Moody’s: MOOCs a boon for university credit ratings


Moody’s said Georgia Tech could see credit benefit from its low-cost MOOC computer science degree.

Massive open online courses (MOOCs) bolster a university’s credit rating by creating new revenue avenues and international recognition, according to a report from the credit agency Moody’s.

Moody’s Investor Service, which has released at least two reports on the impact of MOOCs on a school’s credit rating, said in a June 24 report that colleges and universities that embraced the use of MOOCs could benefit financially in the long term, while schools with lesser brand name recognition could be negatively impacted by the proliferation of MOOCs in higher education.

Moody’s grabbed headlines in May when it said Georgia Tech could see significant credit rating bump after the release of the university’s low-cost MOOC computer science master’s degree program, available for about one-sixth the price of a traditional computer science degree at Georgia Tech.

Moody’s, in a September 2012 report, predicted that MOOCs’ financial incentives would partly drive the spread of MOOCs across institutions of every size, with schools that remain committed to traditional college education.

“Most universities will likely gravitate to a ‘mixed’ model that combines residential learning with the new technology, some will increasingly feature online course delivery, and some colleges may choose to create a niche by remaining focused solely on the traditional residential-classroom experience,” the report said.

Moody’s officials said in September that some colleges will be left behind as MOOCs become more prevalent in higher education.

Smaller colleges, the report said, could experience “credit stress” due to declining student demand as MOOCs become more available.

“Positive credit effects are likely to develop for the higher education sector as elite universities offer more classes for an unlimited number of students through low-cost, open courseware platforms,” said Moody’s VP-Senior Analyst Karen Kedem, author of the report. “However, there will eventually be negative effects on for-profit education companies and some smaller not-for-profit colleges that may be left out of emerging high-reputation online networks.”

“The availability of open platforms enables a university to post content without incurring the cost of developing and maintaining the infrastructure,” said Moody’s VP-Senior Analyst Karen Kedem, who authored of the September report.

Sign up for our newsletter

Newsletter: Innovations in K12 Education
By submitting your information, you agree to our Terms & Conditions and Privacy Policy.

Oops! We could not locate your form.

Sign up for our newsletter

Newsletter: Innovations in K12 Education
By submitting your information, you agree to our Terms & Conditions and Privacy Policy.