Standard & Poor’s Rating Services (S&P) lowered the College of DuPage’s debt rating two notches on Friday, Feb. 12. The college score has dropped from ‘AAA’ to ‘AA’ for its outstanding general obligation bonds. S&P stated that part of the reasoning for this was the negative controversies surrounding the college.

The bond rating indicated the college’s credit quality. The score evaluates reflects the ability to pay a bond’s principal cost and interest in a timely manner.         

“The downgrade reflects our view of the college’s accreditation status being placed on probation recently by the Higher Learning Commission (HLC),” said Blake Yocom, a credit analyst for Standard & Poor’s rating services.

The agency also included other deciding factors for this decision, including the college’s lowered financial management assessment from “good” to “standard,” and the institution having unstable board governance.

The HLC put COD on a 2 year probationary period to resolve issues with the integrity of financial, academic, personnel and auxiliary functions, as well as the leadership of the college’s governance and administration.

“The negative outlook reflects the at least one-in-three chance that we could lower the rating further within the two year outlook period, given the uncertainty surrounding the college’s probation status and unsettled board turmoil,” added Yocom.

The appointment of David S. Olsen to the board on Saturday to break the 3-3 voting gridlock on the board could lead to fixing some of the issues vocalized by the HLC.

Although the rating has been a downgrade, the college is still in good standing. The agency noted that the college has a sizable supporting tax base that brings very strong incomes and extremely strong market value and a strong financial position.

The agency also noted that concrete steps have been taken by the new management on the board to eliminate its probation status towards a more stable governing structure. They said they could revise their outlook on the college as college governance becomes more stable and accreditation approval is regained.