Vermont Law School had its rating downgraded by Moody’s Investors Service. The rating went from Baa2 to Ba1 on the school’s $10.3 million Series 2011 Revenue Bonds that were issued by the Vermont Educational and Health Buildings Finance Agency, according to Moody’s.
Moody’s announced that it kept the Aa3/VMIG1 rating on the law school’s Series 2003B bonds due to a letter received from TD Bank. The document submitted was a Letter of Credit.
The reduction in ratings occurred due to the drop in enrollment for law students because of the drop in demand across the country.
Enrollment at Vermont Law School dropped by 3.5 percent in the fall of 2013 for all of its programs. New students from the JD program dropped by 45 percent from the fall of 2009 to the fall of 2013.
For Fiscal Year 2013, the operating size for Vermont Law School was just $28.2 million.
The net tuition per student has dropped or remained stagnant for the past four years. It is projected to drop again in Fiscal Year 2014 and Fiscal Year 2015.
Right now, the rating will not likely go back up because of the negative outlook for the school and its pressure on operating performance. The rating could continue to decrease if enrollment at the school drops, which leads to a weaker cash flow.
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