The three major credit rating agencies issued dour forecasts for higher education in 2026, citing mounting operating pressures, demographic headwinds and policy uncertainty. Fitch called the outlook 'deteriorating,' Moody’s warned of an 'increasingly difficult' operating environment, and S&P flagged heightened uncertainty for nonprofit institutions. Those warnings arrived as the sector closed out 2025 with widespread workforce reductions: December job cuts pushed the annual tally to roughly 9,000 positions across the year. Institutions cited falling enrollments, lower international student counts, and federal policy shifts as drivers of program eliminations and administrative layoffs. Ratings agencies’ negative guidance raises borrowing costs and limits capital options for campuses, tightening a feedback loop where fiscal stress leads to cuts that can further depress enrollment and reputation. Trustees and CFOs will need strategic plans for liquidity, enrollment recovery, and prioritized capital spending to avoid further downgrades.