|[October 15, 2013]
Fitch: U.S. Private College Tuition Rising with Student Aid
NEW YORK --(Business Wire)--
An informal survey of Fitch Ratings' private college and university
portfolio was undertaken in mid August in order to get an early
indication on fall 2013 enrollment and fiscal 2014 operations. Overall,
the responses paint a largely stable picture. However, these individual
metrics in isolation may not depict the whole credit picture but can
provide an early indicator of credit stress.
The survey questions revolved around enrollment levels, tuition
deposits, the estimated number of accepted students who have submitted
deposits but later decide not to enroll (melt), the rate of tuition
increases, and the level of institutionally funded student aid.
Of the responses received, 67% of institutions expect enrollment to meet
or exceed budget. Of this group, 50% anticipate exceeding the budgeted
level by more than 5%.
The survey asked about tuition deposits to gain an understanding of
point-in-time deposits versus the same time last year. By a margin of
67% respondents reported that deposits were on track (or above) last
year. Most said deposits were up between 1% and 5%. While the level of
deposits received is a fairly good indicator, the actual enrollment may
be affected by melt. Survey respondents reported no change in melt over
the prior year by a margin of 80%.
Tuition increases continued across the board. However, the rate of
increase appears to be slowing. The majority (60%) of responding
institutions cited increases of less than 5%.
The final question attempted to gain clarity on institutionally funded
student support requirements. Approximately 57% of responding
institutions answered that student aid increased by at least 5% over the
prior year. Most of these responses were cited by institutions in the
Fitch continues to monitor its portfolio of colleges and universities,
with a keen review of enrollment, given that tuition and fee revenue is
the largest revenue component for many private institutions.
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit
market commentary page. The original article, which may include
hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com.
All opinions expressed are those of Fitch Ratings.
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