S&P Global Ratings, which recently downgraded the outlook for the nation’s higher education sector, lauded the System’s innovative student recruitment and retention efforts, as well as internal collaborations and cost containment, and the University of Maine’s research excellence
ORONO, Maine — The nation’s top credit rating agency has reaffirmed the University of Maine System’s (UMS) strong rating and upgraded its future outlook in recognition of enrollment stability and prudent fiscal management.
Following its annual comprehensive review of UMS finance and operations, S&P Global Ratings maintained its second-highest investment grade for the System (AA-) and revised its outlook from “negative” to “stable” for the first time since 2021.
The improved outlook for the state’s largest educational and economic development enterprise is despite the recent downgrade of the nation’s higher education sector by S&P, Fitch Ratings (External Site) and Moody’s Ratings (External Site), and as UMS navigates unprecedented uncertainty about its future external funding, especially from the federal government.
“S&P’s rating and improved outlook recognizes the University of Maine System’s disciplined financial stewardship on behalf of Maine taxpayers and our bold strategies to stabilize enrollment and promote pathways to careers and upward mobility for our students,” said Chancellor Dannel Malloy. “It also reflects the strong support for our System from the Legislature, Governor Mills, Maine’s Congressional Delegation and many private sector and philanthropic partners and we remain committed to ensuring that their investments lead to even greater opportunities and outcomes for Maine’s people and economy.”
The strong rating enables the System to borrow at better rates to finance strategic modernization of its physical plant, which is burdened by $1.8 billion in deferred maintenance due to its age and decades of underinvestment as UMS prioritized student affordability and its workforce. Beyond increasing the return on investment for Maine taxpayers and tuition payers, the rating is an indicator of the System’s good fiscal health and confidence in its leadership and vision under Chancellor Malloy, Vice Chancellor for Finance & AI Integration Ryan Low and university presidents and budget officers, who have “made progress in rightsizing operations” according to S&P.
In its analysis, S&P noted the System has defied “unfavorable” state and regional demographics and despite strong regional competition and significant capital needs, is delivering stable enrollment by maintaining tuition affordability, innovating in student recruitment and expanding high-quality academic offerings, including through multi-university collaborations made possible by its unique unified accreditation.
S&P specifically cited the rapid growth of online learning led by the University of Maine at Presque Isle’s YourPace competency-based degree programs (External Site) and the research performance and productivity of the Carnegie-classified R1 University of Maine (External Site), which it expects will continue to drive revenue growth.
The ratings and outlook also reflect S&P’s favorable view of the System’s “importance to the future success of the state” and, in turn, increasing appropriations supported by Gov. Janet Mills and the Maine Legislature. Additionally, S&P lauded the System’s “solid revenue diversity relative to many similarly rated peers,” citing the $320 million investment in student success and innovation from the Harold Alfond Foundation known as UMS TRANSFORMS (External Site).
“We believe that continued, growing support from the state for operating and capital needs is imperative to the system’s long-term success,” the S&P report states, which also stresses the importance of continuing to implement cost containment measures and focusing on research.
About the University of Maine System
The University of Maine System (UMS) is the state’s largest driver of educational attainment and economic development and its seven public universities and law school are the most affordable in New England. Over the past two decades, UMS has awarded 106,362 degrees and spurred and strengthened thousands of small Maine businesses through its world-class research and development activities. For more information, visit www.maine.edu.
Media Contact:
Samantha Warren
Chief External & Governmental Affairs Officer
207-632-0389 / samantha.warren@maine.edu