Moody’s Investors Service has predicted a stable outlook for the U.S. higher education system during the 2020 fiscal year, after listing it negative for two consecutive years.
In its report on Tuesday, the credit rating agency said the larger comprehensive universities would see their revenue rise by 3.5-4.5 percent next year while smaller public and private universities would see a 2-3 percent jump in their revenue.
The income coming from patient care that affects a number of universities will see growth between 5 percent to 6 percent. The report also predicted the net tuition revenue growth of 1 percent for public universities and 2.3 percent for privates universities.
The overall stable outlook stemmed from the growth in state appropriations, gift revenue, and both research grants and contracts.
“If we’re using cash flow margins as a proxy for operational health, the majority of universities continue to generate good cash flow,” Michael Osborn, a vice president-senior analyst at Moody told Education Dive.
Last month, the agency had predicted a diminishing net tuition revenue growth for both private and public universities in the country during the 2020 fiscal year. It had attributed a decrease in net tuition revenue growth to flat enrollment, a focus on affordability and increasing tuition discounting.
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