Fitch: Private nonprofits see lowest operating margins in a decade
Natalie Schwartz
July 17, 2025
The credit rating agency expects the environment for the higher education sector to deteriorate in 2025, thanks to federal policy shifts and other challenges.
Dive Brief:
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Operating margins at private nonprofit colleges have plummeted to their lowest levels in over a decade due to growing financial challenges, especially for tuition-dependent institutions, according to a new Fitch Ratings analysis.
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The median adjusted operating margin, which includes endowment funds for operations, fell to -2.0% in fiscal 2024 for the 56 private nonprofit colleges in Fitch’s portfolio. Despite the median margin sitting squarely in negative territory, the highest-rated colleges still enjoyed positive operating margins.
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Fitch analysts expect the credit environment for the U.S. higher education sector to deteriorate in 2025 year over year, with federal policy shifts likely to increase pressure on operations and revenue.
