Officials at Northern Illinois University are responding to recent action taken by Moody’s. The investors’ service downgraded the credit rating for four Illinois universities, including NIU.
Moody’s says its decision to downgrade NIU’s credit rating from A3 to A2 was largely driven by state funding issues. Currently, nearly 40-percent of the school’s operating budget comprises of money from Springfield. Moody’s says with the state constantly behind on payments, and with more cuts on the horizon, NIU stands to feel more budget pressure. Also cited was declining enrollment, turnover among senior financial leadership and ongoing legal investigations. The executive vice president of Finance and Facilities, Eddie Williams, is on paid leave in the wake of an FBI probe.
The man who is filling in for Willams, Steve Cunningham says despite some of the turnover, NIU maintains a sound financial team. He also says the downgrade shouldn’t affect the university in the short-term.
"If the university were going to issue new bonds, that action would have caused the interest rate that would be paid on the bonds to go up marginally, between 10 and 20 basis points. So that is not a significant effect." - Steve Cunningham
Cunningham stresses that NIU doesn’t plan to issue any bonds in the near future. Cunningham says while enrollment has been on the decline in recent years, he says they are encouraged by the number of new student applications.
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