Three Kansas universities – including Wichita State – have followed the state onto Moody’s negative outlook list because of state funding pressures.
Moody’s Investors Service did not change its ratings on the schools’ debt issues, but its negative outlook suggests a future change could lower the universities’ credit ratings.
Lower ratings tend to increase the interest rates the schools would pay on bonds they issue to raise money.
Moody’s added WSU, Kansas State University and Pittsburg State University to the negative outlook. The rating agency previously had a stable outlook on the schools’ ratings.
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A statement from Moody’s cited five years of “mostly stagnant” appropriations for higher education from the state and increased pressure for cuts in the next two fiscal years. The state schools also feel financial pressure from a declining number of in-state high school graduates and “aggressive regional competition” for enrollment, Moody’s said.
“The proposed funding reductions by themselves are manageable with continued careful expense containment,” Moody’s said.
The University of Kansas already had been moved to a negative outlook at Moody’s. The credit rating for the state of Kansas also is on negative outlook lists at Moody’s and Standard & Poor’s Rating Services.
Ratings on debt at Washburn University, Fort Hays State University and Emporia State University retained their stable outlooks with Moody’s.