Student Selectivity and Higher Education Institutions Credit Ratings
Journal of Financial Economic Policy, Forthcoming
39 Pages Posted: 3 Oct 2019 Last revised: 14 Nov 2020
Date Written: February 17, 2020
This paper investigates the relation between the creditworthiness of U.S. institutions of higher education and their student selectivity (i.e., demand and quality). We study whether the impact of student selectivity differs across public versus private universities; across the credit quality of the given public university’s state; and across the level of state appropriations for the given public university. We find that student quality and demand measures are significantly associated with their corresponding institution’s creditworthiness, especially for private universities. For public universities the association is weak and, contrary to our expectations, does not depend on the state credit quality or level of state funding. Our findings are robust to the inclusion of control variables.
Keywords: credit ratings, student selectivity, higher education
JEL Classification: G11, I23, L31
Suggested Citation: Suggested Citation