Thanks in part to President Ted Carter’s “Five-Point Plan” to reimagine the University of Nebraska during a period of budgetary challenges, the NU System has again earned high marks for fiscal management in a new report issued by one of the nation’s leading credit ratings agencies.
S&P Global recently affirmed the university’s AA bond rating, the second-highest score possible, putting Nebraska among the top 8 percent of public higher education institutions in the country. The rating means the university has strong capacity to pay its bills and debt obligations and ensures that NU can continue borrowing money at low interest rates, saving students and Nebraska taxpayers money.
In its report, S&P Global cited the Five-Point Plan unveiled by Carter in June as a key factor in its decision to affirm the university’s strong bond rating. Carter’s plan – with goals to recruit more Nebraska students, raise the university’s academic and research profile, regain admission into the prestigious Association of American Universities, and identify additional operational efficiencies – aims to address short- and long-term resource challenges facing the University of Nebraska at a time of significant change for all of higher education.
“In our view, this is an example of the university managing in a proactive manner to sustain its long-term financial strength,” S&P wrote.
S&P’s report also highlights the Board of Regents and administration’s conservative budgeting and capital planning practices, NU’s strong fundraising capabilities, historically stable support from the state, and its status as Nebraska’s only public research university system as positive factors.
Carter said the strong score shows the University of Nebraska has been a proactive and responsible steward of its resources as it, like many institutions around the country, manages an unprecedented combination of inflation, muted revenue growth, and enrollment and demographic challenges.
“We built our Five-Point Plan to not only weather the challenges ahead of us, but to reimagine ourselves into a more competitive, dynamic University of Nebraska for the future,” Carter said. “Ultimately, our plan is all about accountability to students and the people of Nebraska. We’ll have to make tough decisions to make sure we’re allocating our resources in ways that create the greatest possible return for Nebraskans, but we are confident in our path forward. It’s gratifying to see our approach affirmed by the best in the business.”
Board of Regents Chairman Tim Clare of Lincoln said: “As a longtime member of the Board, I’ve seen firsthand how much thought goes into budgeting and strategic planning at the University of Nebraska. Our diligence pays off when we can say that we are viewed in such high standing by outside financial experts. We have an ambitious plan in hand to achieve an even higher level of success and rankings like this confirm that we are in a strong position to make our vision a reality.”
Regent Rob Schafer of Beatrice, vice chairman of the Board and chairman of the Business and Finance Committee, said: “Nebraskans can take pride in the conservative fiscal planning we have done to help us manage ups and downs in the economy. Fiscal discipline will be more important than ever going forward. We will continue to focus on being as effective and efficient as possible for the benefit of students, families and taxpayers.”
Carter issued his Five-Point Plan in response to a charge by the Board to build a strategy for balancing the budget while also enhancing the university’s competitiveness in enrollment, research and academics. Regents directed Carter to set system-wide priorities and invest dollars accordingly.
A thorough review of non-academic operations and a zero-based budgeting exercise to justify expenditures are key elements of Carter’s plan. The goal is to free up resources to not only close the university’s budget shortfall, but invest in priorities to help the university compete at the highest levels.