Moody’s issued a negative outlook for higher education in 2026, citing enrollment pressures, rising costs and political headwinds tied to federal policy changes. The ratings firm highlighted demographic declines in high school graduates, proposed Grad PLUS rollbacks and a shrinking revenue base, estimating sector revenue growth slowing to around 3.5% next year. Those macro concerns come as Pew and others document state-level reductions to university budgets: at least 15 states proposed or enacted cuts this year, forcing tuition increases, hiring freezes, deferred maintenance and program eliminations. Institutions with heavy master’s and professional-degree portfolios are particularly vulnerable to changes in Grad PLUS rules and private loan access. Finance and academic leaders should update liquidity stress tests, scenario plans for enrollment declines, and short-term contingency budgets while boards consider strategic responses to sustained downward pressure on operating margins.