Moody’s Downgrades Rating For 6 Illinois Universities, Including EIU
Six Illinois universities, including Eastern Illinois University, have seen their credit ratings lowered because of the state's ongoing budget stalemate. Those schools have had to front the money for low-income students' tuition - MAP grants that the state is supposed to cover.
Chancellors say they've put off campus upgrades; presidents say faculty recruitment is suffering - all while they wait for Illinois lawmakers to pass a budget, that provides them with state funding.
And now another hit. Moody's Investors Service on Monday downgraded ratings for EIU, Governors State, Northeastern Illinois, Northern Illinois, Southern Illinois and Western Illinois universities.
Analysts write that Western’s "thin" base of liquid reserves means the budget delay has a sharper negative impact on it than some of its peers." Moody's also says EIU has a "very high vulnerability."
The University of Illinois and Illinois State University avoided any downgrades, but like the others, analysts gave them "negative" outlooks. That's a sign ratings could fall in the future.
The agency says a significant portion of the universities' funding comes from the state, which is about to enter its fifth month without a budget.
Moody's also notes that cuts to higher education spending are likely once Republican Gov. Bruce Rauner and Democrats who control the Legislature agree on a spending plan.
The lower a credit rating, the higher the cost of borrowing money.
Moody's and Fitch Ratings downgraded the state's credit rating last week because of the financial crisis. Illinois already had the lowest rating of any state.