University of Maine System’s credit rating affirmed, outlook upgraded

University of Maine campus shot showing building and a flag

File photo / University of Maine The University of Maine System has its flagship campus in Orono.

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A credit rating agency has upgraded the University of Maine System’s credit rating to AA- and revised its outlook from "negative" to "stable" for the first time since 2021.

The strong rating enables the system to borrow at favorable rates to finance modernization of the physical plants, which the ratings report found are burdened by $1.8 billion in deferred maintenance due to age and underinvestment.

S&P Global Ratings had recently downgraded the outlook for the nation’s higher education sector as a whole, but has now lauded the University of Maine system’s student recruitment and retention efforts, as well as internal collaborations and cost containment.

The university’s research programs were also recognized.

The state’s largest educational system has recently been navigating unprecedented uncertainty about its future external funding, especially from the federal government, according to Chancellor Dannel Malloy.

“S&P’s rating and improved outlook recognize the University of Maine System’s disciplined financial stewardship on behalf of Maine taxpayers and our strategies to stabilize enrollment and promote pathways to careers and upward mobility for our students,” said Malloy.

“We remain committed to ensuring that their investments lead to even greater opportunities and outcomes for Maine’s people and economy," he added.

S&P noted the system has defied “unfavorable” state and regional demographics and, despite strong regional competition and significant capital needs, is delivering stable enrollment by maintaining tuition affordability, according to a statement from the university.

S&P cited the growth of online learning led by the University of Maine at Presque Isle’s YourPace degree programs, as well as the system’s research performance and productivity.

The ratings and outlook also reflect S&P’s favorable view of the system’s “importance to the future success of the state,” increased state funding and the $320 million investment in student success and innovation from the Harold Alfond Foundation.