In the fall of 2010, Penn State University was a favorite destination for corporate recruiters. One year later, the fall of 2011, many seniors at the institution are worried that their degree will haunt them in their job search.

“People who’ve heard of Penn State throughout the scandal have already formed some sort of negative opinion of us,” says senior Joe Martin, who graduates in May. Martin will graduate with a degree in kinesiology. Kinesiology students work closely with the school’s athletic department, which is at the heart of the child sex abuse scandal that has rocked the school.

Students are not the only ones worried about life after graduation, as Damon Sims, the student affairs vice president, has met with recruiters in Washington, D.C., Philadelphia and New York. Sims and his delegation of deans are trying to emphasize the reputation of the school academically. According to USA Today, a Wall Street Journal study was released last year that surveyed 500 recruiters. Those recruiters said that Penn State was the best school to find qualified graduates at across the country.

Head football coach Joe Paterno was relieved of his duties earlier in the football season for not notifying the proper authorities of the abuse taking place by his former defensive coordinator Jerry Sandusky. Criminal proceedings got underway earlier this month, which has made it difficult for students to ignore.

“Images of Penn State students rioting in favor of Joe Paterno are now etched in the minds of millions,” says Craig Meister, an independent admissions consultant in Stevenson, Md. Meister had eight students who applied to Penn State before the scandal went public. Since then, seven of those eight students have withdrawn their applications to the university. “So far, nothing about this is not coloring their attitudes in some way. Students and parents I work with are particularly concerned about students’ chances of getting a job after graduation or during school breaks.”

Another problem arising out of the scandal for the university involves its credit rating. The school has $1 billion in debt and has a credit rating of Aa1, the second highest rating possible. The managing director for Moody’s, John Nelson, had the following to say about the school’s rating:

“Any negative reputational problem that crops up for a university catches our attention. … What is unusual in this case is that it rose to the level of involving senior university managers, and we place a great deal of weight on that.”

Of particular concern to investors:

A spokesman for the school, Bill Mahon, says that at the end of November, applications to the school were up by 4 percent compared to this time last year. Mahon also said that interest from international and out of state students was also high.

“I haven’t heard anything as far as friends losing jobs or internships over it, and I don’t think it will be a problem,” says senior Brett Davis, an aerospace engineering major. “We have good ties with a lot of programs, so I don’t think that will change.”