Seven public universities in Illinois are having their credit ratings downgraded. Moody’s Investors Service downgraded the ratings for the University of Illinois, Southern Illinois University, Eastern Illinois University, Illinois State University, Western Illinois University, Northeastern Illinois University, and Governor’s State University. Only Northern Illinois University escaped with its rating intact.
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The action comes two months after Moody’s downgraded the rating for the state. Tom Hardy of the University of the Illinois says that made this downgrade an expected one. “It’s disappointing and unfortunate,” Hardy said, “but not a surprise inasmuch as we’re a public university in Illinois, a state whose fiscal problems are well known.”
The downgrades affect $2.24 billion in debt – $1.56 billion of which is owed by the University of Illinois. The report casts negative outlooks for all those schools, meaning more downgrades could come in the next 12 to 24 months. Hardy believes ratings for the universities can bounce back only with help from state lawmakers. It’s really a matter of whether or not Springfield can get its financial house in order, and begin to raise the state’s debt rating,” Hardy said.
The lower ratings mean it will cost the schools more to borrow money. That could affect the University of Illinois’s plans for renovations to its hospital in Chicago, as well as the State Farm Center.