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Fitch downgrades Xavier University over deficits and weak undergrad demand
Analysts pointed to worse-than-expected fiscal 2026 financials and a projected budget shortfall for the current fiscal year.
Published Sept. 17, 2026
Ben Unglesbee
Senior Reporter
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Xavier University's campus in Cincinnati, Ohio.
The image by EEJCC is licensed under CC BY-SA 4.0
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Dive Brief:
Fitch Ratings downgraded Xavier University’s credit rating this week , with analysts citing “weaker-than-expected preliminary fiscal 2026 operating performance and a budgeted deficit in fiscal 2027.”
Fitch knocked the private Ohio institution’s rating from A- to BBB+, indicating slightly higher but still relatively low default risk.
At the same time, the analysts pointed to first-year enrollment growth this fall and improvements in student retention but said “undergraduate demand metrics remain very weak.”
Dive Insight:
Fitch analysts see increased operational risk at Xavier, pointing to “persistent deficits” and declining cash flow margins. They estimated those margins at under 5% despite projected revenue increases at the private university in the coming years.
Driving the pressure on the university are past enrollment declines. Last fall, Xavier’s incoming first-year cohort fell short of 700 students, marking a roughly 20% decline from the prior year and one of the university’s smallest classes in recent history.
Xavier’s student body has shrunk over the longer term as well. Between 2019 and 2024, its fall headcount dropped 21.1% to 5,501 students.
By the numbers
$5.1 million
Xavier’s total operating loss in fiscal 2025.
4,358
The university’s full-time equivalent students for fall 2026, down from 4,580 last year, according to Fitch, which noted that Xavier is still paying for a big drop in first-year students in fall 2025.
$500 million
The target for a fundraising campaign that Xavier launched last September, which nearly doubled the goal of its previous campaign.
But since then, the university has seen some positive enrollment signs. Its incoming first-year class this fall rose by about one-third, to 920 students, according to Fitch. Still, Xavier is still challenged by that smaller class last fall, with full-time equivalent enrollment down by 222 students from last year, the analysts noted.
The university’s financial performance in fiscal 2026 was “particularly off-target,” the analysts said without sharing figures. But they noted that Xavier faced some short-term costs related to an “unplanned transition” in operations management software.
The university did not immediately respond Thursday to a request for comment about the downgrade.
The Fitch team also pointed to several financial strengths at Xavier, including fundraising, investment income, money from its athletics program and the ability to fund capital spending with gifts instead of internal cash or debt.
Analysts also pointed to “academic and enrollment overhauls” underway to help grow enrollment. Part of that is the addition of new programs to Xavier’s portfolio, including in neuroscience, cybersecurity and health science . The university said that new degrees have driven enrollment growth, with 8% of first-year students declaring majors that Xavier introduced within the last two years.
The university is also building out a new college of osteopathic medicine, whose development is on budget and on time and expected to add “significant” revenue starting in fiscal 2028, according to Fitch.
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