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Looking for Extra Credit, Schools Get Downgraded

By Kevin Spak, Newser Staff

Posted May 29, 2009 9:06 AM CDT

(Newser) – The credit crunch is starting to hit even top-tier universities, the Wall Street Journal reports. Both Moody’s and S&P stripped Dartmouth of its AAA rating this week. It’s the 20th college Moody’s has downgraded this year. “That’s comparable to the rate of downgrades universities saw during the dot-com bust,” said Moody’s managing director. “And we probably will surpass it.”

The downgrades will increase the price of credit, even as many schools are being pressured to borrow more. Endowments were so damaged by the market crash that even Ivy League schools are borrowing to fund day-to-day operations. In fact, Moody's says schools with the biggest endowment pools are the most strapped for cash; these schools draw a much bigger portion of their operating revenue from the shrinking endowments than more typical colleges, the Journal notes.

Students walk across the green at Dartmouth College in Hanover, N.H., in this 2003 file photo. (AP Photo/Toby Talbot/File)

A section of Dartmouth College's sports complex is shown in Hanover, N.H., in 2007. (AP Photo/Cheryl Senter)

Dartmouth College students enjoy the afternoon on the campus green in downtown Hanover, N.H., in 2007. (AP Photo/Cheryl Senter)

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Moody's Slaps Wall Street's Big Banks With Review

Along with most of Europe's banks

Students Revolt Against Big Bank Recruiting

Protests spread across Ivy League campuses

S&P: We'll Likely Declare Greece in Default

As Greece struggles to restructure debt

S&P to Put Euro Zone on Credit Watch

Announcement likely after markets close

S&P Lowers Belgium's Credit Rating

Cites 'protracted political uncertainty'

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Looking for Extra Credit, Schools Get Downgraded

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OTHER STORIES ON OUR RADAR

Ivy League • college • Standard and Poor • Moody's • endowment • Triple-A credit rating • credit rating

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Moody's Slaps Wall Street's Big Banks With Review

Along with most of Europe's banks

Students Revolt Against Big Bank Recruiting

Protests spread across Ivy League campuses

S&P: We'll Likely Declare Greece in Default

As Greece struggles to restructure debt

S&P to Put Euro Zone on Credit Watch

Announcement likely after markets close

S&P Lowers Belgium's Credit Rating

Cites 'protracted political uncertainty'

About Us

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Newser By Users

Community

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More News

What is Newser?