(Bloomberg) — More colleges and universities in the U.S. are headed for closings or mergers, as enrollment at higher education institutions declines, according to Fitch Ratings Inc.
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A few have already closed or merged with others this year. Alliance University in Manhattan’s Financial District said it would drop its courses starting Aug. 31, while Medellin University in Western New York began closing them in May. On July 1, Bloomfield College in New Jersey merged with Montclair State University, ending a roughly two-year search for a partner to help the school avoid closing due to financial challenges.
Emily Wadwani, the company’s senior director, said in a report Wednesday that declining enrollment, as well as pressures on tuition and student fee growth expectations, are common issues among Fitch’s most recent declines. The ratings firm said half of its below-investment-rated ratings have negative views on higher education institutions, indicating they are at risk of downgrades.
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“The implications of credit institutions’ ability to address structural deficiencies, the level of financial flexibility in this sector’s contract period, or the ability to find effective partners will continue to be informed,” Wadhwani wrote. “Colleges must make proactive decisions about the programs, departments, capital plans and assets they believe best fit their organizational and strategic goals.”
Moody’s Investors Service said in June that closures will gradually increase as colleges and universities struggle with financial difficulties, although such moves are still relatively rare.
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