Category Archives: Higher Education

Opioid settlement to benefit Oklahoma State University, local governments

Source: Adebola Kushimo, Susan I Fitzgerald, Leonard Jones, Moody’s, Sector Comment, April 5, 2019
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The agreement will bolster research funding in a growing area and position the university to enhance its brand and boost philanthropic support. In addition, it will benefit Oklahoma cities and counties, which will split $12.5 million as they grapple with a growing social risk.

Governors’ Top Education Priorities in 2019 State of the State Addresses

Source: Heidi Macdonald, Sarah Pompelia, Policy Report, March 2019

From the abstract:
A signature product, this special report is the result of tracking, analyzing and identifying trends in education policy proposals featured in governors’ State of the State addresses. Check out the six education priorities – school finance, workforce development, teaching quality, early learning, postsecondary financial aid and school safety – identified by governors across the states in 2019, as well as state highlights for each priority area.

Click here to access a more in-depth resource — searchable by year, state or issue — of State of the State addresses, starting at 2005.

Projections of Education Statistics to 2027

Source: William J. Hussar, Tabitha M. Bailey,National Center for Education Statistics (NCES), NCES 2019001, February 2019

From the abstract:
Projections of Education Statistics to 2027 is the 46th in a series of publications initiated in 1964. This publication provides national-level data on enrollment, teachers, high school graduates, and expenditures at the elementary and secondary level, and enrollment and degrees at the postsecondary level for the past 15 years and projections to the year 2027. For the 50 states and the District of Columbia, the tables, figures, and text contain data on projections of public elementary and secondary enrollment and public high school graduates to the year 2027. The methodology section describes models and assumptions used to develop national- and state-level projections.

Related:
Weak enrollment projections highlightrising credit risk for some US colleges
Source: Cassandra Golden, Susan I Fitzgerald, Dennis M. Gephardt, Moody’s, Sector Comment, March 6, 2019
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Alexander’s Loan-Repayment Overhaul

Source: Andrew Kreighbaum, Inside Higher Ed, February 19, 2019

Proposal to automatically deduct loan payments as a share of borrowers’ paychecks promises big improvements but raises questions over some new complications, too.

Student advocates have for years complained about the complex set of options borrowers must navigate to repay their student loans. Student loan borrowers are faced with a dizzying nine repayment plans based on their income, in addition to a standard 10-year loan-repayment plan.

There’s a growing consensus that Congress should reduce those options to one income-based option on top of the standard plan.

Senator Lamar Alexander, the chairman of the Senate education committee, would go one step further, calling for loan payments to be automatically deducted from borrowers’ paychecks. ….

…. While the proposal to reduce the myriad repayment options for borrowers already has broad support among higher ed interest groups, getting buy-in for making student loan payments work more like payroll taxes is more uncertain.

Jessica Thompson, director of policy and planning at the Institute for College Access and Success, said streamlining the repayment plans available to borrowers is “an overdue change.” But she said paycheck withholding for loan payments is “in reality a lot more complicated than it sounds.” ….

Emerging Iterations on State Free College Policy in the 2019 Legislative Sessions

Source: Sarah Pingel, Education Commission of the States, January 31, 2019

State legislatures are officially in full swing, with 44 states plus the District of Columbia in session. At Education Commission of the States, we’re cleaning our glasses and diving into the thousands of pieces of education-related legislation spilling into our inboxes. Not surprisingly, free college maintains its position on state legislators’ minds. We are already tracking 45 pieces of legislation in 19 states plus the District of Columbia…..

Higher education – US: Stronger state financial support benefits public universities

Source: Dan Fiori, Mary Kay Cooney, Susan I Fitzgerald, Moody’s, Sector Comment, February 7, 2019
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State funding for public colleges and universities is up in 43 states for fiscal year 2019 compared to increases in 32 states the previous year, according to the annual Grapevine report from Illinois State University’s Center for the Study of Education Policy. Additionally, state financial support in all 50 states increased by a median of 2.8% in fiscal 2019, more than double the 1.1% in the year before and the highest level since fiscal 2016. The increases are credit positive for the higher education sector, which is battling slower tuition revenue growth and rising expenses — both contributing factors to our negative outlook for the sector.

Related:
States Increase Higher Education Funding By 3.7%
Source: Michael T. Nietzel, Forbes, February 5, 2019

The 50 states appropriated a total of $91.5 billion to support their public universities and financial aid programs in Fiscal Year 2018-19. That’s a 3.7% increase over 2017-18 and an 18.2% increase over Fiscal Year 2013-14, according to Grapevine, the annual report of state higher education spending published by Illinois State University’s Center for the Study of Education Policy in cooperation with the State Higher Education Executive Officers…..

How Colleges Spend Money

Source: American Council of Trustees and Alumni, 2019

Two out of three college students now graduate with an average of over $28,000 in student debt, and the price of tuition continues to rise at an unsustainable rate, faster even than health care. So how do colleges spend that money?

Built specifically for college trustees, policymakers, and other higher education decision-makers, this site is designed to equip the people who oversee colleges and universities with the tools to perform their own analysis of higher education spending trends, and create benchmarks in comparison with other institutions.

Local government and higher education – US: Overview of state aid intercept programs

Source: Susanne Siebel, Dan Seymour, Orlie Prince, Leonard Jones, Alexandra S. Parker, Moody’s, Sector Profile, February 1, 2019
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State aid intercept programs require a state to divert funding, originally intended for operations, to bondholders for debt service when a local government or higher education institution is unable to make the payment. With that bondholder protection, programs help entities access the capital markets. While all programs share the same goal, they vary widely in structure, timing and state commitment….

Not-for-profit healthcare and higher education – US – New accounting standard for operating leases is credit neutral

Source: Rita Sverdlik, Lisa Martin, Lisa Goldstein, Diane F. Viacava, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, January 23, 2019
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New guidance from the Financial Accounting Standards Board (FASB) related to operating leases took effect January 1. Under the new standard, issuers will include the net present value (NPV) of operating leases on the balance sheet. This change does not affect issuers’ credit quality because our assessments already consider operating leases in a manner similar to the new FASB standard. However, in a few limited circumstances, the accounting change will affect issuers’ compliance with financial covenants in bond and bank agreements and temporarily elevate credit risk.

The 401(k) Student Loan Repayment Benefit Program

Source: John G. Kilgour, Compensation & Benefits Review, OnlineFirst, Published January 7, 2019
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From the abstract:
In recent years, student loan repayment programs have emerged as the hot new employee benefit. However, their growth has been restricted by their lack of favored tax status. On August 17, 2018, the Internal Revenue Service issued a private letter ruling approving a proposal to create such a program within a 401(k) plan. In a deft piece of reasoning, the private letter ruling provides relief from the so-called “contingent benefit prohibition.” This article examines student loan borrowing, the private letter ruling and its likely consequences and limitations.