Declining enrollment credit negative due to continued pressure on net tuition revenue

Source: Edison Castaneda, Susan I Fitzgerald, Dennis M. Gephardt, Moody’s, Sector Comment, May 29, 2018
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On May 21, the National Student Clearinghouse Research Center (NSCRC) released data showing that enrollment at US colleges and universities declined by 1.3% year-over-year in spring 2018 with some variation by type of institution (see Exhibit 1). This enrollment decline is credit negative for the sector given US colleges and universities’ high reliance on tuition and other student-generated revenue. Tuition and other student-generated income represents roughly 74% and 61% of revenue for four-year public and four-year private universities, respectively. Demographic trends and tuition pricing constraints will continue to suppress tuition revenue growth in fiscal 2018 with Moody’s projecting median net tuition revenue growth to increase just 2.4% for public universities and 2.0% for privates. Additionally, we project over 20% of public universities and 23% of privates to have declining net tuition revenue in fiscal 2018.

Current Term Enrollment Estimates – Spring 2018
Source: National Student Clearinghouse Research Center, Spring 2018

From the overview:
In spring 2018, overall postsecondary enrollments decreased1.3 percent from the previous spring. Figure1 shows the 12-month percentage change (fall-to-fall and spring-to-spring) for each term over the last three years. Enrollments decreased among four-year for-profit institutions (-6.8 percent), two-year public institutions (-2.0 percent), four-year private nonprofit institutions (-0.4 percent), and four-year public institutions (-0.2 percent). Taken as a whole, public sector enrollments (two year and four-year combined) declined by 0.9 percent this spring. Current Term Enrollment Estimates, published every December and May by the National Student Clearinghouse Research Center, include national enrollment estimates by institutional sector, state, enrollment intensity, age group, and gender. Enrollment estimates are adjusted for Clearinghouse data coverage rates by institutional sector, state, and year. As of spring 2018, postsecondary institutions actively submitting enrollment data to the Clearinghouse account for 97 percent of enrollments at U.S. Title IV, degree-granting institutions. Most institutions submit enrollment data to the Clearinghouse several times per term, resulting in highly current data. Moreover, since the Clearinghouse collects data at the student level, it is possible to report an unduplicated headcount, which avoids double-counting students who are simultaneously enrolled at multiple institutions.