Thursday, October 17, 2013
Crain's New York Business: Brooklyn Law School Faces Debt Downgrade:
Standard & Poor's on Tuesday warned Brooklyn Law School that the institution needed to reverse its financial decline or face higher borrowing costs.
In a report, the credit ratings agency lowered its outlook on the school's debt, issued by the New York State Dormitory, to negative from stable. The lowered outlook means the rating agency believes there is a one in three chance it could downgrade the debt, and the decision on whether to change the BBB+ rated debt could come within the next two years if Brooklyn Law's fiscal problems don’t improve. ...
Law schools in recent years have seen steep drops in enrollment and tuition revenue and the ratings agency said that trend could continue for the next two years. Brooklyn law has been especially hard hit. Headcount decreased 10% to 1,137 this fall from a year ago and 22% over the last three years, the ratings agency said.
Competition for students has led to discounts on tuition. Even though full-time tuition increased 2.5% at the school this year to $51,243, the school has increased the amount it offers in grants or scholarships to 37%, compared to 15% in 2007, according to S&P.
For the fiscal year ended, June 30, 2012, Brooklyn reported a $996,000 operating deficit, the report said.