Dowling College has suffered another credit downgrade for its plummeting enrollment, high debt and unstable leadership, just one month after a new president took the helm of the private liberal arts school.
Standard & Poor's Rating Services, in a report released Friday, indicated a poor outlook for the struggling college in Suffolk County, further dropping its long-term debt rating from a B to a B-minus.
"The negative outlook reflects our view that, over the next 12 months, enrollment will likely decrease, operations may weaken further, and financial resource ratios will likely remain below category medians," S&P credit analyst Emily Avila said in a statement.
The "B" grade is assigned to an institution that is "more vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments," according to the S&P website.
The announcement comes on top of a report by Moody's Investor Services in March saying the school was "likely in or very near default" on bonds issued by the industrial development agencies of Suffolk County and the Town of Brookhaven.
Dowling, which has campuses in Oakdale and Brookhaven, has $54.9 million in debt and a $2.1 million endowment, according to the S&P report. More than 95 percent of the college's budget depends on student tuition and fees.
Undergraduate tuition, before financial aid or scholarships are considered, is about $29,000 a year, according to the school's website.
At the end of August, college trustees appointed Albert Inserra, a chairman in the school's doctoral education program, to be its new president. He is the seventh president at Dowling since 2005. Inserra is a former superintendent of both the Carle Place and Port Washington school districts.
Dowling has a current enrollment of 2,024 students -- 20 percent lower than at the start of the 2013-14 academic year and more than 50 percent lower than that of five years ago. The college has cut faculty, administrative and support staff positions in an effort to decrease costs.
"This report reflects the status of an institution in the midst of retooling," Inserra said Friday. "Our academic product is found to be outstanding and has been found to be so by independent accrediting authorities."
Dowling is accredited by the Middle States Commission on Higher Education.
In June, auditors released a report showing the school failed to meet three of 14 benchmarks, none of which had to do with the strength of the curriculum. The school was placed on warning because of its lack of stable leadership and strategic plan, and its ability to adequately assess students and the institution.
Inserra, who was chief negotiator on the most current faculty union contract, said in a separate interview this week that there were likely to be more job cuts and retirement incentives offered this year.
He said Dowling admissions officers are targeting recruiting efforts toward three major groups of prospective students: transfers from community colleges, military veterans and international students.
The school also has budgeted additional revenue of $800,000 per year for the next two years through a lease agreement that houses Stony Brook University students in dorms on Dowling's Brookhaven campus.
"These strategic changes are going to require a school year before the rating agencies see what positive effect they are having on our bottom line," Inserra said.