S&P Global Ratings dropped outlooks on more than a quarter of the colleges and universities it rates because of the COVID-19 pandemic’s effects on higher education.
The ratings agency cut ratings on 117 colleges — 84 private institutions and 33 public institutions — from stable to negative. It changed outlooks for 10 more — seven private and three public — from positive to stable. And it left unchanged outlooks for 50 institutions that were already negative.
Those actions mean the share of colleges and universities that S&P rates with negative outlooks has more than quadrupled in just a few months. At the end of 2019, just 9.2 percent of its rated higher ed universe had negative outlooks. After the actions announced today, 38 percent does. The agency maintains public ratings on 436 public and private colleges and universities.
A negative outlook for a college or university means S&P sees at least a one-in-three chance operating and economic conditions will significantly affect the institution’s credit characteristics.