Business is booming at Boston University, which is borrowing $224 million in the municipal bond market next week.
Nearly 81,000 students applied to the school for the Fall 2022 first-year cohort, marking a 30% increase from 2019 before the pandemic upended college campuses.
“We’ve seen an increase in applications at some schools after the pandemic,” wrote Jessica Goldman, director at S&P Global Ratings, which raised the rating outlook on the school to positive from stable on June 6. S&P grades the college AA-, the fourth-highest available.
“Boston University is a great example of this trend; the up-tick in applications was driven by pent-up demand, as well as the lack of a testing requirement,” she continued in an email.
The surge in applications caused BU’s student body to balloon as well. The school enrolled about 17,500 full-time undergraduates in the Fall of 2022, compared to 16,635 in 2019. That compares with broad undergraduate enrollment at US colleges, which is down 7% from 2019, according to the National Student Clearinghouse Research Center’s Spring 2023 estimates.
As more schools tap the municipal market, bond analysts are getting a fuller picture of the pandemic and its aftermath. Yale University sold a $112 million issue earlier this month, and offering documents showed that undergraduate applications there rose by 36% compared to pre-pandemic. At Columbia University, which borrowed $275 million in May, applications increased 42%.
Like other prestigious universities, Boston University is becoming more selective about who it admits. The ratio of students BU has accepted compared to the number of applications has dropped to 14.4%, according to bond offering documents. In 2009, it was 58.5%.
Boston University, which has campuses in the Back Bay, Fenway, and South End neighborhoods of Boston, first made admission tests optional “early in the pandemic, when Covid-19 forced cancellation of SAT and ACT testing because of the need for social distancing,” said Colin Riley, executive director of media relations at BU in an email.
Since then, the university has extended the policy which increased the size and diversity of the applicant pool for many schools nationally, according to FairTest, an education-focused nonprofit that advocates against testing requirements. Today, 83% of US colleges have a testing-optional policy. Even so, more than 43% of applicants at BU submitted test scores, according to Riley.
International students make up 23% of the freshman class, while those from Massachusetts and New York each make up 14%, according to bond documents.
“The strong applications reflect the University’s international reputation as an urban, residential, private research university,” Riley said. “Also, BU’s residential campus re-populated in September 2020 and remained open throughout the pandemic.”
Boston University is using the proceeds of its bond deal, sold through the Massachusetts Development Finance Agency, to refinance existing debt, bond documents say.
Full-time tuition, room and board and fees at the school are $63,798 for the 2023-2024 academic year, according to bond offering documents. In 2019-2020, they were $54,720.
--With assistance from Sam Hall.