Claremont McKenna's Creditworthiness is Downgraded

It's obviously not a crisis, but it's something that the college should keep an eye on. Inside Higher Education has more.

S&P and Moody’s Investors Service, two major rating agencies for higher education, have both been reassessing the financial stability of colleges and universities. In the last three months of 2008, Moody’s downgraded nine colleges, and upgraded only one, Danville Area Community College District in Danville, Ill. The trend grew starker in the first quarter of this year, when Moody’s downgraded 12 colleges and upgraded none. As for S&P, the agency downgraded 10 colleges and universities in the first three quarters of the 2009 fiscal year.

Among the colleges downgraded by Moody’s was Claremont McKenna College in Claremont, Calif., which dropped from Aa1 to Aa2, a category that is still deemed a low credit risk by the rating agency. Given the fact that Claremont didn’t fall into another investment category altogether, officials say they’re not terribly worried about the shift. Richard Rodner, spokesman for the college, said the rating change likely raised the interest rates on newly issued bonds by less than 1 percentage point.

“We do not have plans for further borrowing in the near future,” he said in an e-mail to Inside Higher Ed. “So, I guess I would say that we do not see a significant impact for CMC.”