Moody's, the credit rating agency, this week weighed in on a recently announced U.S. Department of Education experiment to allow federal financial aid to flow to a handful of partnerships between colleges and nontraditional providers, including skills boot camps and those that offer online courses. The experiment is "credit positive," Moody's said, and "will enhance and diversify revenue opportunities for universities, with nondegree credentials attracting new participants and supplementing traditional degree programs."
The limited availability of federal financial aid will accelerate the spread of alternative credentials, said Moody's, while also magnifying the potential upside of those credentials.