Columbia University risks losing top credit rating as Trump slams colleges

The Ivy League school was at the forefront of President Trump’s attack on top universities last year, agreeing to pay a $200 mn settlement to restore cancelled federal grants & contracts.

An entrance to Columbia University in New York, US, on Friday, March 7, 2025. The Trump Administration said it is canceling $400 million of federal grants and contracts to Columbia University, citing civil rights complaints against the Ivy League school by Jewish students. | Photographer: Yuki Iwamura/Bloomberg

Columbia University’s credit outlook was revised to negative by Moody’s Ratings, which cited rising risks tied to the “federal environment for higher education.”

The change reflects the potential for weaker finances and Columbia’s “lower wealth and liquidity relative to expenses as compared to other Aaa private universities,” Moody’s said in a report Friday. Outlooks serve as opinions regarding the likely direction of a credit rating over the medium term, according to Moody’s, which affirmed Columbia’s Aaa grade.

“The outlook also reflects challenges related to the federal environment for higher education that could constrain improvements in the operating performance including uncertain research prospects, changes in federal graduate loan policies and a declining pool of international graduate students in the US, that could impact Columbia’s high proportion of graduate and professional students,” Moody’s said.

The Ivy League school was at the forefront of President Donald Trump’s attack on prominent universities last year, agreeing to pay a $200 million penalty to resolve multiple civil rights investigations as part of a settlement to restore canceled federal grants and contracts. Columbia also agreed to pay $21 million to settle claims that Jewish faculty and staff faced unlawful workplace discrimination following the October 2023 Hamas attack on Israel.

Columbia said this week that it’s considering the issuance of $285 million of tax-exempt bonds, which would be sold through a state agency, and $200 million of taxable bonds.

“The reaffirmation of Columbia University’s AAA bond rating from S&P and Aaa from Moody’s recognizes the ongoing strength and resilience of the University operations, and management’s agility in navigating a complex operating environment,” a spokesperson for Columbia said in a statement. “The University remains confident in its ability to navigate potential future challenges to the sector.”

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