Moody’s Downgrades Eastern Illinois University

Moody’s Investors Service has downgraded Eastern Illinois University.

The credit rating agency points to Eastern’s significant dependence on state appropriations and its declining enrollment.

Paul McCann is EIU’s treasurer and director of business services. He said the University in Charleston is disappointed by the rating decrease, but given the financial challenges facing the state, he said the downgrade makes sense.

“We’re doing what we need to do from the standpoint of staying solvent,” McCann said. “They were very appreciative of what we have been able to accomplish with the decline in revenue from the state. But at the same time the issues that it generates are of a concern.”

Moody’s also downgraded three other universities in the state, including Northeastern Illinois University, Northern Illinois University and Governors State University.

Republican State Treasurer Dan Rutherford said the downgrade means it will cost these universities more to borrow money.

“I do not think it is fair to students, parents and teachers to put residence hall and educational building upgrades in limbo because state leaders cannot pass solid pension reform measures,” Rutherford said in a statement.

The universities were placed under review after Moody's downgraded the state's financial outlook to negative from stable in December. Rating agencies put Illinois credit among the worst of any state largely because of an ongoing $97 billion funding gap in state employee pension systems.