Happy Days Are Almost Here Again, But For How Long?

By Richard K. Vedder

Moody’s Investor Service periodically assesses the financial health of America’s universities, and recently they issued a more optimistic report, rescinding their overall “negative” outlook for schools and replacing it with a “stable” one. Universities are improving financially for multiple reasons. First, growing Covid-19 vaccinations are contributing to a decline in the health threat from the novel coronavirus. Second, this means schools are moving cautiously away from remote instruction toward traditional in-person learning. College kids are happier because, in addition to more and better learning experiences, there will be more drinking and fornication than in the period of Covid-19 austerity. Never underestimate the socialization dimensions of college. Third, all this means enrollments are likely to stop falling and possibly even increase a bit, and that revenue producing dormitories and cafeterias will resume more normal operations. Fourth, colleges have cut their spending substantially.