S&P revises Penn State's outlook over lawsuits
HARRISBURG, Pa. -- The ratings agency Standard & Poor's has revised Penn State University's outlook to negative from stable, citing litigation against the school over the Jerry Sandusky child molestation scandal, but affirmed its long-term bond rating.
S&P announced the change Monday, saying expenses related to the Sandusky matter also have contributed to financial uncertainty.
The university has strong financial management, diverse sources of revenue and a positive track record of financial performance, the ratings agency said. Enrollment at the main campus in State College has been stable and fundraising good.
On the downside, S&P listed a "constrained" state funding picture, limited flexibility on tuition and lower enrollment in professional programs and at some branch campuses.
A statement from the school said it remained among the 40 top-rated institutions in the country and has the same rating as the state government, AA. The university said its outlook would be reassessed within the next two years.
Sandusky, 68, was sentenced last week to a minimum 30-year sentence on 45 counts of child sexual abuse. Sandusky, who retired more than a decade ago after a long and successful career as the school's assistant football coach, was found guilty of abuse of 10 children over 15 years, including attacks inside school athletics facilities. He maintains his innocence and plans to appeal his conviction.
At least four related lawsuits have been initiated against Penn State, and eight legal teams have surfaced to say they represent more than 20 potential claimants. Penn State has expressed a hope to resolve claims out of court and recently hired a law firm with the goal of negotiating settlements by the end of the year.