By Adam Clark | NJ Advance Media for NJ.com
on March 20, 2017 at 2:13 PM, updated March 20, 2017 at 4:30 PM
MADISON — New Jersey’s second-most expensive college has been losing money and faces a difficult path to regaining financial stability, according to a Wall Street credit rating agency.
Moody’s Investors Service on Friday downgraded Drew University, a private college of about 1,800 students in Madison, for the second time in 15 months.
The downgrade reflects “the continued weakening of the university’s financial viability,” Moody’s reported. Drew, which costs more than $47,000 a year in tuition and fees, is operating with unsustainable deficits and relies on loans or money from its diminishing endowment to cover its bills, the agency said.
Moody’s dropped Drew’s rating from Ba3 to B2 on one set of bonds and from Ba3 to B3 on another. All of those ratings are categorized as junk bonds on Wall Street, and Drew’s credit outlook remains negative.
The latest downgrade could make it more expensive for Drew to borrow money in the future. It also marks the latest sign of financial trouble at the state’s small private colleges, where enrollment has plummeted as students seek less expensive options.
“This is disappointing,” university President MaryAnn Baenninger wrote in a letter about the downgrade sent to faculty and staff. “But it will not deter us from continuing steady progress towards a sustainable financial future.”
