Citing lackluster enrollment and $43 million in outstanding debt, the bond rating firm Moody’s has lowered the credit rating of Saint Michael’s College.

Moody’s, which uses a standardized system to measure projected investor loss in the event of default, also changed the college’s financial outlook to “negative.” That indicates the possibility of “further credit deterioration if the college is not successful in planned strategies to stabilize enrollment and grow student related revenue,” according to a company document dated December 5.

In spite of its weakened bond score, the Moody’s memo notes that St. Michael’s has sufficient cash reserves to “provide some runway to work through financial challenges and pursue strategic objectives.” But school officials, the memo suggests, will have their work cut out for them: St. Mike's relatively small size, aging infrastructure, and “weakening brand and strategic position” present potential barriers to shoring up its finances.

Enrollment at the four-year private college in Colchester has declined steadily over the past several years. The number of full-time undergrads dropped from 1,646 in 2018 to 1,193 today, the college reported in a financial disclosure.

St. Mike's tuition and room and board cost just shy of $65,000 a year. 

Vice president of enrollment and marketing Kristin McAndrew noted in a 2021 interview with the the student newspaper, the Defender, that the pandemic precluded many accepted students from visiting the campus, which may have played a role in the school’s lower-than-expected yields that year.

“At St. Mike’s, where approximately 75% of our students come from out of state, that campus visit is critical,” she told the paper. “In a traditional year, approximately 50% of our accepted students would have visited campus, and this year, less than 20% were able to visit.”

In a statement to Seven Days, Robert Robinson, the college’s vice president for finance and administration, said the immediate impact of the downgrade would be “very small, as all of our debt is fixed rate.”

“Saint Michael’s College is facing the same enrollment pressures as many other schools regionally and nationally, resulting from a well-documented decline in high school graduates in the region,” Robinson said. He noted that the college’s strategic plan outlines some of the initiatives the school hopes will strengthen its position, including expanding the school’s online offerings and investing in its athletic program.