Valparaiso University’s credit cut to junk by Moody’s

[Milanmiracle]

Valpo may have bigger problems than Cooper Schwieger and All Wright transferring. What this means for them long term, who knows?

https://www.chicagobusiness.com/educati ... unk-moodys

Valparaiso University, a Lutheran school in Indiana struggling to enroll more students, was downgraded two notches to junk by Moody’s Ratings.

The ratings company cut the university to Ba1 from Baa2, citing the ongoing enrollment challenges, driven by intense competition for a shrinking pool of potential college students, in a note dated Wednesday. The downgrade could raise the school’s borrowing costs.

Total headcount at Valparaiso has dropped by nearly 37% in the last ten years, according to the most recent data from the National Center for Education Statistics. About 2,800 students were registered in fall 2023.

School budgets nationwide are burdened by rising costs and a rapidly aging population, leading some to shut their doors. Those pressures can be particularly acute for religious schools, which face the additional challenge of struggling to recruit from the eroding segment of young people who belong to organized faiths.

Enrollment declines have contributed to a persistent operating budget deficit. In 2024, the college sold “Rust Red Hills,” a Georgia O’Keeffe painting estimated to be worth as much as $15 million, to upgrade its freshman dormitories. Faculty, students and the wider art community criticized — and in the case of two retired professors, sued — the college for the decision.

The school’s proposed $49 million in debt issuance places further pressure on the rating, Moody’s analysts led by Meredith Moore wrote in the note.

Still, nearly $350 million in cash and investments, strong donor support and regional reputation as well as restructuring efforts from management could help the university regain its footing, they said. Moody’s outlook for the school remains negative.

By Elizabeth Rembert, Bloomberg

[MissouriValleyUnite]

Remember seeing that downgrades also happened to Hartford, St Francis Brooklyn, & St Francis PA before dropping out of DI.

That said, if Mercyhurst can be DI, then Valparaiso still has quite a bit of runway.

[BCPanther]

No one has ever panicked like Doug Elgin did when he added them. Pretty amazing to torpedo 30 years of great work with one giant turd of a decision on your way out the door.

Vote them out. Stay at 10.

[Milanmiracle]

Remember seeing that downgrades also happened to Hartford, St Francis Brooklyn, & St Francis PA before dropping out of DI.

That said, if Mercyhurst can be DI, then Valparaiso still has quite a bit of runway.

It’s certainly feasible they turn things around, but the fact that the president and board chair resigned and are done at the end of 2025 could be a good thing, or bad thing, depending on how the hiring goes? Stating the obvious there. Dr Charles Small walked away after two years as athletic director and the current AD hasn’t been there a year. To say things are in a state of flux at VU is not an understatement. Selling art, mascot changes, closing the law school, ending the men’s soccer and tennis teams, there’s a lot of upheaval. The Drew family walking away and distancing themselves from VU… it’s a lot of upheaval and not much to be excited about as an institution. Fingers crossed.