The credit ratings of English universities risk being damaged by a slowdown in their enrollment of full-time students from outside the European Union.
English universities risk higher financing costs
The credit ratings of English universities risk being damaged by a slowdown in their enrollment of full-time students from outside the European Union, according to a recent credit outlook paper published by the Moody's rating agency.
The agency cited a recent report by theHigher Education Funding Council for England that said enrollments had stagnated for the past two years, following strong growth in previous years, raising fears that Britain might be losing out to rival international education providers in the United States, Australia and Canada.
The main reason for the stagnation was a 1 percent annual decline in post-graduate entrants from 2011 to 2013. "Declines are largely due to new student visa requirements, highlighting universities' exposure to external events," Moody's said.
The change hurts the credit rating of the universities, making it potentially more expensive for them to borrow money, because foreign students make an important contribution to revenues. Fees for students coming from outside the European Union were an average 12 percent of all university revenues in 2013, up from 8 percent in 2008, and were the fastest-growing revenue source from 2008 to 2012.
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