Our perspective on global micro event and strategies.
Remote learning, social distancing, and student safety aren’t the only challenges facing the higher education sector amid the protracted global health crisis. Colleges and universities worldwide are also currently grappling with declining enrollment rates, relatively flat tuition, and steep discounting to entice prospective students. In response, to make up for lost revenue, many institutions are cutting salaries, delaying retirement contributions, and slashing non-essential capital expenditures. Some are even eliminating academic programs and increasing endowment spending.
Despite these headwinds, we continue to like the higher ed municipal bond sector for many of the same reasons laid out in our June blog post and see attractive opportunities in select areas of the market. Of course, deep credit research will be critical to…
COVID-19-related disruptions have impacted operating performance in the higher education sector of the US municipal market. However, we remain constructive on the sector overall, supported by balance-sheet strength across select issuers.
Campus reopenings and student decisions will vary.
Campus reopenings will differ by state and the size of the institution. For example, California State University already decided to close all 23 campuses this fall, while smaller institutions such as Notre Dame and Boston College announced plans to reopen campuses.
Meanwhile, freshmen and returning students may weigh different options, such as taking online classes the first semester or staying closer to home — a benefit for public universities. Transferring to lower-cost or even “reach” schools could also be possible due to enrollment dislocations. Management teams say they are on track to meet…