Treasurer Kennedy: Years of reduced funding for higher education are catching up with us

BATON ROUGE, LA – Citing limited prospects for sustained revenue growth, Moody’s Investors Service has lowered Louisiana State University’s credit outlook from positive to stable, State Treasurer John Kennedy announced Wednesday.

“This puts our flagship university one step away from a negative outlook which could result in a downgrade for LSU’s credit rating. We don’t want that to happen,” said Treasurer Kennedy. “Years of slashing state funding for our public colleges and universities and raising tuition, which puts college out of reach for many of Louisiana’s kids, are catching up with us. We need to stabilize funding for higher education.”

LSU borrows money for building projects. Moody’s assigned an A1 rating to $131 million in Auxiliary Revenue and Refunding Bonds, Series 2015, for student housing facility improvements. A downgrade in the university’s credit rating would make it more expensive to borrow money.

Moody’s wrote: “The revision of the outlook to stable from positive reflects limited prospects for sustained revenue growth due to potential reductions in state operating funding, tight state control of tuition pricing, and pricing sensitivity limiting out-of-state enrollment revenue growth.”

The report can be viewed here.

Michelle Millhollon
(225) 342-0012