What the media left out

By:  Diane Benjamin

Media did report Illinois universities had their credit ratings downgraded by Moody’s.  Their details were sketchy though.

Here’s the story:  https://www.ilnews.org/news/economy/moody-s-downgrades-seven-of-illinois-public-universities-five-speculative/article_bd88b102-4d66-11e7-8a6d-af95b89dd478.html

The University of Illinois’ new rating is A1 with a negative outlook.

Read the story – this is because U of I is doing nothing to control costs and relies too much on the State.

Illinois State University was downgraded to Baa3 with a negative outlook.

The new rating is only one notch above junk and still considered “acceptable credit quality” but “cash-flow protection may be narrow,” according to a separate Moody’s rating research document.

Aren’t we told ISU is doing a great job weathering the crisis caused by Springfield?

Quotes:

The State of Illinois’ rating is one notch above non-investment grade, or junk status, and ratings agencies have said it faces another downgrade if there’s not an agreed-upon budget by next month.

The State was downgraded after lawmakers left the capital city last month without passing a budget.

The story above is dated June 10, 2017.

Quote from the source who sent this story to me:
Our state is in terrible shape – no fiscal responsibility – out of control completely and they wonder why the Governor has been so hard-nosed on the budget?  Good for him – it is time to stop the craziness!
.
Rauner could play nice to just get something passed.  He would rather fix the problems, the games have gone on for too many years already.  Anything else is insanity.
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Comments

  1. So…a question for you Mayor Koos and the city of Normal…. How much did you borrow for the Uptown Normal project? My guess is that you have quite a few years left to pay this loan off, right? And paying this loan off is dependent on ISU continuing to be a cash cow for the city of Normal for all the years necessary to pay off the debt for the Uptown project? So in essence you have “bet the farm” that higher education and specially ISU will remain financially viable and the cities cash cow for many years to come? So what I am seeing here in the attached article is that all of higher education is in trouble in Illinois and it is not just because of the budget issues in Springfield. They appear to have priced themselves out of their own market. I am not a highly educated man but I can easily see that this “bet” may not have been such a good idea.

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  2. “Aren’t we told ISU is doing a great job weathering the crisis caused by Springfield?” When you compare it all other state schools? Absolutely.

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    • Maybe they should dip into the endowment. Maybe they have and we just don’t know. You did see ISU and now lower than U of I?

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    • They are lying to everyone here. Higher education in general is deep trouble. ISU recently announced that it will follow the other state schools (U of I is the exception) and have a drop in their fall enrollment. With a few exceptions, the price of education is not worth the extremely high price. ISU and higher education have been on a spending and adding bureaucracy spree for a long time. The students and the state have been footing the bill. Both the students and the state are saying enough is enough.. lower your prices and then control your costs please. Higher education’s response is to cry about lack of a state budget and raise tuition (ISU decided to not raise tuition this year). We have an entire generation that right now not able to buy houses or start families because of their student debt. Yes, you guessed it… this can’t go on forever. Do you hear anything about ISU cutting costs? No but you will hear a lot of crying about the state budget. The media here tells everyone what the establishment wants them to hear. ISU is in trouble and they know it.

      “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair

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  3. Seriously everyone – read this article and you will see what is really going on with Illinois education – look at the salaries – look at the waste – these are organizations that spend money in ways that the private sector would never do… yet the state and students must pay for it and they are not accountable in any way? https://www.illinoispolicy.org/moodys-downgrades-7-illinois-universities-5-are-junk/

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    • I haven’t gotten over the high 6 figure payoff to the former president right before he got arrested.

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      • For sure… look at the compensation of the these college administrators… and then look at the pension benefits….OMG Are you kidding me? But there is nothing left to cut, right? Cry me a river a tears for your funding problems…. How about we get back to educating our kids?

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  4. I agree, “According to the Illinois Board of Higher Education, over half of Illinois’ 2,465 university administrators received a base salary of $100,000 or more in 2015.” Is absolutely insane. This does not happen next door in Indiana, Iowa, or Missouri. Administrative bloat needs to be cut AND the state needs to invest in education. That will bring down the cost.

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  5. As the resident Anarchist on this site, I would like to point out that we can lay the blame for the high cost of education at the university/college level on the existence of government itself.

    I am sure we are all aware that student loans made by banks and lending institutions are backstopped by the federal apparatus via student loan guarantees. As a result, the lending of money to a student has become a risk-free venture for the banks. A person can declare bankruptcy and have all other loans renegotiated (or even eliminated), but those student loans WILL be paid off – those loans are NOT negotiable.

    Universities and colleges across the country did the only thing which makes perfect sense in this case – they raised the price of tuition. Why is this obvious? If there was a business which is guaranteed that they would be paid regardless of the price for goods/services provided, then quite naturally they would choose to keep raising that price. The only hindrance to this is the willingness of the customer (in this case, a student) to actually take out a loan for such a vast amount of money.

    At such a point, the prudent course of action would have been to disenfranchise the universities and colleges from the state government apparatus; that is to say, that all the universities and colleges should have been privatized and funding from state governments eliminated altogether. Again, why is this obvious? Because we are told that government’s raison d’tere is to provide a service which cannot be provided elsewhere by other means. Since funding universities and colleges via tuition is guaranteed, what purpose is there to funding higher education by way of taxpayer dollars?

    The result so many years later is that student loans are the highest portion of overall debt in this country. We have made generations of debt slaves. The winners are the banks and lending institutions which have made billions of dollars from this arrangement. While I personally have no beef with banks and lenders, I am always amused by leftist/socialist/’progressives’ who never see the connection that benefits the ‘evil capitalist’ institutions they claim to abhor and despise.

    Since I cannot go back in time and fix this arrangement, I suggest the universities and colleges continue to raise the cost of tuition to cover their costs and debts without relying on taxpayer funding to bail them out.

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