Fitch Ratings has reaffirmed the ‘AA’ rating on New Jersey Educational Facilities Authority (NJEFA) revenues bonds issued on behalf of The College of New Jersey. Fitch also noted that TCNJ’s rating outlook is stable.
According to Fitch, the ‘AA’ rating reflects TCNJ’s prudent fiscal management, which has resulted in a consistent positive operating margin. In announcing the rating on Wednesday, December 14, 2011, Fitch noted that TCNJ’s leadership emphasizes long-term financial sustainability in its operational decisions, and the College regularly generates a strong surplus and adds to its improving reserve levels. Student demand remains strong, allowing TCNJ important financial flexibility. For the fall 2010 class, freshmen applications grew 7.2 percent, allowing the College to increase its incoming class nearly 11 percent to just over 1,400 students, without a notable impact on selectivity. This helped TCNJ respond to a 6 percent cut in the base state appropriation in fiscal 2011.
TCNJ planned a decrease in the size of the fall 2011 class, but it remains above historical levels at 1,371. Fall 2011 full-time equivalents (FTEs) equaled 6,779. While up only modestly from 6,727 the prior year, this was a notable increase from just two years ago (6,562). The College remains one of the more selective public institutions of higher education in the state of New Jersey, with a typical acceptance rate below 50 percent. SAT scores (25th-75th percentiles) for incoming classes typically exceed those of all other four-year public colleges in New Jersey by a significant margin.
Fitch does not expect the recently approved Campus Town public private partnership to have significant credit effects. TCNJ will lease a land parcel (adjacent to campus) to a private developer, PRC Group, for a mixed-use development. Legally, the College bears no financial responsibility for the project. However, TCNJ owns the land and Fitch expects the college to remain closely involved in the project’s development.
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