Standard & Poor's Ratings Services on Thursday cut the credit rating for Rowan University, Glassboro, N.J., by a notch, to A from A+, citing "weakened financial performance" and "a significant increase in debt" as the school expands its college and medical schools, according to a report by S&P analyst Ken Rodgers.

"We were expecting this," Rowan spokesman Joe Cardona told me. Rowan is working to expand total enrollment to 25,000 by 2023, from the current 15,000, and growth is costly, Cardona said. While Rodgers wrote that New Jersey taxpayer fund "about a third of revenue," Cardona said total state aid for all of Rowan this year is $89 million, about 20% of Rowan's $450 million yearly budget. Since Moody's Investors Service has cut New Jersey's state credit rating to the second-lowest of U.S. states (only Illinois is worse), analysts worry state college subsidies will get cut, too.

Also Thursday, Moody's Investors Service analyst Diane F. Viacava told clients that Moody's might also cut Rowan's credit rating, from its current A2, because the school needs to "grow operating cash flow through growing tuition revenues and expense control" as it prepares to open a 1,400-bed student housing complex next year.

Rowan also faces "operating challenges" from its acquisition of the osteopathic former University of Medicine and Dentistry of New Jersey in Stratford, as Rowan also starts up the competing allopathic Cooper Medical School in Camden, amid doubt around future state funding levels.

To fuel new buildings, Rowan has borrowed from a string of public entities, including the Camden County Improvement Authority, the New Jersey Educational Facilities Authority, plus this year an A-rated $36 million new bond issue and $78 million refunding issue through the Gloucester County Improvement Authority. S&P says the county authority sale brings Rowan's total bond debt to $686.5 million.