S&P - Public Finance Criteria (2007). - The Global Clearinghouse

Education And Non-Traditional Not-For-Profitsapplicants to an institution’s programs—for undergraduates,graduate, and professional students.Standard & Poor’s measures completed applicationsonly, and evaluates the acceptance rate. For themost competitive institutions, acceptance rates ofbelow 20% are increasingly common. Among theinvestment-grade rated universe, acceptance ratesvary from a low of 5% to as many as 95% of studentsbeing admitted from completed applications.Matriculation rates, measured by the percentage ofadmitted students who enroll, range from as low as15% to as high as 80%. Generally, the lower theDocumentation RequirementsBond documents■ Bond resolution or indenture.■ Lease or mortgage.■ Official statement.Demand information■ Five years of headcount enrollment information brokendown by undergraduates and graduates and reflectingfull- or part-time status.■ Five years of first-time freshman application information,including acceptances, matriculants, and student qualityindicators and average test scores.■ Top 10 competitor institutions and win/loss statistics,if available.■ Program offerings indicating additions and deletionsof programs over the past five years.■ Five years of student fee tuition and room andboard charges.■ Five years of faculty information broken down by fullandpart-time faculty, percentage tenured, and percentageholding doctorates.Financial information■ Five years of audited financial statements and currentyear budget summary.■ History of state appropriations and formula used todetermine appropriation, if applicable.■ History of annual giving, capital campaign, and funddrives, including participation rates and goal success.■ Endowment investments, investment reports,and spending policy.■ Capital improvement and future debt plans, andcomprehensive debt service schedule.Management■ Brief management biographies.■ Description of governing board or body and relationshipwith institution.■ Strategic plan.acceptance rate and the higher the matriculationrate, the more competitive the institution.Sometimes, more specialized schools such as engineering-baseduniversities, or art and music schoolsexhibit a high degree of self-selection. Acceptancerates may be slightly higher than for other comprehensiveinstitutions, but at the same time, matriculationrates may be higher as well. Standard & Poor’sconsiders whether a particular niche changes thedegree of selectivity for an institution.Geographic diversity. As a rule, the wider aninstitution’s student draw or geographic diversity,the less likely it is that a regional demographicdownturn will affect enrollment. Hence, a widegeographic draw is a rating strength. However, inattempting to widen its draw, an institution maylose ground on its matriculation rate, since applicantsfrom farther away are often less likely tomatriculate than those closer to the college.Sometimes institutions attempt to widen their geographicdraw, but they may do so at the expense oftheir historic demand base. States like California,Texas, and Florida (high growth states) create specialcircumstances in the assessment of demand.Rapid population growth and the vast populationin these states makes it difficult for an institution toexpand geographic diversity. Location in a highgrowth state is generally viewed as a positive creditfactor for private institutions as the potentialdemand for an institution grows naturally.Student quality. Strong student quality, as measuredby class rank or average high school GPA,standardized test scores (SATs and ACTs), andother factors, enhances a school’s ability to withstanda decline in demand. Schools with high-qualitystandards often can maintain enrollment bylowering admissions requirements. Since studentquality measures differ substantially from one collegeto another, care is taken to understand themethod used at the institution being rated. Whilestudent quality measures are one indicator of flexibility,Standard & Poor’s never views these scoresand ratios in isolation.Faculty. High levels of tenured faculty generallymean higher levels of fixed expenses for items suchas salary and benefits. In addition, fixed faculty levelsmay not allow a school to easily change programofferings to reflect current demand, thereforelimiting an institution’s flexibility. Applications, inturn, may drop off if program offerings do notmatch current preferences. A high tenure rate cancreate problems if the number of faculty needs tobe adjusted. Standard & Poor’s considers a tenureratio of over 70% to be somewhat constraining.Nonetheless, most highly rated institutions alsohave a high rate of tenure for full-time faculty.176 Standard & Poor’s Public Finance Criteria 2007