Loyola suffered a cash flow loss of $1.1 million during mid-2005, according to credit bureau Standard and Poor. Mid-2006, that loss rose to $14.5 million. Now, according to 2007 numbers, this debt has almost been completely eliminated, and credit bureaus like S&P are looking favorably on the university.

S&P attributes the new stability to “a restructuring plan that called for program revisions and decreased faculty positions.”

S&P revised Loyola’s revenue bond rating in January 2008, and now the university’s interest rates will be lower when they borrow money.

However, “there are no plans to bring back the discontinued programs,” said Walter Harris, provost and vice president for academic affairs.

Harris pointed out that the university’s finances are stable, but with a smaller fund-base. He also mentioned that the federal government assisted Loyola with hurricane relief funds in the past, but according to Doug Dougherty, Loyola financial affairs portfolio manager, “We stood on our own without insurance by July 2007.”

Major factors of the debt were decreased enrollment and damage costs. Loyola reduced its cash flow loss to $399,000 a year – a small number for universities this size, according to the S&P report.

“Our deficit would’ve been considerably higher if we’d left these programs,” Dougherty said. “We’re on strong financial ground now, and we can concentrate on getting enrollment back up.”

The new bond rating comes with the expectation that enrollment will increase during the next two years. Enrollment levels dropped steadily each year after Katrina, but that may change in fall 2008. Freshmen applications are up for the first time since the storm, according to the report.

Joshua Stern, a credit analyst at S&P, said enrollment at Loyola is “the big unknown right now.”

The university is currently searching for a vice president for Enrollment Management to not only encourage more students to come to Loyola – but also motivate them to stay.

Dougherty said Loyola was fortunate to raise its bond rating as quickly as it did because “most universities got that downgrade.”

But Loyola was “responsible about borrowing money pre-Katrina,” he said and, as a result, is now benefiting from that.

Katie Urbaszewski can be reached at [email protected].