Since 2013, Moody’s Investors Services has been grim about the future of higher education, labeling the industry’s prospects “negative.”
This week, the firm predicted that higher education will stabilize, for the first time post-recession, allowing more predictability in operating budgets. They upgraded the whole sector to “stable.”
Maybe it’s not worth throwing confetti about, but after years of volatility, some modest revenue growth and relatively low inflation will be welcome to college officials.
Tuition revenue growth was averaging 7 percent before the recession, but the ‘new normal’ will be more like 3 percent, the author of the report, Moody’s vice president – senior analyst Eva Bogaty wrote.
A small bump in federal research funding of 1-2 percent is expected, as is about a 3 percent increase in state money for public universities, and patient revenue for university medical centers could grow 5 to 6 percent.
Still, the report warns, one in five colleges will see weak or declining revenue, with small private schools and smaller regional public schools feeling the worst pinch.