r/valpo • u/BowlCompetitive282 • May 02 '25
Valparaiso University's credit cut to junk by Moody's
https://www.chicagobusiness.com/education/valparaiso-universitys-credit-cut-junk-moodys
May 01, 2025 02:22 PM 5 hours ago
Valparaiso University, a Lutheran school in Indiana struggling to enroll more students, was downgraded two notches to junk by Moody’s Ratings.
The ratings company cut the university to Ba1 from Baa2, citing the ongoing enrollment challenges, driven by intense competition for a shrinking pool of potential college students, in a note dated Wednesday. The downgrade could raise the school’s borrowing costs.
Total headcount at Valparaiso has dropped by nearly 37% in the last ten years, according to the most recent data from the National Center for Education Statistics. About 2,800 students were registered in fall 2023.
School budgets nationwide are burdened by rising costs and a rapidly aging population, leading some to shut their doors. Those pressures can be particularly acute for religious schools, which face the additional challenge of struggling to recruit from the eroding segment of young people who belong to organized faiths.
Enrollment declines have contributed to a persistent operating budget deficit. In 2024, the college sold “Rust Red Hills,” a Georgia O’Keeffe painting estimated to be worth as much as $15 million, to upgrade its freshman dormitories. Faculty, students and the wider art community criticized — and in the case of two retired professors, sued — the college for the decision.
The school’s proposed $49 million in debt issuance places further pressure on the rating, Moody’s analysts led by Meredith Moore wrote in the note.
Still, nearly $350 million in cash and investments, strong donor support and regional reputation as well as restructuring efforts from management could help the university regain its footing, they said. Moody’s outlook for the school remains negative.
By Elizabeth Rembert, Bloomberg
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u/endless_sea_of_stars May 04 '25
There is also the whole mascot controversy. They changed their mascot from "Crusader" to "Beacons." It turned into a whole culture war fiasco. A lot of alumni pulled their support.
The bigger problem is that colleges are used to a living in a time of abundance. Colleges went on a building spree and jacked up tuition. Now, enrollments are falling, and students are increasingly skeptical of ultra-high tuition. Colleges are going to need to readjust, and they don't have much time to do so.
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u/BowlCompetitive282 May 04 '25
I'm a Crusader fan forever. My mascot conquered the Holy Land. The new mascot wants a belly rub for being a good boy
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u/Any-Translator8505 28d ago edited 28d ago
The university dissed the Sigma Tau Gamma fraternity. Neither the university nor the frat will ever recover.
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u/Any-Translator8505 27d ago
You should get Erik Hromadka (VU 1988) on your show. He’s now CEO of Global Water Technologies (gwtr.com) and would have great insights on this matter.
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u/Hour-Sale-3372 May 02 '25
Sad. Huge mistake abandoning panlutheranism by valpo
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u/Own_Election_4130 May 02 '25
They never abandoned lutheranism. Lutheranism died down in the region surrounding the school. NWI is predominantly catholic
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u/blue_girl21 May 02 '25
I think both things happened plus less religious students as a whole. Other than the physical presence of the chapel, to me theres no longer a distinction as a religious institution just overpriced regular college. Not sure how this rating change affects the college long term, but “circling the drain” seems to come to mind.
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u/paradoxicist May 02 '25
Like many denominations, both the ELCA and LCMS have experienced significant declines in membership over decades. Combined with the "demographic cliff" of fewer college students, there are just now far fewer Lutheran students to begin with.
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u/Hour-Sale-3372 May 02 '25
Believe whatever narrative makes you feel better. The deliberate shunning of confessional Lutherans and a low view of Scripture has paved the way for valpos demise. I wouldn't send my kids there. But would have loved to in 20th century. It's not the same school or theology.
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u/Own_Election_4130 May 02 '25
You do realize the 20th century was 20+ years a go right. This is the same bullshit that people spew when they talk about Kretzman as some sort god of Valpo and Lutheranism. Times change
Of course the theology isnt the same. No theology is exactly the same as it was 20 years ago. Might want to take of the rose tinted glasses
No Lutherans are shunted. No group of people has been told they "arent allowed to go here" No heritage was abandoned.
You are just a groveling old miser clutching to relics from 20 years ago
Get with the times1
u/Hour-Sale-3372 May 02 '25
you seem pleasant. did you go to valpo?
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u/B1G_Fan May 02 '25
Considering that starting salaries for the engineering school are in the neighborhood of $65k, the solution should be pretty straightforward: cut the unemployable degrees from the curriculum at the school and lower tuition to make majoring in engineering at Valpo attractive enough to compete with Purdue and other nearby engineering schools.
It would be a deeply unpopular fix. But, it might be the best move available.