Rising Costs and Student Demands Put Colleges in Fiscal Bind

A growing disconnect between escalating costs and a focus on student affordability is weakening the economic outlook for nonprofit colleges and universities, Reuters and The Chronicle of Higher Education write, citing a new report from Standard & Poor’s. The ratio of credit downgrades to upgrades increased for the fourth consecutive year in 2014 as colleges struggle to meet student demands for more amenities while holding the line on tuition, the rating agency said.

Despite rising costs, many institutions are discounting student charges to keep enrollment up, creating a buyer’s market. “This competitive landscape is beneficial to students but financially challenging for colleges,” said Jessica Matsumori, an S&P analyst. “Institutions face an expensive contest to attract and retain the best students.”