Credit-rating firm Moody’s issued a negative outlook for U.S. higher education in fiscal 2026, citing enrollment declines, rising costs and policy headwinds from federal changes. Analysts singled out the phaseout of the Grad PLUS program, caps on graduate borrowing, and demographic declines in high school graduates as primary risks to revenue and margins. A companion analysis highlights community colleges, which face unique exposure: workforce-connected programs that link to federal CTE and Perkins funding are being reshaped by administrative moves, and community colleges worry about the transfer of programs from Education to Labor. Moody’s expects revenue growth to slow and institutions with large master’s portfolios or thin margins to be most vulnerable. Finance officers should prepare for tighter liquidity tests and stress scenarios; trustees should expect tougher capital allocation debates and heightened regulatory scrutiny.