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Moody's: 2021 Outlook for Community College Sector [in the US] is Negative as Enrollment Drops Weaken Tuition Revenue. The report’s highlights include: 1) Enrollment declines will weaken net tuition revenue. Lower enrollment as a result of the pandemic will weaken net tuition...
![Moody's: 2021 Outlook for Community College Sector [in the US] is Negative as Enrollment Drops Weaken Tuition Revenue. The report’s highlights include: 1) Enrollment declines will weaken net tuition revenue. Lower enrollment as a result of the pandemic will weaken net tuition...](https://pbs.twimg.com/media/Eozc1QXXUAIZAK_.jpg "Moody's: 2021 Outlook for Community College Sector [in the US] is Negative as Enrollment Drops Weaken Tuition Revenue. The report’s highlights include: 1) Enrollment declines will weaken net tuition revenue. Lower enrollment as a result of the pandemic will weaken net tuition...")
revenue, typically the largest revenue source for community colleges, by between 5% and 15% in calendar year 2021. Additionally, given their affordability and accessibility missions, community colleges are unlikely to seek tuition rate increases, which will exacerbate revenue...
difficulties. 2) Weaker revenue at the state level will prompt some reductions in aid. Many states have already proposed or enacted funding reductions for higher education, an area where states tend to make cuts during economic downturns.
3) Property taxes will provide a stabilizing revenue stream, even though the lagging economic impact of the coronavirus on property valuations and the potential for delinquencies mean revenue from this source will likely only be flat in fiscal 2021.
4) Flexible operating models and sound liquidity will help mitigate near-term strains, "which allows them to scale their academic labor force to match projected enrollment and revenues."
5) What could change the outlook. The outlook could move to stable if enrollment rebounds and reductions in state funding are manageable.
Another summary of a long report, which I post to help people better understand how ratings agencies [not me!] view the drivers of change in higher education.
