The outlook for the US higher education sector is universally grim, according to a new analysis by Moody's Investor Services.

The credit rating agency has maintained a stable outlook for research universities and a negative outlook for all other universities since 2009. But earlier this week, Moody's downgraded its outlook for all of higher education, issuing an across-the-board negative verdict.

A Moody's spokesperson cited poor revenue prospects as the reason for the negative outlook.

"The US higher education sector has hit a critical juncture in the evolution of its business model," said Eva Bogaty, assistant vice president of Moody's, in a statement. "Even market-leading universities with diversified revenue streams are facing diminished prospects for revenue growth."

Other factors include the nation's poor overall economic outlook and soaring levels of debt among struggling college graduates. According to the report:

"While employment and earnings data continue to support the underlying value of a college degree, alarm over a potential student loan bubble and diminishing affordability of higher education has reached a fever pitch in the last two year."

The report also noted that massive open online courses (MOOCs), which students everywhere can take for free, would greatly disrupt the higher education market in the future, presenting both challenges to current revenue models and opportunities for new growth.

READ FULL SOURCE ARTICLE: 01/18/2013

Editor's Note: Not only is the business model of American higher education broken, the ethical model is in tatters...Most American universities and colleges have ceased being institutions of higher learning where an advanced understanding of critical thinking skills is honed, and become ideological indoctrination mills, churning out socially advanced "paper holders" who must be re-trained by employers once hired at great expense...And don't get us started about the dysfunction of primary and secondary education in the US...