While reiterating its current stable outlook for the U.S. Higher Education sector, Moody’s Investors Service cautions that conditions have worsened and that its rating outlook could turn negative by 2009, according to a mid-year outlook issued to reflect changing conditions.

“Despite current challenges, the U.S. higher education sector retains formidable credit strengths and operates under a resilient business model that limits the influence of individual customers and suppliers, and largely prevents rapid deterioration of revenues that can occur in sectors like heath care,” said Moody’s Vice President Roger Goodman, author of the report. “As in prior periods of economic weakness, most colleges and universities enjoy relatively consistent student market demand and have thus far sustained good pricing ability.”

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