Fayetteville State University’s issuer credit rating upgraded by S&P Global Ratings
By Staff Report, posted Mar 2, 2023 on BizFayetteville.com
Standard and Poor’s Global Ratings upgraded Fayetteville State University’s issuer credit rating to A-, indicating the University’s improved fiscal stability and steady growth. Such ratings are a factor in interest rates when institutions and governments borrow money.
The ratings credit overview pointed to FSU implementing strategic initiatives, prudent leveraging of available resources and expanding funding sources as contributing to the bump.
“The challenging financial climate compounded by the negative impact of the pandemic over the last few years put FSU at a decided disadvantage with regard to its credit outlook,” said Lillian Wanjagi, Ed.D., FSU vice chancellor for business and finance and chief financial officer, in a press release. “The university overcame those disadvantages through diligence in managing its resources and responsibilities; S&P’s upgrade affirms FSU’s efforts to strengthen its capacity to provide a world-class education for residents of North Carolina, the military and beyond. The University’s fiscal responsibility is an integral part of that plan, and this upgrade is a clear sign that we’re on the right track.”
According to Wanjagi, key points in S&P’s upgrade include:
- An assessment of FSU’s enterprise profile as strong, characterized by experienced senior management supported by the UNC System, a healthy retention rate, and a history of stable to growing enrollment offset by declines in freshman applications.
- Other factors that were considered included increased state support for both operations and capital, with overall state funding expected to increase resulting from additional state funding committed to FSU in lieu of tuition revenue as outlined with NC Promise and a modest growth in full-time-equivalent enrollment given the success of its strategic initiatives.
“We have worked extremely hard with our partners in the UNC System and state government to fortify FSU’s financial foundation and advance our mission to offer a premier education that is affordable and accessible,” said FSU Chancellor Darrell T. Allison, J.D. in a press release. “Our upgraded rating is a testament to the University’s fiscal health, longevity and promise for students now and in the future. In a time when thousands of colleges and higher education campuses are closing, FSU is growing and getting stronger. We aim to continue that trend.”
Recent initiatives at FSU aimed at strengthening its academic opportunities and growing its footprint to support the upgrade include the following:
- Secured a historic $175 million state budget appropriation in 2021-22 to strengthen infrastructure and programs and rejuvenate the FSU campus.
- Secured FSU’s participation in the NC Promise Tuition Plan, which leverages state dollars to subsidize the cost of tuition for all enrolled students and reduce college costs.
- Applied COVID relief funding in 2021-22 to clear more than $3.2 million in student debt amassed during the pandemic for 2,367 students.
- Launched the 30-60-90 Free Summer School Program to provide free summer school classes to undergraduates with the goal of optimizing their on-time graduation.
- Announced a Military Tuition Scholarship which began providing free tuition to all military-affiliated students beginning Fall 2022.
- Secured approximately $8 million in private philanthropic support from key university stakeholders, including a transformative gift of $5.8 million from Anonymous Trust, to support initiatives that foster student success with a focus on students from Eastern North Carolina.
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