower than expected this year because the university awarded more financial aid than it had budgeted. “We expect financial performance will be weak at the university for the next several years,” Moody’s said.