Wright State University鈥檚 faculty union strike could affect the school鈥檚 credit rating if it continues much longer, according to an analyst for Moody鈥檚 Investor Services. A lower credit rating could make it more difficult for Wright State to take out loans.
Only two years ago, Moody鈥檚 lowered Wright State鈥檚 credit rating three notches from A2 to Baa2. At the time, analysts said the school鈥檚, 鈥渟evere financial deterioration in a short period of time," led to the downgrade.
Last year the agency affirmed the lower rating, noting failure to quickly resolve Wright State's faculty contract dispute could result in another downgrade. Union faculty have been working without a contract since it expired in 2017.
Now, as the faculty union strike stretches into a second week with no end in sight, Moody鈥檚 analyst Chris Collins says the ratings agency is keeping tabs on the situation.
鈥淎 place like Wright State University, it鈥檚 credit quality is largely tied to it鈥檚 brand and reputation,鈥� Collins says. A longterm strike, he notes, could damage Wright State鈥檚 reputation, and in turn its ability to attract new students.
鈥淚t could lead to a drop in enrollment," he says. "And with the drop in enrollment comes a drop in operating revenue. It would just make balancing operations that much more challenging.鈥�
Enrollment at Wright State has declined over the past several years. Last year, nearly 12,000 full-time students were enrolled at the school. That鈥檚 down from a peak of over 15,000 full-time students in 2011.
Collins says Moody鈥檚 has no immediate plans to downgrade Wright State鈥檚 credit rating. But, he says analysts will keep an eye on how the strike is ultimately resolved.
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