Though the downgrade is minimal, from Aa2 to Aa3, Moody’s Investors Service has cut the credit rating for schools within the Pennsylvania State System.
According to the Philadelphia Inquirer, weakening state support, a demographic decline, declining enrollment from feeder high schools, political limitations on the school’s ability to raise tuition, and a very large and growing pensions and health care benefit liability were all cited as reasons for the downgrade.
A recent rise in the debt-load carried by some schools was caused in part by the new construction of dormitories, meant to draw more students to local campuses.
Million-dollar payouts expected from the Sandusky sex-abuse case also came into consideration.
Philly.com has more on this story.