College Bond Ratings: How It Impacts Admissions

Monday, August 9, 2021

Learn How Bond Ratings Can Impact Admissions

By Nat, IvyWise College Admissions Counselor

Most students understand that academic performance is a major deciding factor in college admissions, but what about the things out of students’ control like bond ratings?

At their core, colleges function a lot like businesses. To ensure their college is operating to its fullest potential, colleges need to consider many factors outside of student performance when making admissions decisions, including rankings, bond ratings, and institutional needs when reviewing college applications. Keep reading to learn more about how college bonds and ratings impact the admissions process. 

Look Through the Business Lens

At first, hearing that colleges function like businesses might sound pretty shocking. However, if you think about it, you can compare the degree you receive and the experience you have to something the university is selling. Their students and families are essentially their customers. Like every business, colleges need to market their product to compete with their competitors and attract top-tier customers.

Many of the decisions colleges make are around how they will market themselves to applicants. For example, earning a top spot on college rankings lists, such as those published by U.S. News & World Report, is often a priority because many students use these resources to build their college lists. One of the factors these lists evaluate is how selective a given college is, which is where the admissions office comes into play.

Colleges Want to Increase Their Selectivity

Increasing selectivity is one of the top ways colleges can improve their ranking. Since class sizes generally remain about the same, schools often look to increase the number of students who apply each year. To do this, the admissions office works closely with the marketing team to get more students to apply.

Colleges may emphasize their holistic review process to encourage more students to submit an application, as they will feel more confident in their chances even if the school is considered a reach based on their GPA and test scores. Other colleges may promote their need-blind status to entice applicants and their families to send in an application. Additionally, some schools may streamline the application process itself, potentially by removing supplemental essays or making testing optional, to help get their number of applications up.

Yield is Another Priority

Yield, or the number of admitted students who choose to enroll, is another factor that is weighed heavily in college rankings. Consequently, admissions officers are eager to admit students who they feel confident will matriculate because this will improve their overall yield. The easiest way to increase yield is by offering an Early Decision program, in which acceptances are binding. Admissions officers also evaluate a student’s demonstrated interest, by checking if the applicant visited the college, opened and engaged with emails from the university, and set their application portal up in advance. 

The Link Between Selectivity and Bond Ratings

Improving selectivity and yield doesn’t just help colleges rise in the rankings to market themselves, it also enhances their bond rating. Like every business, colleges are assigned a bond rating, which is heavily tied to college rankings. Bond ratings are issued by Moody’s Investors Service and ratings range from AAA (best) to C (worst). In 2018, out of a total of 482 universities, only about 20 had the highest rating. Bond ratings are important because the better an institution’s bond rating, the lower its interest rate would be if the college has to borrow money. Colleges are always striving to improve the student experience and the services they offer by investing in things like modern dorms, high-tech gyms, and world-class libraries. A good bond rating will help colleges to follow through on these projects because funding will be easier.

While the college admissions process may seem complicated at first and often out of students’ control, the more that students know, the more confident they will feel when it’s time to apply. If you are currently preparing to apply to college and looking for expert guidance, get in touch with our team today to learn how we can help you demystify the admissions process and submit the best applications possible.

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