The backdrop Higher education, which accounts for 6% ($30 billion) of the U.S. insurance industry’s municipal bond holdings,1 is among the capital market sectors acutely impacted by social distancing. While historically a relatively stable and well-performing sector (Chart 1), it was facing its share of longer-term headwinds even before COVID-19. Now, colleges and universities are dealing with a set of circumstances that is wreaking immediate havoc on students and administrators alike. Will the credit profile of U.S. colleges and universities be permanently damaged, or will COVID-19 simply be another mile marker in the evolution of the higher education sector?
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