Training Champions for Christ since 1971

SPECIAL REPORT on LIBERTY UNIVERSITY2

SPECIAL REPORT on LIBERTY UNIVERSITY 3

Founded in 1971 with 154 students, Liberty University is now the largest college in Virginia. The publicly stated ambitions of Liberty University from its founding days have included the highest standards of excellence in a wide diversity of academic disciplines, world-class facilities, and participation in the upper levels of NCAA

Division I athletics.

Liberty was established as Lynchburg Baptist College and while it initially offered a limited number of academic programs with an emphasis on religious and theological training, the scope of its educational offerings was widely expanded in its first decades of existence. Today, the university offers 389 programs of study, and

only about 20 percent of its students major in religion. Liberty has grown into a comprehensive liberal arts university with a national profile and a global base of alumni numbering more than 200,000.

In the last decade, Liberty has seen many of its founding goals realized at a much faster pace than originally anticipated. Liberty’s enrollment, financial resources, and academic reputation have reached levels that rival

those of much more mature institutions of higher education. The university fields 20 NCAA Division I athletic teams and 32 distinct club sport teams and offers a comprehensive intramural program. The combined student

participation rate in these sports programs exceeds 30 percent of the undergraduate resident enrollment.

AcademicsThrough its 15 colleges and schools, Liberty offers 389 programs of study, with 249 of those programs offered residentially. First accredited in 1980 by the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC), Liberty is now a Level VI institution. Its Fifth-Year Interim SACSCOC Report was fully accepted with “no recommendations,” and in 2012, SACS displayed Liberty’s report at its annual meeting as a model of best practices for other institutions to emulate.

Liberty has become one of fewer than 10 institutions of higher learning nationally that provide all of the following: an ABA-accredited law school, an ABET-accredited engineering and computational sciences program, an AOA-COCA-accredited medical

college, and an FAA-certified aviation program. Liberty also features a cinematic arts school and the largest nursing program in the state of Virginia. (Accreditation for Liberty’s College of Osteopathic Medicine is provisional, as the college does not begin operation until Fall 2014.)

Liberty University is a “teaching college,” and while the education of students is the first priority, the university is beginning to add research functions, particularly in the College of Osteopathic Medicine. Many of the university’s most widely published and nationally recognized scholars often teach a full load of courses, and Liberty maintains a student-to-faculty ratio that ensures professors are available and accessible to students.


Residential CampusLiberty’s developed campus covers more than 700 acres. Adjacent to campus, the university owns nearly 6,300 acres of mountainous land that has been preserved in its natural state. The developed campus includes more than 5 million square feet of building space and the undeveloped campus features over 50 miles of scenic hiking, biking, and running trails, along with several lakes ranging in size from two acres to 110 acres and many other recreational opportunities.

Liberty attracts an ethnically diverse student body to its Lynchburg, Va., campus from all 50 states and more than 75 countries. Of Liberty’s nearly 13,000 residential students, one quarter represent an ethnic minority or a foreign nationality. The International Students Office is dedicated to the success of Liberty students from outside the U.S., while the Center for Global Engagement seeks to foster global awareness and engagement between Liberty University students and the world. The Center for Multicultural Enrichment promotes diversity and offers unique opportunities for cultural expression.

The Liberty University campus is home to a vibrant community always bustling with activity. Over 7,000 students live in traditional dormitories and in university-owned apartments on campus and over 24,000 meals are served daily at 17 campus food service venues.

Students are engaged in the local community, providing approximately 650,000 hours of community service per year.

A new 170,000-square-foot library, as well as 215 classrooms and laboratories, support the daily academic activity on campus. An astronomical

observatory, a 640-seat theater for the performing arts, several museums, a low-power TV station, and two radio stations serve academic programs, student life, and the local community.

The university’s 200,000-square-foot student union includes seven basketball/volleyball courts, an aquatics center, two indoor soccer fields, a full cardio/aerobics room, an 8,000-square-foot weight room, a climbing wall, several fitness rooms, and a 40,000-square-foot student center complete with a food court.

Liberty University also offers an indoor skate park, 3-D archery range, paintball fields, motocross track, equestrian center, community garden, indoor tennis and racquetball facility, and disc golf course. Liberty University is the only school in the country to field ice hockey teams in all five American Collegiate Hockey Association (ACHA) divisions. The teams compete at Liberty’s 2,700-seat ice rink in an atmosphere energized by an enthusiastic and loyal fan base. Liberty is also home to the Liberty Mountain Snowflex Centre, featuring year-round outdoor ski and snowboard slopes for beginner, intermediate, and advanced skiers and boarders. The facility is the only one of its kind in North America and one of only a few dozen in the world. Olympic athletes from across the nation as well as Liberty’s own snowboard team practice and compete at Snowflex.

Several vehicular and pedestrian bridges and tunnels provide internal access on campus as well as to the local community. Liberty’s campus includes over 16,000 parking spaces and is well-served by a popular bus transit system.


Multiple Delivery Formats

Current Investments in Residential Programs

The university is investing heavily in the residential infrastructure, recently completing a state-of-the-art library to serve as the academic hub of campus. Other academic structures now under construction include the Center for Medical and Health Sciences (home to the College of Osteopathic Medicine), the Center for Music and the Worship Arts (home to the School of Music), and the Science Hall.

New high-rise dormitories and athletic facilities are also now under construction, along with campus beautification projects and technological infrastructure improvements. Construction on a 1,400-space parking deck, a 1,000-seat softball stadium, and a 68,000-square-foot addition to the student union are underway.

Liberty University has created a unique blend of residential and online education, offering multiple delivery formats to meet each student’s learning style and time management needs. In addition to the traditional M-W-F and T-Th classes, students can take online courses, intensives, and night classes. These options are especially beneficial to students enrolled in a resident graduate program. Liberty has been a pioneer of distance education and online learning, making higher education affordable and accessible to adult students who are unable to leave their careers or relocate their families for a traditional on-campus experience.

At Liberty, these educational delivery methods

are mutually beneficial. Liberty’s global online program, pioneered three decades ago and now setting standards nationally for online education, meets accreditation requirements that ensure its comparability with Liberty’s traditional resident programs. The scale and efficiency of the online programs generate surplus revenues, allowing the university to keep its tuition low, to invest heavily in programs and facilities for the residential program, and to invest in the success of its students through financial aid. The online program likewise benefits from the longstanding tradition, prestige, and commitment to academic excellence that the residential program has established over the decades.

While Liberty’s student enrollment has increased significantly in recent years, the university has managed its growth responsibly so that its capital infrastructure and academic support systems have been more than

adequate to serve the growing student population. Liberty has balanced the investment of its surplus revenue and financial resources between the creation of financial reserves for the future and a combination of reduced cost of

attendance, capital improvements, and academic, athletic, and student life programs.


A c a d e m i c O v e r v i e w


Programs of Study

• Center for Academic Support & Advising Services

• College of Arts & Sciences

• College of General Studies

• Liberty University Baptist Theological Seminary

• Liberty University College of Osteopathic Medicine

• Liberty University School of Law

• School of Aeronautics

• School of Business

• School of Communication & Creative Arts

• School of Education

• School of Engineering & Computational Sciences

• School of Government

• School of Health Sciences

• School of Music

• School of Religion

AccreditationsLiberty University is regionally accredited by the Southern Association of Colleges and Schools Commission on Colleges. In addition, Liberty offers many programs that are accredited or otherwise recognized by specialized professional and accrediting agencies: CAATE (athletic training), NCATE (education), ABET (engineering), CAAHEP (exercise science), CCNE (nursing), ACBSP (business), ABA (law), and provisional accreditation from AOA-COCA for the College of Osteopathic Medicine.

Below is a list of the 15 colleges and schools within Liberty University. The majority of residential students are enrolled in programs related to business, nursing, psychology, education, religion, biology, communication, and criminal justice.


Faculty

Institutions From Which Liberty Faculty Have Graduated

More than 70 percent of the Liberty University faculty hold terminal degrees, almost half hold full-time appointments, and 70 percent of classes are taught by full-time professors.

The student-to-faculty ratio is 19:1. Nearly half of the classes taught at Liberty include fewer than 20 students, and only 16 percent include more than 50. Online course sections have a maximum of 25 students participating.


Liberty graduates are sought out by employers because of the work ethic, positive attitude, knowledge, and practical skills developed during their time at Liberty. Liberty alumni have also developed an outstanding reputation for service to others through charities, missions, and relief organizations. This is the true measure that any university is fulfilling its educational and spiritual mission.

Student Success

Financial Aid

Liberty University academic student groups have enjoyed great success in recent years.

More than 89 percent of Liberty University students receive financial aid. In 2012-13, $1 billion in total aid was disbursed, $170 million of which was institutional assistance provided by Liberty.

Liberty’s three-year* student loan default rate is about half the national average and is a key indicator that Liberty’s graduates are securing jobs and finding stability in post-college life. The chart below reflects the most current available data.

• The debate team has claimed five consecutive national titles in the American Debate Association (ADA) and the Cross

Examination Debate Association (CEDA), defeating schools such as Vanderbilt, George Mason, and Harvard.

• Since 1995, Liberty Debate has captured 33 national titles and remains the only school ever to sweep first place rankings

in all three major competitions.

• The Quiz Bowl team has captured seven out of the past nine Big South Championships and finished third at NAQT

Regionals in 2012, defeating schools such as Duke, the University of Maryland, and the University of Virginia. In 2013,

Liberty received its first invitation to NAQT Nationals.

• In 2012, the National Intercollegiate Flying Association (NIFA) team won its eighth straight regional tournament.

• The moot court team has captured national titles every year from 2006 to the present.

• In 2013, the forensics team won a national championship in its division.

STUDENT LOAN DEFAULT RATE LIBERTY UNIVERSITYALL INSTITUTIONSFOR PROFIT

*Percentages displayed arebased on three-year increments.

13.4%22.7%

ALL INSTITUTIONS

FOR PROFIT

LIBERTY

7.1%

7.4%

14.7%21.8%

ALL INSTITUTIONS

FOR PROFIT

LIBERTY

Percentage of students who have defaulted on Federal Loans


Admission and GraduationThe average entrance scores and GPA of incoming students have trended upward for the last 10 years. The current averages are as follows:• GPA: 3.35 on a 4.00 scale

• ACT: 23 (Composite)

• SAT: 1029 (Critical Reading and Math)

Fall 2013 honors students numbered 645, representing 10 countries and 44 states. This number will increase to 700 students in the Honors Program in Fall 2014.• Fall 2013 honors applicants had an average SAT score of 1373 (Critical Reading and Math) and an ACT composite score

of 32; of these, 47 percent were accepted.

• Among those accepted were 60 National Merit Finalists, 1 National Merit Semi-Finalist, and 65 National Merit

Commended Scholars.

Other indicators of success include the following:• Course completion rates of 90 percent for undergraduates

• Retention rates of 82 percent for first-time, full-time freshmen

• For students who stay more than one semester at Liberty and earn a GPA of at least 2.0 (the GPA required to avoid

academic caution), the six-year graduation rate is 68 percent.

• Students in fields with licensure exams also perform remarkably well:

• Education: Title II examination pass rate of 98 percent or higher since 2005

• Nursing: NCLEX exam pass rate of 95 percent in 2012

Future Enrollment and Program PlanningLiberty University is projecting that its resident enrollment will grow 2-3 percent annually between 2014 and 2020, increasing its resident population from approximately 12,750 in Fall 2014 to just over 16,000 in 2020. New academic buildings and dormitories are either under construction or in the planning stages to accommodate this growth.

A substantial portion of this projected enrollment growth will come in the new College of Osteopathic Medicine and many new health-related programs, including the Master of Science in Biomedical Sciences and a degree in occupational therapy.

Two-thirds of the Southside region of Virginia near Liberty’s campus is designated as medically underserved, and the population’s age is above average.

With 375 physicians per year lost to retirement, the need for physicians and other trained health workers is intensifying. By the end of the fifth full year of the establishment of Liberty’s new health programs, the university anticipates graduating more than 4,200 students trained to help meet the health care needs of nearby Southside Virginia.

Other programs that are part of Liberty’s academic planning for the future include:• Doctor of Nursing Practice

• Bachelor of Science in Mechanical Engineering

• Master of Science in Cyber Security

• Doctor of Worship Studies

• Bachelor of Fine Arts

• Master of Fine Arts


S t u d e n t - At h l e t e P r o f i l e


Liberty University student-athletes may choose from more than 140 academically rigorous residential undergraduate programs. The top majors of Liberty student-athletes (in order by number enrolled)

are as follows:

1. Business Administration

2. Exercise Science

3. Sport Management

4. Digital Media & Creative Arts

5. Secondary Education

6. Biology & Chemistry

7. Health Promotion

7. Nursing

8. Elementary Education

8. Psychology

9. Engineering & Computational Science

10. Criminal Justice

Initial EligibilityThe 2013-14 incoming recruiting class boasts the following cumulative average statistics. All 135 student-athletes were identified as qualifiers through the NCAA Eligibility Center:

Core Course16GPA:3.41SAT:1010 ACT:89

T O T A L


Women’s Field Hockey, Women’s Swimming, Baseball, Softball, Men’s Basketball, Women’s Basketball, Volleyball, Men’s Soccer, Women’s Lacrosse, Women’s Tennis, Women’s Cross Country, Women’s Indoor Track & Field, Women’s Outdoor Track & FieldFootball, Men’s Golf, Men’s Tennis, Men’s Cross Country, Men’s Indoor Track & Field, Men’s Outdoor Track & Field

16 CORE COURSE AVERAGE CUMULATIVE GPA

1000 POINT ANNUAL TEAM APR SCORES

Academic Progress Rate (APR)Over the last four years, the Liberty University Athletics program has met or exceeded the NCAA standards as defined by the APR initiative. The number of teams earning a perfect 1000 point annual team score are shown in the following graph:

10

5

02009-2010

NC

AA

TEA

MS

2010-2011 2011-2012 2012-2013

Each of Liberty University’s 20 NCAA DI teams has a 16 core course average cumulative GPA of 3.0 or greater, with the majority of teams presenting an even higher demonstration of academic preparedness.


2012-13 APR SCORE DISTRIBUTION

Overall Cumulative Average GPAThe cumulative, overall average GPA representing the whole of Liberty University’s more than 500 student-athletes has stayed above 3.0 and has been trending upward for five consecutive years.

Through the last four years, at least 13 of the 20 NCAA teams have averaged a 3.0 or higher GPA.

930-974 APR

975-999 APR

2012-13 APR

FOR ALL TEAMSAverage 987

For the 2012-13 academic year, 80 percent of Liberty’s teams scored higher than 975, with nine receiving a perfect score of 1000 and none scoring below the 930 threshold.


Academic HonorsLiberty University student-athletes are recognized nationally and within the Big South Conference for their high academic achievement.

In 2012-13, the FCS Athletics Directors Association Scholar Athlete of the Year award went to a Liberty student-athlete. Liberty student-athletes have been recognized in each of the last three years with the Capital One/CoSIDA Academic All-America award.

Within the Big South Conference, the highest honor bestowed on student athletes for academic excellence is the Christenberry Award. Liberty University student-athletes have captured this award for two out of the last three years.

Over the past two years, more than 50 percent of Liberty University student-athletes have been named to the Big South Presidential Honor Roll, earning cumulative GPAs above 3.0.

In Fall 2013, 162 student-athletes qualified for acceptance in the Honors Program.

86

101214

420

2010-2011

NC

AA

TEA

MS

Academic Year

2011-2012 2012-2013 2013-2014

MAJOR NATIONAL ACADEMIC AWARDS

4

11 11 12


Commitment to Student-Athlete Support and ProfessionalEducation for Staff

Liberty University’s student-athlete development reaches far beyond the classroom, as Academic Affairs for Athletics partners with a number of university constituents to provide opportunities for student-athletes to participate in a variety of seminars, workshops, and conferences that will prepare them for life after Liberty. Furthermore, opportunities for giving back to the community abound, and Liberty student-athletes join in with great enthusiasm, helping in both organized pre-planned events, as well as impromptu chances to serve. Last year, they logged

a combined 7,130 hours of community service.

In 2013, 100 percent of Liberty University student-athletes slated to graduate did so, evidence that the NCAA’s standards of initial eligibility, APR, and commitment to student support are resulting in completion and successful post-undergraduate careers.

A survey of Liberty’s Class of 2013 student-athletes reveals that all are moving forward — either advancing their careers or continuing their education.

ALL 2013 LIBERTY STUDENT-ATHLETE GRADUATES

PROFESSIONALATHLETES

IN GRADSCHOOL

WORKINGFULL TIME


The commitment to professional excellence and support exists not only for student-athletes, but for the department staff as well.

In 2011, Liberty University became the 13th school to earn the National Association of Academic Advisors (N4A) Program certification. By obtaining this certification, Liberty has demonstrated that its academic support unit has the knowledge, practices, and procedures in place to assist student-athletes toward their goal of graduation. With this third-party endorsement, stakeholders are assured that the support program for student-athletes is run effectively. Additionally, many Liberty University staff members have earned N4A individual certification.

The following institutions have earned N4A Program certification:

• Arizona State University

• Baylor University

• Clemson University

• Fairfield University

• Georgia State University

• Grand Valley State University

• Liberty University

• Louisiana State University

• Marist College

• Michigan State University

• North Carolina State University

• Tennessee State University

• University of Alabama at Birmingham

• University of Arizona

• University of Central Florida

• University of Colorado

• University of Dayton

• University of Louisiana at Monroe

• University of Maryland Baltimore County

• University of Memphis

• University of Mississippi

• University of Missouri

• University of Nebraska

• University of North Carolina Charlotte

• University of Oklahoma

• University of South Carolina

• University of Tennessee

• University of Tennessee at Chattanooga

• Virginia Commonwealth University


At h l e t i c s O p e r at i o ns


NCAA Division I Sports Programs

Liberty University currently offers 20 NCAA Division I athletics programs. Over the past few years, Liberty added three NCAA women’s teams to meet and maintain Prong 1 of Title IX compliance with the Office of Civil Rights.

Baseball

Men’s Basketball

Men’s Cross Country

Football

Men’s Golf

Men’s Indoor Track & Field

Men’s Outdoor Track & Field

Men’s Soccer

Men’s Tennis

Women’s Basketball

Women’s Cross Country

Women’s Soccer

Softball

Women’s Indoor Track & Field

Women’s Outdoor Track & Field

Volleyball

Women’s Tennis

Women’s Field Hockey

Women’s Lacrosse

Women’s Swimming

Division I Facilities

All 20 Liberty University NCAA athletics teams compete at facilities on Liberty University’s campus.

These facilities are all wired for HD broadcast (see next section on the Liberty Flames Sports Network). They have been built or renovated over the last few years in preparation for hosting conference and NCAA championships.

The 19,200-seat Williams Stadium was named one of the nation’s best Football Championship Subdivision facilities.

Other noteworthy athletic facilities:• Vines Center (basketball, volleyball): Seating capacity of 8,000

• Liberty Baseball Stadium: Seating capacity of 2,500

• Osborne Stadium (soccer, track & field): Seating capacity of 1,000

• Liberty Softball Stadium (to be completed Aug. 2014): Seating capacity of 1,000

LocationLiberty University is centrally located in Lynchburg, Va., in the foothills of the Blue Ridge Mountains, within a day’s drive of two-thirds of the U.S. population. Named one of the 100 Best Adventure Towns in the U.S. by “National Geographic Adventure,” Lynchburg is only 3.5 hours from Washington, D.C. and Virginia Beach.


Accommodations

The Lynchburg Regional Airport is approximately 2 miles from the Liberty University campus and has a 7,800-foot runway capable of handling up to a 737-800 (approximately 170-180 passengers). Regional carrier service is provided by US Airways Express through Charlotte, N.C. The airport has met all FAA requirements for private charter flights in and out of the airport.

There are 14 hotels, either open or under construction, within 1.5 miles of the campus, including SpringHill Suites, Holiday Inn Express, Best Western, Sleep Inn, Super 8, Courtyard by Marriott, Kirkley Hotel & Conference Center, Wingate by Wyndham, Hilton Garden Inn, Hampton Inn, Comfort Inn & Suites, Microtel, Extended Stay America, and La Quinta. Two of these are full-service (Hilton Garden Inn and

Kirkley) and two more full-service options (Holiday Inn Select and Craddock Terry Hotel) are a short drive from campus.

The Hilton Garden Inn is less than six years old and features five state-of-the-art meeting rooms and on-site catering for groups wishing to stay within a mile of campus. Liberty is surrounded by 21 casual and upscale restaurants and 13 fast food restaurants within 1.5 miles of campus.

For fans and families visiting the Liberty University campus and surrounding community, there are abundant historical and recreational activities. Celebrating athletic events through tailgating is encouraged and takes place in designated areas both on and off campus.


Within 1.5 miles of campus:· 21 casual and upscale restaurants

· 13 fast food restaurants

· 14 hotels (2 full-service)


Liberty Flames Sports Network

Currently, 85 million homes across the U.S. and other parts of the world now have a front-row seat to a variety of Liberty University athletics events, through the Liberty Flames Sports Network (LFSN) — the university’s TV and radio network.

By the Fall 2014, LFSN will be available in over 120 million homes, bringing live coverage of Liberty Athletics to a diverse network of national and regional platforms, including DirecTV, Dish Network, Verizon, Fios, AT&T U-Verse, and ESPN channels.

ESPN3 has approached Liberty and asked to carry all of LFSN’s programming next year. The Mid-Atlantic Sports Network also carries select broadcasts.

LFSN is staffed by a team of highly trained industry professionals who have experience working for some of the nation’s largest sports networks, including ESPN, ABC, CBS, NBC, NASCAR, Comcast, and Fox Sports. LFSN also recently launched a 30-minute daily program, “Game On!” which features national college sports talk and highlights. The program is aired at different times throughout the day, predominantly between 4-7 p.m., on a variety of stations and networks.

To ensure that all broadcasts are of the highest quality, Liberty is completing a campus-wide conversion to full high definition. In addition to state-of-the-art HD cameras, the university also has a remote HD production truck for live event coverage and a new Media Production Center.

An ESPN 3 representative recently stated regarding Liberty University:

“We absolutely have every intention of carrying Liberty Sports events on ESPN3, FULL COURT &

GamePlan next season. The quality of your productions passes our standards, so we are happy to

carry as many events as possible.”

On the set of “Game On!” – a daily program of the Liberty Flames Sports Network.

F i n a n c i a l s


Liberty University remains committed to the goals that were established at its founding that pertain to the support and overall success of its NCAA athletic teams.

However, Liberty’s first priority, as evidenced by recent investment in residential academic infrastructure, is to provide a superior academic experience that equips graduates with the knowledge and the values needed to live not only a productive and prosperous life, but also a life of service to others.

Liberty’s financial standing has received the attention of financial services companies, who have written about the university’s growth and stability.

Liberty marked its initial public bond offering (IPO) when it issued $120 million worth of tax-exempt education facilities bonds in December 2010, receiving a superior AA credit rating from Standard & Poor’s. That credit rating placed Liberty in a group of 78 universities with the highest credit ratings in the nation.

In January 2012, Liberty announced its second IPO, this time in the corporate bond market selling $100 million of taxable bonds. Moody’s Investors Service upgraded those taxable bonds to an Aa3 rating in 2013, placing the school among the 71 top-rated universities in the nation by Moody’s.

The latest report says the upgrade “reflects Liberty’s remarkable momentum in revenue growth and cash flow from operations. This momentum, if continued, will produce sufficient cash to fund transformative capital investments as well as to build reserves over time.”

Moody’s cited Liberty’s milestone in reaching $1 billion in net assets in fiscal year 2013. Liberty is the first evangelical Christian university and one of the youngest American universities ever to reach this mark. “The growth in revenue and cash and investments makes Liberty a true outlier in Moody’s portfolio of not-for-profit universities,” the report reads.

The report also recognized Liberty’s strength in growing its enrollment, “supported by an extensive array of online programs with full-time equivalent enrollment of over 50,000 making it one of the largest private universities in the U.S.” The brand strength of its online program, it adds, “is built on the university’s Christian identity, lower cost, and residential campus experience including intercollegiate athletics.”

For more information, see the Moody’s Investor’s Service Rating Update that follows.

Rating Update: Moody's upgrades Liberty University's (VA) bonds to Aa3;outlook stable

Global Credit Research - 09 Sep 2013

$99M of rated debt affected

LIBERTY UNIVERSITY, VAPrivate Colleges & UniversitiesVA

Opinion

NEW YORK, September 09, 2013 --Moody's Investors Service has upgraded to Aa3 from A1 the rating on LibertyUniversity's Series 2012 taxable bonds with $99 million outstanding. The upgrade reflects Liberty's remarkablemomentum in revenue growth and cash flow from operations. This momentum, if continued, will produce sufficientcash to fund transformative capital investments as well as to build reserves over time. The growth in revenue andcash and investments makes Liberty a true outlier in Moody's portfolio of not-for-profit universities. Between FY2008 and FY 2012, operating revenue grew 630%, while total cash and investments increased 148%--more thantwice the growth of any other rated university on either measure. The rating outlook is stable.

SUMMARY RATING RATIONALE

The upgrade and Aa3 rating reflects the increasing scope of the University's activity (up 14% to $728 million basedon draft information for fiscal 2013), its large pool of financial reserves ($728 million of total financial resources inFY 2012), uncommonly strong operating performance, and discipline around building and maintaining reserves.Cash and investments increased $295 million in fiscal 2013, surpassing the $1 billion mark based on draft reports.

The university's strongly religious character is both a strength and a challenge as it has successfully attracted agrowing portion of those students seeking this type of experience but will limit appeal to a broader audience.Additional credit challenges include limited revenue diversity with 89% reliance on student charges based on draftfiscal 2013 data, modest fundraising, and limited pricing power with net tuition per student of $10,346 and brandidentity built partially around affordability.

STRENGTHS

*Liberty benefits from a large and growing student market supported by an extensive array of online programs withfull-time equivalent (FTE) enrollment of over 50,000 making it one of the largest private universities in the US.Brand strength is built on the university's Christian identity, lower cost, and residential campus experienceincluding intercollegiate athletics.

*Liberty exhibits uncommonly strong operating performance with a three-year average operating margin of 36%through fiscal 2012. The University retains flexibility in its expense base by utilizing full-time and adjunct faculty foronline courses for scalability and only offering tenured positions to Law School faculty.

*The university has an ongoing trend of dramatic balance sheet growth from retained surpluses that continued inFY 2013 with a 41% increase in cash and investments. Preliminary results show total cash and investments over$1 billion as of June 30, 2013. Financial reserves are predominantly liquid and free from restrictions with $461million of funds unrestricted and able to be liquidated within a month at FYE 2012.

*Prospects for sustained strength in online enrollment growth are good given institutional prowess, academic coststructure, and economies of scale.

CHALLENGES

*The university has limited revenue diversity, with student charges comprising 91% of FY 2012 revenues. TheUniversity's explosive enrollment growth, diversity of academic programs, and relatively low cost help mitigate therisks of concentrated revenues.

*The university has ongoing capital investment needs for residential program with $329 million of pending projectsthrough 2017 dependant on meeting growth targets. Future investments are likely to be funded from operatingcash flow.

*With distinct political interests and religious activities of the campus community, Liberty University has facedchallenges in the past to its tax-exempt status.

*Given the limited number of and relatively young age of alumni base, fundraising has remained modest averaging$12 million per year or $220 per student in fiscal 2012.

*Governance and management structure and practices are evolving but decision-making remains relativelyconcentrated with the Chancellor/President and Liberty has less institutionalization of best practices than moreestablished universities. Governance practices require the board to ascribe to a Liberty University DoctrinalPosition, which strengthens the institutional culture but limits diversity of opinion.

RECENT DEVELOPMENTS/RESULTS

Based on preliminary, unaudited results for fiscal year 2013 Liberty achieved another remarkable year of revenuegrowth (up 13.7% to $728 million) as it continues to attract new online students and slowly build core residentialprograms. Management guidance for fall 2013 shows ongoing momentum in most market segments.

Despite its low net tuition per student ($10,346 in fiscal 2012), Liberty's low and scalable cost structure hasallowed it to respond to market demand and produce very strong operating cash flow margins. Based on draftfiscal 2013 information, the cash flow margin of 35.3% was in line with prior years.

With cash flow from operations averaging $243 million per year in fiscal years 2011 through 2013 combined withlimited debt service, the university has been able to both fund an aggressive capital program and build workingreserves. The capital spending ratio has been over 5.0 times since fiscal 2008, as compared to a median of 1.4times for the sector. Cash flow has also supported growth of total cash and investments, crossing the $1 billionmark in fiscal 2013, more than doubling from $475 million as of June 30, 2011.

PROGRAM EXPANSION: Liberty is planning to increase its role in providing health education. With over $20million of capital support from the Tobacco Indemnification Commission, the university is starting a College ofOsteopathic Medicine with an inaugural class in the fall of 2014. The program has received provisionalaccreditation from the American Osteopathic Association Commission on Osteopathic College Accreditation aswell as its regional accrediting agency, the Southern Association of College and Schools. Management'sprojections show the new program will be self-sustaining after the third year of operation.

INVESTMENT MANAGEMENT: Given the growth of Liberty's cash and investments, the university hasincreasing focused on managing its reserves. Since 2012 the board has developed and approved an InvestmentPolicy Statement and has established guidance on maintaining a defensive level of reserves to guard againstpotential revenue declines.

The university has outsourced its chief investment officer function to Permanens Capital, a portfolio managementfirm in New York that has developed a custom asset allocation for Liberty in keeping with the new policy. Theuniversity's investment committee has seven members, four of whom are university employees including thePresident and Executive Vice President and one is the Chief Investment Officer at Permanens Capital theportfolio, again pointing to somewhat concentrated decision making power. The overall posture of the allocation asof June 30, 2013 was more defensive than most private universities, with just 13% of equity assets, 76% fixedincome and similar assets and 11% real assets/natural resources which may limit growth in reserves frominvestment returns.

OUTLOOK

The stable outlook reflects expectations of continued student market strength, extraordinary cash flow supportinggrowth of flexible reserves as well as the bulk of funding for capital investments. The outlook also reflectsexpectations of slow improvement in revenue diversity and absence of plans for additional debt.

WHAT COULD MAKE THE RATING GO UP

An upgrade could be supported by the continuation of recent trends including continued student market strengthand resource growth, combined with limited additional debt. While the young university has made significantimprovements in its governance and management over the last several years, a future rating upgrade would be

dependent on continued evolution and institutionalization of best practices. Recent improvements include long-range operating and capital planning, defining the proper amount of flexible reserves to maintain andimplementation of an Investment Policy Statement.

WHAT COULD MAKE THE RATING GO DOWN

Downward pressure could follow a decline in balance sheet strength, marked increased in operating leverage,material deterioration in operating performance, leadership disruption, dislocation of residential or online studentmarket segments, or loss in tax-exempt status.

KEY INDICATORS (FY 2012 financial data, fall 2012 enrollment data)

Full-Time Equivalent Enrollment: 56,325 students

Primary Selectivity: 24.6%

Primary Matriculation: 47.9%

Net Tuition per Student: $10,346

Educational Expenses per Student: $7,338

Average Gifts per Student: $220

Total Cash and Investments: $728 million

Total Direct Debt: $228 million

Comprehensive Debt*: $234 million

Expendable Financial Resources to Direct Debt: 2.45 times

Expendable Financial Resources to Operations: 1.34 times

Monthly Days Cash on Hand: 449 days

Monthly Liquidity to Demand Debt: 16,795%

Operating Revenue: $640 million

Operating Cash Flow Margin: 38.2%

Three-Year Average Debt Service Coverage: 27.8 times

Reliance on Tuition and Auxiliaries Revenue (% of Moody's Adjusted Operating Revenue): 90.6%

* Comprehensive Debt includes direct debt, operating leases, and pension obligation, if applicable.

RATED DEBT:

Taxable Bonds, Series 2012: Aa3

PRINCIPAL RATING METHODOLOGY

The principal methodology used in this rating was U.S. Not-for-Profit Private and Public Higher Educationpublished in August 2011. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatorydisclosures in relation to each rating of a subsequently issued bond or note of the same series or category/classof debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordancewith Moody's rating practices. For ratings issued on a support provider, this announcement provides certainregulatory disclosures in relation to the rating action on the support provider and in relation to each particular ratingaction for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings,

this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and inrelation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case wherethe transaction structure and terms have not changed prior to the assignment of the definitive rating in a mannerthat would have affected the rating. For further information please see the ratings tab on the issuer/entity page forthe respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related ratingoutlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legalentity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures foreach credit rating.

Analysts

Dennis M. GephardtLead AnalystPublic Finance GroupMoody's Investors Service

Edith BehrAdditional ContactPublic Finance GroupMoody's Investors Service

Contacts

Journalists: (212) 553-0376 Research Clients: (212) 553-1653

Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 USA

© 2013 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rightsreserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES AREMOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDITCOMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCHPUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'SCURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS,OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT ANENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANYESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANYOTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICEVOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARENOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S

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