CMU stays strong with Moody’s amid nationwide struggles in higher education
In a time when higher education institutions across the United States are grappling with financial instability and credit downgrades, Colorado Mesa University (CMU) emerges as a hold out among public institutions, demonstrating fiscal resilience and financial strength. While many colleges and universities face declining enrollments and budgetary constraints exacerbated by the response of the COVID-19 pandemic, CMU continues to uphold its reputation as a financial leader in the state of Colorado.
Recent reports have highlighted a troubling trend of credit downgrades in the higher education sector, with numerous institutions suffering from tightened funding, reduced student intake and an increasing burden of debt. Analysts point to a combination of decreased state funding, demographic shifts and a competitive academic landscape as primary factors contributing to the financial distress experienced by many traditional colleges and universities.
In stark contrast, Colorado Mesa University has maintained a stable "A2" rating from Moody’s, underpinned by very strong EBIDA (Earnings Before Interest, Depreciation, and Amortization) margins, which have averaged nearly 30% during the past five years. This performance starkly contrasts with the national median for "A" rated public universities and underscores CMU's exceptional financial governance.
CMU's success can be attributed to its critical role in western Colorado as a provider of both technical and academic programs — serving a diverse student population. The university's unique funding model, which includes substantial support from local governments such as the cities of Grand Junction and Montrose, along with Mesa County, has played a vital role in its financial strategy.
Moreover, CMU has benefitted from recent increases in state appropriations, reflecting growing governmental support in recognition of the university’s importance to the regional economy and its broader educational mission. Prudent financial management and strategic initiatives aimed at attracting and retaining students have further solidified its position.
As higher education faces an uncertain future, CMU’s approach might serve as a model for other institutions struggling to navigate financial hardships. The university’s growing wealth and liquidity levels enable it to support growth while continuing to invest in quality education and community service.
While the higher education landscape faces significant challenges, Colorado Mesa University’s focus on financial health demonstrates that it is possible to thrive even in challenging times. CMU remains a statewide leader in fiscal responsibility.