applicants to an institution’s programs—for under-
graduates, graduate, and professional students.
Standard & Poor’s measures completed applications
only, and evaluates the acceptance rate. For the
most competitive institutions, acceptance rates of
below 20% are increasingly common. Among the
investment-grade rated universe, acceptance rates
vary from a low of 5% to as many as 95% of stu-
dents being admitted from completed applications.
Matriculation rates, measured by the percentage of
admitted students who enroll, range from as low as
15% to as high as 80%. Generally, the lower theacceptance rate and the higher the matriculation
rate, the more competitive the institution.
Sometimes, more specialized schools such as engi-
neering-based universities, or art and music schools
exhibit a high degree of self-selection. Acceptance
rates may be slightly higher than for other compre-
hensive institutions, but at the same time, matricula-
tion rates may be higher as well. Standard & Poor’s
considers whether a particular niche changes the
degree of selectivity for an institution.
Geographic diversity. As a rule, the wider an
institution’s student draw or geographic diversity,
the less likely it is that a regional demographic
downturn will affect enrollment. Hence, a wide
geographic draw is a rating strength. However, in
attempting to widen its draw, an institution may
lose ground on its matriculation rate, since appli-
cants from farther away are often less likely to
matriculate than those closer to the college.
Sometimes institutions attempt to widen their geo-
graphic draw, but they may do so at the expense of
their historic demand base. States like California,
Texas, and Florida (high growth states) create spe-
cial circumstances in the assessment of demand.
Rapid population growth and the vast population
in these states makes it difficult for an institution to
expand geographic diversity. Location in a high
growth state is generally viewed as a positive credit
factor for private institutions as the potential
demand for an institution grows naturally.
Student quality. Strong student quality, as meas-
ured by class rank or average high school GPA,
standardized test scores (SATs and ACTs), and
other factors, enhances a school’s ability to with-
stand a decline in demand. Schools with high-quali-
ty standards often can maintain enrollment by
lowering admissions requirements. Since student
quality measures differ substantially from one col-
lege to another, care is taken to understand the
method used at the institution being rated. While
student quality measures are one indicator of flexi-
bility, Standard & Poor’s never views these scores
and ratios in isolation.
Faculty. High levels of tenured faculty generally
mean higher levels of fixed expenses for items such
as salary and benefits. In addition, fixed faculty lev-
els may not allow a school to easily change pro-
gram offerings to reflect current demand, therefore
limiting an institution’s flexibility. Applications, in
turn, may drop off if program offerings do not
match current preferences. A high tenure rate can
create problems if the number of faculty needs to
be adjusted. Standard & Poor’s considers a tenure
ratio of over 70% to be somewhat constraining.
Nonetheless, most highly rated institutions also
have a high rate of tenure for full-time faculty.Education And Non-Traditional Not-For-Profits176 Standard & Poor’s Public Finance Criteria 2007
Bond documents
■Bond resolution or indenture.
■Lease or mortgage.
■Official statement.
Demand information
■Five years of headcount enrollment information broken
down by undergraduates and graduates and reflecting
full- or part-time status.
■Five years of first-time freshman application information,
including acceptances,matriculants, and student quality
indicators and average test scores.
■Top 10 competitor institutions and win/loss statistics,
if available.
■Program offerings indicating additions and deletions
of programs over the past five years.
■Five years of student fee tuition and room and
board charges.
■Five years of faculty information broken down by full-
and part-time faculty, percentage tenured, and percentage
holding doctorates.
Financial information
■Five years of audited financial statements and current
year budget summary.
■History of state appropriations and formula used to
determine appropriation, if applicable.
■History of annual giving, capital campaign, and fund
drives, including participation rates and goal success.
■Endowment investments, investment reports,
and spending policy.
■Capital improvement and future debt plans, and
comprehensive debt service schedule.
Management
■Brief management biographies.
■Description of governing board or body and relationship
with institution.
■Strategic plan.Documentation Requirements