Two bond ratings agencies have downgraded the credit rating of Agnes Scott College, considering the school a higher credit risk due to tepid enrollment and rising costs.

Standard & Poor’s and Fitch Ratings have downgraded the bond rating from AA to AA-, based on several factors. The liberal arts women’s college encompasses 100 acres in Decatur and has recently begun a push to expand enrollment to 1,100 students by 2020, a project known as Summit.

That project is part of what caused the ratings agencies to reassess the college’s rating.

“The downgrade reflects our opinion of the decline in enrollment for fall 2014, and the risk of implementation for the college’s new Summit program,” Standard & Poor’s credit analyst Bianca Gaytan-Burrell told Bondbuyer.com.

The credit analyst said that the college spends its endowment funds at a rate of 5.9 percent, which is “not sustainable.”

In a statement, Agnes Scott said that the new ranking is “disappointing but not unexpected, given the overall negative outlook on higher education, especially not-for-profit colleges, among the rating agencies.”

Recently, one of Agnes Scott’s sister schools, Sweet Briar College in central Virginia, announced it is closing its doors due to financial difficulties. In response, Agnes Scott began offering Sweet Briar students “Sisterhood Scholarships” worth up to $21,000 per year.

Agnes Scott told potential transfers that the college’s outlook remains bright.

President Elizabeth Kiss said, “Because I anticipate that Sweet Briar’s decision may prompt questions about the strength and sustainability of other women’s colleges, I want to share with you that Agnes Scott is going strong – and pursuing a bold and innovative plan to become even stronger by reinventing a women’s liberal arts college education for the 21st century.”

The college’s statement offered a similar upbeat response to the latest news about its bond rating.

“Agnes Scott’s new rating remains in the top quarter within the higher education sector and is the same as such institutions as Carnegie Mellon, Mount Holyoke, Reed and Vassar and higher than Sewanee, Kenyon, Rhodes, and Georgetown University,” the statement from Agnes Scott says. “While other institutions have seen declining enrollment, Agnes Scott’s enrollment has held steady and has even witnessed some record-breaking classes in recent years. The endowment has grown by 18 percent since 2009, and the college has raised more than $92 million dollars toward a $100 million dollar goal in its current fundraising campaign due to conclude at the end of 2016.”

The report from Fitch, published on Businesswire.com, offers a much more detailed look at the college’s financial picture. It says Agnes Scott is looking to sell about $38 million in bonds this month. It says the college currently has $62.7 million in outstanding revenue bonds issued by the state Private Colleges and Universities Authority.

Fitch says the college’s current enrollment of 873 students “remains short of the approximately 1,100 students management estimates are needed to achieve and maintain balanced operations over time.”

Fitch called the school’s plan to increase enrollment to 1,100 students by 2020 “aggressive.”

“Fitch believes the strategy could help distinguish the college from peers and improve its competitive positioning over time,” the rating service says. “However, the notable programmatic shift entails significant upfront costs and a high degree of execution risk in light of the college’s small size and niche market. Fitch will look to fall 2016 demand and enrollment trends as an early indicator of the strategy’s effectiveness. Stability at the current rating level will require progress toward sustainable operations through enrollment growth.”

The College says the ratings agencies both agree that the Summit project is a strategy that could reverse the current trend of high endowment spending and low enrollment.

“Summit is the result of a recent market research study conducted for the college and is intended to increase enrollment and overall revenue,” the statement from the college says. “Reports from both ratings agencies acknowledged that Summit is a promising strategy to improve the college’s financial outlook if executed successfully.”

Correction: An earlier version of this story contained incorrect information about the status of Sweet Briar College. This story has been updated with the correct information.