The University of Kansas’ credit rating was marked “stable” after five years of being labeled “negative,” according to Moody’s Investors Service.
Moody’s, which rates institutions of higher education among other financial duties, changed the University's outlook to “stable” in May 2019.
Moody's changed its outlook after the University completed a large capital project and funding stabilized from the Kansas legislature. The University’s rapid pay for existing debt also improved its outlook, according to Moody’s.
“With $2.2 billion of total cash and investments, absolute wealth is substantial and provides strong coverage of debt and operations,” according to the report from Moody’s.
For the 2019 fiscal year, the state legislature allocated around $245 million, according to the University’s 2018 annual financial report, which was about 2.8% more funding than in the 2018 fiscal year.
The University’s recently completed capital projects included the Integrated Science Building, Stouffer Place Apartments, Downs Residence Hall, the Burge Union and a new parking lot — all part of the KU Central District, according to the 2018 financial report. In total, the project cost around $314.5 million, according to the financial report.
On Dec. 7, 2015, Moody’s gave the University a negative outlook. The University made “optimistic revenue growth targets, partly from a large increase in international enrollment,” according to Moody's.
Collectively, public higher education has a negative outlook. Many universities experienced a growth in their reserves — money saved from previous years for future investments, according to the Chronicle of Higher Education. But many institutions experienced a decline in their funding.
Chancellor Douglas Girod acknowledged the negative outlook in public higher education during an event to kick off the University’s next strategic plan. Moving forward, the University is creating a plan that anticipates fewer students enrolling in public higher education, given fewer people will be graduating from high school, he said. Enrollment at Kansas universities dropped around 8% in the past five years, Girod said.
“We have a lot of capacity in the state of Kansas," Girod said during his presentation. "What we don’t have is a lot of students."