Moody’s Investors Service says that the higher education sector was recently blessed with a credit positive but that the sector will experience mixed credit conditions in the next few years.

On Nov. 1 the U.S. Department of Education announced changes that will make it easier for existing and future federal student loan borrowers to get reduced payments, according to Moody’s vice president Karen Kedem. Changes in the “Pay as You Earn” loan repayment program is “credit positive for higher education because it reduces the likelihood that a borrower will default and it has the potential to encourage borrowing, which would reduce the demand for university scholarships and help bolster tuition revenue growth,” Kedem wrote.

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