Moody’s Investors Service projected a negative outlook for the higher education sector, citing federal policy risks, rising costs, regulatory changes and lost grant funding as key drivers. The rating agency expects pressure on operating margins and potential rating downgrades for some institutions as grant flows shift and federal support is restructured. Campus CFOs and trustees should anticipate closer scrutiny from bond markets, more conservative enrollment and revenue forecasts, and demands for strengthened liquidity and contingency planning. Moody’s call underscores how federal policy shifts—particularly around the Department of Education’s restructuring—translate rapidly into credit concerns for colleges and universities.