Fitch said the college has a debt burden that is too high for the rating category, which limits its operating flexibility and ability to fund future strategic and capital needs. Fitch predicted the college will need to balance its cash flow against strategic and capital demands.
Student-generated revenues are the college’s primary revenue driver, and Fitch noted its enrollment has incrementally increased in recent years despite consistent tuition increases.
The College of New Jersey spokesman Dave Muha said the pressures Fitch cited in adjusting TCNJ’s outlook largely exist across the public higher education sector and that TCNJ has held the line on tuition increases while state operating support remains stagnant.
“A second consideration, pension liability, is the state’s obligation and something the college has no control over but is now required to include in its financial statements,” Muha said in a statement. “The fact that Fitch reaffirmed our rating at AA- speaks to the strong enrollment demand the college continues to see. Four out of the last five years have seen us set new records for number of applications received and this year’s entering class will be our largest in decades.”