Moody’s Investor Service, a firm that determines risk factors for people investing in bonds, reported the drop in May.

Donald Wilson, vice chancellor for financial affairs and board treasurer, said a drop of a large magnitude in the bond rating would mean a higher interest rate for borrowing money, but SIU’s drop is small and will have only a minor affect.

Buyers for our bonds are sophisticated and understand our bond is in good financial standing, Wilson said. If we paid seven percent interest while rated at A1, we may pay something like seven and one tenths interest while rated at A.

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SIU Chancellor Ted Sanders said the drop in the rating could be compared to getting an A in a class instead of an A.

The effect of the drop is not significant and will have no immediate impact on the University in regards to its vitality and the cost of doing business, Sanders said.

Sanders said reasons for the drop in the bond rating range from state requirements on scoring sick leave for all University employees, the graduation rate of students within a six year period and a declining enrollment.

Some of the causes are beyond our control, Sanders said. We have to score sick leave for all employees of the University even though most employees never take all of their sick leave.

Sanders said because SIU’s six year student completion rate does not look as good as other schools in Illinois and the country, it may have had a negative effect on the bond rating.

We need to help first year students adapt to the rigors of academic life, Sanders said. We need to put helping students at the top of the list.

Sanders said the drop in the rating is a wake-up call for the University and problems need to be addressed, but it is not a four alarm fire bell.

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It is not disgraceful to have this drop, Sanders said. SIU still has a very good rating, just not the best.

Sanders said offering a new way of learning, as through the technology infrastructure proposal, the bond rating could improve.

The technology infrastructure proposal advocates building a fiber optic network on campus which would make the Internet available to SIUC students in every building on campus and including the dorms.

The infrastructure proposal would also be responsible for renovating buildings on campus in order to receive the fiber optic network.

Building the infrastructure might help the bond rating by offering new ways of learning, Sanders said.

Ben Shepherd, vice president for academic affairs and provost, said he agrees with Sanders saying that the technology infrastructure may have a positive effect on SIU’s bond rating.

If and when we have a complete infrastructure, we will be able to fully exploit and incorporate that technology into our teaching and research.

Teaching and research will be greatly enhanced and will obviously contribute to the improved quality of those issues, Shepherd said.