Less than a week after dropping Illinois’ credit rating, Moody’s is handing out downgrades at several public universities.
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This is a problem for these universities because a significant portion of their funding comes from the state. That will make it more hard, and more costly, for those universities to borrow money to make up for the gap.
Moody’s Investors Service says SIU’s rating fell from A3 to Baa1 – with a negative outlook.
The credit-rating company lowered Western Illinois, Eastern Illinois and Governors State by two steps to Baa3, one level above speculative grade, while Northeastern Illinois was dropped one rank to Baa2.
Moody’s also notes that cuts to higher education spending are likely once Republican Gov. Bruce Rauner and Democrats who control the Legislature agree on a spending plan. Illinois, which has been operating without a budget for nearly five months, has the lowest credit rating of all the states in the nation.
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Chancellors say they’ve put off campus upgrades; presidents say faculty recruitment’s suffering, all while they wait for Illinois lawmakers to pass a budget, that provides them with state funding.
