Topic: Low Enrollment Causes Credit Rating for MU to Drop

[Flat Tire 2]

Interesting effect from the lower enrollment numbers at MU. Lower enrollment will increase the cost of borrowing at MU.

Marshall Drops in Moody?s Ranking

Matthew Schaffer, News Editor
January 12, 2023

Declining enrollment, excess expenses and low tuition rates contributed to Marshall?s drop from an A1 to A2 ranking in a new report by Moody?s Investors Service said University President Brad Smith in a communications announcement on Tuesday, Jan. 10. 

Moody?s ranking represents the creditworthiness of businesses to potential creditors. Due to a continuous decline in enrollment over the past 12 years, the university has seen its trustworthiness lowered by the investment service.

While many colleges and universities have been affected by declining enrollment, especially since COVID-19, Moody?s report concluded that Marshall must both stabilize and increase enrollment as well as brand recognition, operate on a more efficient budget, and possibly raise tuition to retain its current ranking.

?This is not merely a turnaround. We must undergo a transformation,? Smith said in the announcement. ?We are in the process of finalizing this draft strategic plan and, in the next month or so, will be circulating the document to the broader campus community for understanding, questions and final input.?

Smith did ensure that the university?s commitment to affordability and the ?Marshall for All? debt-free initiative will continue to be a priority.
https://marshallparthenon.com/30859/news/marshall-drops-in-moodys-ranking/

[Flat Tire 2]

I believe MU has the power to issue bonds for new construction? A solid bond rating makes debt issued by Marshall more attractive to investors.

[herdorbust2]

I think it will only get worse for universities. Way to many kids go and pay an enormous amount of money for college and still don't get a great job. I can see more trade school and on the job learning again in the future. There is a shortage of things like plumbers, electricians, flooring installers, carpentry etc,,, and it's getting worse. Very few want to do physical labor anymore. If a young person wanted to get into those types of jobs today they could make a fortune. I used to lay all types of flooring and there were installers everywhere. Today it's hard to find one much less a good one.

[Garbanjo]

We are so fortunate to have Smith steering the ship through choppy waters.

I'm convinced if Smith stays 10 years as President he will transform Marshall and Huntington.

Go Herd!

[Flat Tire 2]

I am interested to see Smith's plan, "Marshall for All" debt free initiative. I wonder if it will happen?

[whf]

I am interested to see Smith's plan, "Marshall for All" debt free initiative. I wonder if it will happen?

First things first, this isn't good news for MU and can definitely be "agenda changing", in terms of prioritizing and acting.  It's hard to remember the objective is to drain the swam when you're up to your axx in alligators.  This is an alligator because the corrections are easily biting.

[Scottyo614]

I think the college gig is up. I remember at 19 thinking my friends were crazy going to Cincinnati for a 5 year engineering program. Marshall had a program that was projecting to be 5 years which is why I transferred out when changing majors.  My thought was how can a four year degree require what will amount to six years total.

Then I look up a few years ago and it felt like everyone was in five year programs. Colleges found too many ways to bloat programs and people were being heavily influenced to go. With Covid it felt like tides began to change. Get rid of the "bloated" elective classes. Create programs that accelerate graduation. Invest heavily online. (Thinks it's cheaper to go online, have a professor teach 2-3 classes on the same recording than them sit in a room all day teaching the same 3 classes spread 8 hours)

Basically remove the fake infinite money streams to bring affordable, accelerated streams which hopefully encourage people to have money to give back. Instead of wiping them clean at 22 to which they never give back. I trust Brad Smith as a business person to tackle the challenges.

[GreenDaddy]

Can anyone explain to me what the disadvantages/advantages of Marshall going big on an online program would be? Does having a large online presence hurt the reputation of the schools academics vs the traditional bricks and mortar school?

The only way I see Marshall growing enrollment is via online, but it seems like that if it could have been done that it would have been done by now. Maybe something like that is part of Brad Smiths vision.

[Flat Tire 2]

When I lived in coastal North Carolina I had a neighbor who taught online classes for a UNC  System school. She told me that the vast majority of her online students were older or nontraditional students; maybe it is a graduate course, I don't remember. There is a market for online students while there is also a market for traditional students who want the college experience. Marshall seems to be offering a lot of graduate courses online.

The problem I see with online students is the lack of economic impact they have on the campus town. They don't use dorms or rent apartment, don't shop or eat at local businesses. They don't attend campus forums or sporting events. I don't how you could charge an online student an athletic fee for college sports or the Artist Series when they don't live on campus.

My view is that there are too many colleges: supply versus demand for students. I see the whole college system shaking out with small private colleges being closed down first (the high academic colleges with large endowments will survive). Next you will see states that are losing population having to close the small state "normal" school. States losing population like WV; Ohio; Michigan; New York will have to face some serious decisions concerning colleges. Some states like NC; SC and Florida are increasing colleges due to population increases.

As some have posted, everyone doesn't need a college degree to make a middle class income. Kids today are changing. I had a friend whose son spent years trying to become a professional firefighter and now most jurisdictions can't find people that will apply for the job.

[SuperAnjario]

We need to smartly partner with WVU to kill off the small, public colleges.  It?s the only path forward.

All the kids who want to go to school need to go to Marshall or WVU.  We don?t need Fairmont, Bluefield, etc.

[svherd]

We're in a pickle for sure. The area is losing population, less kids to recruit. Marshall really needs to put on a full court press on a 3 hour radius from Huntington. Focus on getting out of state kids on campus. Make all students one fee - we'll have to, to be competitive. Focus on your strengths and make them stronger. Improve online offerings when possible. Drop the SAT/ACT requirement - many schools have.
Give scholarships to kids at all levels, not just those with high GPA's/test scores. jmho

[MUther]

Can anyone explain to me what the disadvantages/advantages of Marshall going big on an online program would be? Does having a large online presence hurt the reputation of the schools academics vs the traditional bricks and mortar school?

The only way I see Marshall growing enrollment is via online, but it seems like that if it could have been done that it would have been done by now. Maybe something like that is part of Brad Smiths vision.

Saw one of the Liberty posters say they received an extra $100M from online enrollment last year.  Education has always been about what you put into it.  You can get the same or better education online as in class.  And you can get a meaningless degree where you didn't learn much by being on a campus. 

There's still a stigma that surrounds online programs as diploma mills, but I'd wager the people that pay for and take online courses are probably more dedicated, on average, to receiving a degree they can better their lot in life with, than kids that are going to school because their parents expect them to and are really there for the social experiment that is college life.

We should have started building online degrees as soon as enrollment and population began to decline in the mid 90s, when the technology and internet became available to everyone.  But there is no excuse in 2023 not to have full degrees available online for the masses.  It's easy money and the degrees can have integrity if done correctly.

[whf]

Saw one of the Liberty posters say they received an extra $100M from online enrollment last year.  Education has always been about what you put into it.  You can get the same or better education online as in class.  And you can get a meaningless degree where you didn't learn much by being on a campus. 

There's still a stigma that surrounds online programs as diploma mills, but I'd wager the people that pay for and take online courses are probably more dedicated, on average, to receiving a degree they can better their lot in life with, than kids that are going to school because their parents expect them to and are really there for the social experiment that is college life.

We should have started building online degrees as soon as enrollment and population began to decline in the mid 90s, when the technology and internet became available to everyone.  But there is no excuse in 2023 not to have full degrees available online for the masses.  It's easy money and the degrees can have integrity if done correctly.

Good post; and I think that the stigma about online degrees is beginning to be diminished as more and more folks get them from public or private institutions that are not 100% online; physical plant universities where a choice of how you attend is available.

[coalherd]

Saw one of the Liberty posters say they received an extra $100M from online enrollment last year.  Education has always been about what you put into it.  You can get the same or better education online as in class.  And you can get a meaningless degree where you didn't learn much by being on a campus. 

There's still a stigma that surrounds online programs as diploma mills, but I'd wager the people that pay for and take online courses are probably more dedicated, on average, to receiving a degree they can better their lot in life with, than kids that are going to school because their parents expect them to and are really there for the social experiment that is college life.

We should have started building online degrees as soon as enrollment and population began to decline in the mid 90s, when the technology and internet became available to everyone.  But there is no excuse in 2023 not to have full degrees available online for the masses.  It's easy money and the degrees can have integrity if done correctly.

Well, the big issue with online education, etc., is just when Huntington will obtain the latest high-speed internet, 5G, etc., etc., which would no doubt be a big plus for any MU efforts to grow and offer more online courses, degrees, etc.  Been talked about forever; Williams has been mayor for what, at least his third term now, IIRC.  Only "talked about" big ticket projects, "game changers", etc., in last decade or so, Riverfront development, East end, Highlawn developments, remain just that, "talked about projects".  Only development in the 3rd Avenue to the River area is what MU has done/is doing, specifically the baseball facility.  Where is the private investment, or other public-private partnerships which were/are expected to bring in Jobs, employment, investment aside from that done by MU and the State?  Only visible growth under this current City "leadership" team is pretty clear the never-ending, ever-growing Needle Exchange industry!  Oh, one other "plus" on the ledger is that apparently the State, and City, are FINALLY going to actually get going on the Hal Greer Corridor upgrades, enhancements from Third Avenue out towards I-64!!

[GreenSteve]

Here's the Moody's report:

https://www.moodys.com/research/Moodys-downgrades-Marshall-University-WV-to-A2-outlook-negative--PR_907946898


The downgrade to A2 on the university's outstanding rated revenue bonds reflects the issuer rating and incorporates the university's ability to access a broader pool of legally available funds for the purpose of making debt service payments in addition to the identified pledged revenues.

RATING OUTLOOK

The negative outlook is supported by Moody's expectation of continued enrollment challenges and very thin operating performance.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS

-     Strengthening of brand and strategic position, indicated by stabilization of enrollment and sustained net tuition revenue growth
-     Material improvement in operating performance leading to strengthened debt service coverage

-     Significant strengthening of the university's liquidity

[Johnnyherd]

Kids are skipping college in record numbers.  Brad Smith said many of the college's that are in business now won't exist in 5-10 years. 

[MUther]

We don't need better internet to run online classes.  I'm sure the university runs off a massive F-O trunkline, anyway.  And many of the people that would be taking online classes wouldn't be from here.  If we could get 5k more students through online classes it would be a huge boon to coffers at next to no extra cost to Marshall.  Problem is now we're competing with everyone starting this instead of pioneering it. 

If we'd had today's internet when I went to college, I probably would not have, nor wasted time in high school.  You can learn more about anything in 5 minutes online than all day in a classroom if you have the desire.  And if you don't understand something there is a forum for everything.

[Flat Tire 2]

Some interesting information on MU online degrees. The cost to the student is reduced so you have to have a lot of online students to generate revenue. You still have the expenses of the campus physical plant and salaries Please note that online students don't pay athletic fees as I posted in an earlier thread and probably wouldn't attend and games.

"An affordable college education. Our online students benefit from a special distance tuition rate that is less than Marshall?s regular tuition costs, and out-of-state online students pay the same special rate as West Virginia students. In addition, fully distance education students do not pay fees for on-campus services."
https://www.marshall.edu/online/

The above link provides access to classes online.

The below link gives the undergraduate degrees; graduate degrees and graduate certificates. I count 32 undergrad and graduate online degrees offered by MU. 11 graduate certificates mostly in education mostly in Education.
https://www.marshall.edu/online/#degrees