2016 has been a harsh year for the Suffolk Rams. In late January, Suffolk University’s then-president, Margaret McKenna was suspected of financial mishandlings and harsh leadership methods by board members. McKenna, who had been appointed only a year before, faced a report commissioned by the trustees that detailed her actions and was eventually fired by the board in July.
It is important to note that McKenna was Suffolk University’s fifth president in five years, including interims.
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As if matters did not look bleak enough, a recent article in The Boston Globe highlights the details of the latest report by Moody’s Investors Service. The report serves to deliver a basic investigation of the entire climate in higher education institutions, one of them being Suffolk. However, Moody’s did not shy away from pointing out that tension between the president of a university and that university’s boards and faculty can be dangerous for that school, both financially and actively.
Moody’s report made no threat to decrease Suffolk’s current bond rating, but we must remember that a school’s bond rating can be the key factor in securing the school’s interest rate to borrow money; additionally, a school’s bond rating can affect its interest among large donors and its reputation in other schools.
In 2014, the last time Suffolk was rated by Moody, the report stated the school’s five consistent years of low or decreasing enrollment and almost complete reliance on tuition for its operating budget are both the result of the endowment being considerably small at $185 million. Nevertheless, the school earned a reasonable Baa2 rating with a good outlook.
Suffolk University spokesman Greg Gaitlin said the enrollment decline between 2012 and 2015 was 40 percent from the Law School. This statistic echoes a national trend of decreasing attendance as well as an inner plan at Suffolk to lower the number of its law school students.
Currently, Suffolk University’s operating budget is roughly $300 million and its total debt is about $350 million. Moody’s Investors Service can adjust these rated entities if necessary.
Despite everything, Gaitlin was happy to report to the Globe that Suffolk University opened its doors this fall for the school’s second largest freshman class, the initial rating being 1,203 students. With Gaitlin stating the school has maintained academic quality and a stable group of longtime administrators, perhaps the fall 2016 semester will prove optimistic for Suffolk University.
