Inflation and labor shortages set to squeeze college budgets, Moody’s says — from by Rick Seltzer

Dive Brief:

  • Colleges face their highest expense growth in over a decade as rising costs combine with wage inflation, labor shortages and a push to hire, according to two new reports issued this week by Moody’s Investors Service.
  • At the same time, volatility has returned to the investment market, and recent public funding increases are waning, Moody’s said. Colleges also face mounting enrollment uncertainty that raises risks for tuition-dependent institutions that lack a national brand and deep pockets.
  • Most of the U.S. higher education sector will remain financially stable in the near term thanks to strong endowment values and liquidity levels that grew recently, the reports said. But Moody’s analysts expect the converging pressures to squeeze many colleges’ budgets in fiscal 2023 and beyond.