Moody’s downgrades Rider University’s junk bond rating

Moody’s Investors Service has downgraded Rider University’s revenue bonds to Ba2 from Ba1. The bonds were issued through the New Jersey Educational Facilities Authority. The rating is an indicator for potential investors that investing in Rider could be risky because the school may be unable to cover its debts.

Rider University recorded about $89 million of outstanding debt for the 2020 fiscal year. Debt rose to about $110 million with the school’s issuance of bonds in May 2021.

In addition to increased debt, the private university in Lawrence is facing declining enrollment, falling tuition, and declining auxiliary revenue.

“The rating downgrade to Ba2 from Ba1 reflects Rider University’s continued very weak operating performance, reliance on a line of credit, and recent increase in leverage, largely for working capital needs,” reads the Moody’s analyst’s negative rating outlook rationale.

“The university’s student demand and pricing power remain challenged, reflected in enrollment declines, lagging growth in net tuition per student, and an 8% decrease in net tuition revenue over the fiscal 2016-20 period. A significant decline in room and board revenue will result in fiscal 2021 deficits in line with fiscal 2020 despite federal relief aid funding and some expense reductions measures,” reads the Moody’s report. “While the university has articulated strategies to improve operations, a turnaround, if achievable, will take multiple years. In the interim, the university will fund deficits from proceeds of its recent Series 2021 bonds (not rated) and may also need to access reserves and lines of credit depending on the duration and magnitude of deficits. Deficit operations and strategic investments have already led to a 16% decline in monthly liquidity over the past five years. Rider’s recent issuance of Series 2021B bonds (not rated) elevates leverage risk with a bullet due in fiscal 2031.”

Rider University Spokeswoman Kristine Brown told the publication Inside Higher Ed that the landscape of higher education is changing rapidly, and that the global pandemic has exacerbated the existing challenges institutions like Rider have been facing, while also creating unforeseen new ones. Rider lost about $27 million in room and board and auxiliary revenue over the past two fiscal years and spent $2 million in COVID-19 related costs in 2020, she told the publication.

Rider enrolled 4,205 full-time equivalent students in the fall of 2020, had revenues of $131 million in the 2020 fiscal year, and a mortgage on its main campus in Lawrenceville, which has an appraised value of over $230 million, according to Moody’s.

The Moody’s report notes that school officials are committed to improving Rider’s financial performance in the face of softened revenue growth prospects, but that the university faces constraints, including a less flexible labor environment and litigation surrounding the sale of the Westminster Choir College property in Princeton.

The school would need to increase its enrollment, net tuition, auxiliary revenue, operating margins, and cash and investments to improve its position.

In February, Rider announced it was lowering its base undergraduate tuition from $45,120 to $35,000 for new students beginning in fall 2021. Brown said at the time that the change in tuition price does not mean lower net costs for students. “The initiative changes Rider’s high tuition, high discount pricing model, which creates a significant hurdle for students and families who believe the sticker price immediately puts a Rider education financially out of reach,” Brown said in a written statement at the time.


  1. Rider had a world -renowned music school that was making money. The president of Rider, a man with one of the how-to ph.d degrees that are driving out real scholarship has put his marble all in sports—not football that really pays (look at the size of Roders football stadium compared to its basketball arena). There was far greater hope for monetary survival in world-class music than in baseball (I love baseball). Part of the problems lies in this scalars scam that has emerged for administrators in lower higher-education. Something is wrong when the President of Ryder makes right around one-million dollars and the President of Princeton University make about $350,000. Also, Ryder has destroyed Westminster but is going to continue to use its name to solicit students. This is fraud. Ryder should not be allowed to use the Westminster name. Even more ridiculous is a new, glossy course—be Leonard Bernstein in your spare time—that allows you to study Choral Conducting on the Internet. That like learning to be a major-league spit ball pitcher by studying bean-shooting through a straw online. Stop this disgrace.

  2. The Rider University president and board must own the poor management and the financial decline of Rider, of course being mindful of the effect of the pandemic on higher education around the country. Westminster Choir College was fully enrolled and doing well sustaining its international renown and respect. That is, until the new president decided to eviscerate it and then to try to sell the campus as a way to pay Rider’s debt. This effort went so far as to nearly culminate in a deal with a Chinese steel company (claiming to be an educational organization) with ties to the Chinese government in Beijing. Just imagine the national security threat that would pose—to say nothing of the fact that they didn’t promise to maintain WCC as a college of music.

    Yes, Rider did make it financially possible for Westminster Choir College to continue in the early 1990s. This was urgently needed and immensely appreciated; furthermore, the addition of WCC to Rider College allowed Rider to claim the designation of “university.” And Westminster Choir College was promised a continuance and future on the Princeton campus, making the choice of partnering with Rider clear and smart. (I know this because my father was a member of Westminster’s board at the time.) With nearly a century of extraordinary music-making, education, and performance around the world with the great conductors of the twentieth and twenty-first centuries, Westminster Choir College came with the potential to be the crown jewel of Rider.

    Yet Rider has chosen to decimate WCC, moving classes to the Lawrenceville campus where resources are insufficient or lacking for teaching, learning (including the substantial library), rehearsing, practicing, and performing. With the decision by Rider to significantly reduce the size of the WCC faculty, staff, and student body, there are not enough students to sustain the remarkable, unique tradition of performing often with major orchestras and in major festivals.

    The Westminster Choir College faculty who remain are extremely skilled, creative, experienced, persevering, and dedicated. They deserve much better, too. The same is for the current students.

    So what now?

    I believe the best decision would be to revive Westminster Choir College on its beautiful, purpose-built campus in Princeton, spend whatever is needed to attract a full roster of excellent faculty and staff, and spend the time and effort to attract a full student body of super-talented, smart students.Reclaim the renown that has been Westminster’s, and perhaps partner with another university or college that would support WCC’s achievements and goals with respect and pride—in Princeton. Perhaps expand the core offerings in instrumental music and liberal arts and sciences. Then sell the Lawrenceville campus to fund this revival.

    1. Hello Karen
      Great piece:
      What Rider has done to Westminster is a crime. Unfortunately, we live in a country that advances crime. Westminster was doing well. This guy whose only credentials in music is that he apparently served, as all such apparatchiks do, on the Board of trustees of some place with a reputation like the Pittsburgh Symphony. My idea is still to wrest that school from the clutches of the underworld (can you believe he is making almost $1,000,000 for doing whatever it is these organizers of the people who actually do the work do). I would like to get George Soros or someone like him with money to underwrite what Pierre Boulez did in Paris. Keep Westminster as a degree granting institution but turn it into two further special things: 1) an institute for advanced musical study in the voice and 2) make a specialized institution for composers primarily known for vocal/choral music, e.g. Palestrina, Machaut, Zoltan Kodaly, whoever they all are. When similar people tore down Penn station in New York, the Times wrote” we are a civilization that will be remembered for not what we build but what we tear down. Thomas Mann said: “Where you go to school is only window dressing as long as the study is deep.” I think Rider started out as a school—and I remember it—as a business school whose strong suite was shorthsnd. It is now out to prove that it can go downhill from there. We must stop this somehow. It’s like tearing down the Temple to All the Gods in Rome. And who ever heard of teaching choral conducting by correspondence course?

  3. One is supposed to say in situations such as this that I hate to monopolize the platform, meaning that I have written about Rider LLC before. However, in this case, I want to monopolize the platform for a variety of I believe worthy reasons. The kind of thing that is going on at Rider University (and we might note here that Rider would not even be a university were it not for Westminster Choir College because, at the time Rider became such, It was necessary that the state pass on its academic worthiness, which was limited because it did not have an acceptable School of the Arts. Then the Republican governor decided schools could self-nominate as Universities and the whole tangle became moot.

    As far as I am in a position to make judgments, Rider is outstanding (in a purely technical way; forget obligations to mankind) in Business and outstanding in various sciences. From there, it trickles down to the belief that a musical scale is a machine invented by Luciano Pavarotti for determining the weight of notes produced by singers of competing weights, range, and nationalities. I say right at the start of this my sotto voce American jeremiad that Rider has so little justification for being in the music business that its use of Westminster as a name is an out and out fraud. It is a sad fact that whereas it would be difficult to cajole someone into having their treasured offspring enroll in a course in brain surgery in a clinic in a strip mall, the same is not true of music. Because everyone (and I use the term advisedly) thinks they know and understand music, they are easy objects for a hustle. I could in 8 hours teach a complete novice enough profoundly resonating music terminology to allow them to set themselves up in business in said strip mall giving “music lessons” and thereby make a modest income.

    There used to be a guy on PBS who hustled that noble institution into having them present him as some great expert on learning the piano by stargazing or something. I tried to contact the head of the NJPBS about the circumstance that what he was doing could permanently injure a young person’s hands so that he would never play the piano and found that this public servant, the head of the PBS, did not see “ordinary viewers” and surrounded himself with bodyguards when he left his Newark office.
    What Rider now has is little more than the name of a once world-renowned music school that it is using, like a man who decided he was going to start a circus, but needed the name Barnum. He convinced the owners of the name that it would be in their best interest to sell him the name, which naively they did. Then he acquired an elephant and a dancing dog and advertised his show as THE GREATEST SHOW ON EARTH. The difference is that the Barnum show had to provide its own tent. The Rider show, from the beginning, had its eye on a luxurious Real-Estate grab.

    Interested not in music or elephants or balletic dogs but real estate, our man, will call him the Red Ryder (in remembrance of his abortive attempt to sell the Westminster Campus to the Beijing Chinese Communist Party for the handsome sum of some $50,000,000, a nice return on an investment of some flowery words about the future of Westminster and a bonus of some $8,000,000 in the form of the Choir College’s modest endowment.

    Talking of modesty, Rider soon found that musicians tend to be a naïve bunch and so they were easily duped. Musicians (most) tend to trust people. This is a mistake. This is like a lamb negotiating a contract for a buffet with an alligator. Westminster was in some difficult times. I, personally, advised them that if they took an across-the-board 20% pay cut for three years, the direction of things would change. World renowned musical institutions always have their ups and downs. I told them at the time there were so many more attractive possibilities than attaching themselves to a former Shorthand tutelage. Yale was interested. I’ll skip that fiasco.

    Ms. Nielsen has some excellent ideas. Westminster can better capitalize on its international reputation by doing what Pierre Boulez did in Paris and use its reputation to form itself into an world institute for the study of advanced musical ideas, focusing on Vocal and Choral Studies. It’s a disgrace that the school – and while I’m at it, let me take a shot at Princeton, the municipality and the University, which will get plenty of attention in my forthcoming book SURVIVING THE BEST OF ALL POSSIBLE WORLDS. Princeton has a smug sense of superiority in the arts . Thereunto in keeping, it could’ve done much more both when Rider was preying on Westminster like a undernourished vampire and even now that Westminster stands on the precipice of complete annihilation, its only hope lies with those who claim spiritual cognizance of the arts – I repeat, it is a disgrace to standby as Rider eviscerates what remains of the spiritual wreckage of Westminster Choir College while scamming new students into believing they are getting a Westminster education when in fact all they’re getting is a name, a name being used, like the elephant input of the imaginary Westminster, opps, check that, I mean circus, to raise money for a baseball team. Being one who loved baseball as a child I have nothing against it. But it is not music, pace Plato.

    I want to mention two last things: 1) higher education in the United States is suffering from a fatal cancer that it will be improved by emulating the structure of large corporations like, for example, and no derogatory implications intended, the Bank of America. The remuneration of college presidents in imitation of the CEOs of large corporations is completely out of hand. These people have no special talent or ability. The president of the institution in question, with the ironic name rendered in English from the Italian meaning “For the good of man“ knows, to my knowledge, and please use this venue to enlighten me if I err, about music other than he served upon the board of trustees for the Pittsburgh Symphony. Having read his professional resume for the other aspects of his job, I am not euphoric. Why? Why? Why? Should this man be paid $1 million, plus living accommodations, to drive a world renowned musical institution into the ground and apparently follow it up with a well-regarded Business School that was doing pretty well without him, and be rewarded $1,000,000 for doing it while the president of Princeton University is doing an excellent job for a real university at a modest salary of about $350,000. When I was of college age, Rider was regarded as a mediocre place and is now a poorly run university. It couldn’t remain content being a college. But universities are different from colleges. It’s not a matter of just having a more impressive robe to wear at graduation.

    2) I am running a monthly deficit of over $400. I live on SS. I’m thinking seriously of suing Rider for money, mental suffering, deceit, oh, and I forgot to mention, I had to get a lawyer to stop the Westminster President—also making big bucks—from using things I wrote and publishing them as his own. I can publicly say, and will defend it anywhere, that nothing he wrote he wrote without undue help. Personally, I was offered high-paying jobs and turned some of them down.Why? Because William James led me astray. He said “the purpose of [teaching in a college] is to recognize a good person when you meet one.” And I wanted to be close to Princeton University. I saw Princeton as a land where the streets were paved with the gold of intellectual fraternitas (In case you majored in classics at Princeton that means fraternity in English). Princeton was not such a place. In fact, I have rarely been treated at a university with greater arrogance than Princeton. But that’s not the point here. Why should I have to continue in poverty while Rider University, let me correct that, university, will rake in millions from selling the grounds, the physical facilities, of the institution that some of us literally gave away our professional and in some cases personal (and psychological) lives to cause to continue because it wasn’t that we didn’t love money but that we loved integrity more. In testimony before the Congressional Select Committee on the Events of Jan. 6, officer Fenone I believe is his name, decried protecting the bigwigs for what? A stab in the front. With an aluminum flagpole still flying the flag. You get done to you what Rider University is doing to the Westminster students. It is a DISGRACE

    Not wanting to end on a depressive note and to show there are no hard feelings, our circus man might want to know that since the RINGLING BROTHERS AND BARNUM AND BAILEY CIRCUS fell on hard times, its famous antique, world-renowned circus train might be bought for a song. Another real-Estate killing. And I know just the place to get the song.

    [The above opinions are solely those of the author]

Comments are closed.