MONTPELIER (AP) - A Wall Street firm has downgraded the long-term debt rating of the Vermont State Colleges from an A+ to an A, saying it believes there is a low likelihood that the state would help out the state colleges in the case of financial emergency.

In the past, there was a moderate likelihood, Standard & Poor's said.

"This change results in the elimination of a one-notch boost to VSC's long-term rating; however, its stand-alone credit profile remains unchanged," S&P's credit analyst Jennifer Soule said Thursday.

The negative outlook was based on the state colleges' current operating challenges, including a decline in enrollment, Standard & Poor's said.

VSC Chancellor Tim Donovan said Friday he wasn't surprised by the change.

"Our underlining rating is still an A, it's still a quality bond, if we chose to go out and borrow. And quite frankly, there's nothing in this that affects any of our current financing so there's no operational impact of this. It may affect us a little bit when we go out to borrow in the future," he said.

The state colleges hasn't had an increase in its state appropriation in six years until last year and all of the increase went into more student aid so had not impact on the budget, he said. Changing demographics is also affecting enrollment, he said. New England is four years into an eight-year decline in the number of high school graduates, he said.

Overall enrollment at the Vermont State Colleges has dropped about 3 percent in the last two years, but is up about 17 percent from a decade ago, he said.


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S&P also noted that the state college continues to pursue unique strategies to attract new students. Those include dual enrollment, which allows high school juniors and seniors to take college courses for free, and early college programs.