Credit Rating Agencies Issue Unfavorable Outlook for Higher Education in 2026
“Our sector view is negative, as we expect colleges and universities will struggle to navigate through mounting operating pressures and uncertainty that will require budgetary and programmatic adjustments”
This is not necessarily bad news. Things cannot keep going on the way they have been for years.
Inside Higher Ed reports:
Further Negative Projections for Higher Ed in 2026
Three credit rating agencies have issued unfavorable outlooks for higher education in 2026.
Fitch Ratings issued the latest outlook on Thursday, declaring that it anticipates a “deteriorating credit environment for U.S. Public Finance Higher Education in 2026 relative to 2025.” That outlook is based on various pressures, including concerns about declining enrollment, new limits on federal loan programs and obstacles for international students seeking to study in the U.S.
The organization noted state funding is “vulnerable” due to an “uncertain policy trajectory” that will “generally shift more costs previously borne by the federal government on to the states.”
The rating agency also noted public concerns about “the value proposition of a higher education degree” amid declining job-placement rates and rising concerns about affordability. Fitch anticipates limited revenue growth for colleges as they grapple with those challenges and projected consolidation across the sector, from mergers and closures to restructuring and more.
S&P Global Ratings also issued a negative sector outlook on Tuesday. That analysis cited some of the same concerns raised in the Fitch report. S&P Global warned of “intense competition for students” and rising operating costs for the sector in the year ahead.
“Our sector view is negative, as we expect colleges and universities will struggle to navigate through mounting operating pressures and uncertainty that will require budgetary and programmatic adjustments,” officials at S&P Global Ratings noted on their website.
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Comments
Not surprised. As I have pointed out in other comments, higher education has become higher indoctrination. The degrees handed out by these indoctrination mills, in particular, degrees for majors ending in the word ‘studies,’ are worthless.
I cant wait until certain prgressive banks become the targets of “Orange Man”-grade student ire. They so deserve each other.
At graduation time several years ago in our church, the high school graduates were listed with their post HS plans. Almost all were going to some kind of college – except for one who was going to a state sponsored trade school as a welder. I heard snickering behind me. I turned around and said, “He will be pulling in six figures when the college kids are buried under a lot of debt.” The snickering stopped.
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How appropos! This cut/pasted from the Kim Komando daily newsletter, The Current, for today, 12/29/25:
The new Ivy League: In Massachusetts, vocational high schools are so popular they have massive waitlists (paywall link). Why? Students are seeing AI eat up white-collar entry jobs and are going for AI-proof careers. You can’t automate a burst pipe [repair] or a wiring overhaul. These kids are graduating debt-free into high-paying, essential roles. Smart move.
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