LSU drafting 'academic bankruptcy' plan in response to state budget crisis

The Times-Picayune reports:

LSU and many other public colleges in Louisiana might be forced to file for financial exigency, essentially academic bankruptcy, if state higher education funding doesn't soon take a turn for the better.

Louisiana's flagship university began putting together the paperwork for declaring financial exigency this week when the Legislature appeared to make little progress on finding a state budget solution, according to F. King Alexander, president and chancellor of LSU.

"We don't say that to scare people," he said. "Basically, it is how we are going to survive."

Moody's Investors Service also announced this month that it was lowering LSU's credit outlook from positive to stable based on concerns about the university's overall financial support. The lowering of LSU's credit rating makes it more likely the university will have to pay more for its building projects in the future.

The bubble in higher education has burst.