"Federal policy challenges and a dwindling population of traditional-age students will make for a difficult year ahead for higher education, Moody's Ratings predicted in a report issued last week. The credit ratings agency predicted that revenue growth will trail behind previous years while expense growth will put a squeeze on operating margins, though strong investment returns should help buoy institutions' financial position."
"Overall revenue growth is projected to be 3.5 percent, down slightly from 3.8 percent in 2025. But anticipated growth will vary by institution type. Large, comprehensive, private universities are expected to see 4 percent revenue growth while their public peers will see 3.4 percent. Mid-sized private universities are expected to see the lowest revenue growth in the sector, at 2.3 percent."
""Federal funding for research grants and contracts will be stagnant, as a long period of continuous growth in federal research and development funding has leveled off and universities grapple with potential caps to indirect costs and ongoing grant cancellations," Moody's officials wrote. "While deep cuts to research are unlikely, we forecast modest declines in fiscals 2026 and 2027 to overall funding. These reductions will be concentrated in funding from the National Institutes of"
Federal policy shifts and a shrinking population of traditional-age students will heighten financial pressure on colleges and universities in the near term. Overall revenue growth is expected to slow to about 3.5 percent, with variation by institutional type: large private institutions near 4 percent, public peers about 3.4 percent, and mid-sized private universities around 2.3 percent. Expense growth will compress operating margins despite strong investment returns providing some support. Federal research funding is projected to stagnate or modestly decline in fiscal 2026–2027, and competition for students will intensify as enrollment markets contract.
Read at Inside Higher Ed | Higher Education News, Events and Jobs
Unable to calculate read time
Collection
[
|
...
]