Northeastern Illinois University has received a one-notch upgrade to its credit rating from Moody’s Investors Service after a three-notch upgrade in December 2021. This movement marks a significant and rapid turnaround in the financial outlook of the University, which Moody’s regards as “stable.”
“As a result of these upgrades, the University can now pursue refinancing of its debt by taking advantage of lower interest rates if the market is favorable,” President Gloria J. Gibson said. “The University can reap several benefits from the refinancing, including improved operational flexibility and increasing financial resources to invest back in the University community.”
Moody’s noted a “continued strengthening of the State of Illinois’ [stable] fiscal condition with positive downstream effects to the university and an improving operating environment,” as the rationale for the upgrade. The State of Illinois recently passed its 2023 budget with a 5% increase for Northeastern and increased funding for the Monetary Award Program (MAP), which provides financial aid to students. The state is also increasing contributions to its pension program, which will lessen the risk of future pension liabilities and associated contributions to Northeastern.
Moody’s report noted three factors that could continue to support and upgrade ratings in the future:
- Continued improvement in the state's fiscal condition over multiple years, resulting in further strengthening of NEIU's operating environment
- Significant improvement in strategic position, reflected in enrollment and net tuition revenue growth and less reliance on the state to fund operations
- Continued growth in balance sheet reserves
“I would like to thank Vice President Manish Kumar and the entire Division of Finance and Administration for the successful financial management strategies that have led us to this point,” Gibson said. “This Moody’s upgrade reflects expectations that we will continue managing expenses as the University faces continued enrollment pressures.”