The Chronicle of Higher Education responded to the credit-rating agency’s report, utilizing the expertise of UW–Madison’s Nicholas Hillman, an associate professor with the School of Education’s Department of Educational Leadership and Policy Analysis. He also is an affiliate of the Wisconsin Center for the Advancement of Postsecondary Education (WISCAPE).

According to Moody’s prediction, operating expenses will outpace revenue growth at most institutions, due to factors like low revenue growth from tuition. The report predicts that other sources of revenue, like state funding for public colleges, should remain stable.

According to Hillman, “delivering a high-quality education is labor-intensive and expensive.” This follows the astounding figure that, at most higher education institutions, up to 75 percent of expenses are labor related. It’s expected many college and universities will be able to adapt to these issues, but in doing so may accrue long-costs, as spending in areas like academic programming and technology are necessary to boosting their competitive edge.

Hillman comments on the nature of institutional spending, saying “It’s just the nature of the beast.”

Read the full article here.