Moody’s: $14B stimulus funding unlikely to cover colleges’ coronavirus expenses – Education Dive
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Dive Brief:
- The $2.2 trillion economic stimulus package enacted last week could help colleges weather the financial fallout from the coronavirus pandemic, but only somewhat, according to analysts from Moody’s Investors Service.
- The roughly $14 billion earmarked for higher education institutions could help the sector retain financially at-risk students and blunt the “immediate budgetary impact” from the crisis, they wrote to investors this week.
- However, colleges will likely face a cascade of financial challenges in the 2021 fiscal year, including potential tuition revenue losses, decreased state support, and lower income from their endowments and gifts.
Dive Insight:
Although the stimulus package is “mildly credit positive” for the higher ed sector, the analysts note the amount it allocates directly to colleges for their own use is equal to just 1% of total university expenditures. The revenue losses and added expenses colleges will face due to the pandemic will “likely be in excess of that amount,” they write.
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