Louisiana's flagship university seems to be starting the process of filing for academic bankruptcy.

According to NOLA.com, Louisiana State University (LSU) and other public colleges in the state could soon file for financial exigency because of slowed state funding. The filing means the school cannot guarantee its own financial recovery.

"We don't say that to scare people," F. King Alexander, president and chancellor of LSU, told NOLA.com. "Basically, it is how we are going to survive."

If the school files for exigency, their ability to recruit faculty and students will take a huge hit. Less funding would not mean LSU and the other schools would lose money themselves, but would have to pay more than usual for projects like new buildings and other campus additions.

One precursor for the possible exigency filing was the Louisiana Legislature heading toward the end of the week without reaching a solution to higher education funding. If the meetings conclude in the same state they are in now, the schools stand to lose 82 percent of the funding they had been receiving.

Another indicator was a report from the Moody's Investors Service, which downgraded LSU's credit outlook from positive to stable.

"The stable outlook reflects expectations of relatively consistent cash flow performance, even as revenue experiences pressure," the report stated. "The outlook also incorporates expectations of moderate manageable future borrowing plans and solid debt service coverage from pledged revenue."

On a student-by-student level at LSU, NOLA.com noted, the state would pay $660 per undergraduate next year, whereas the state paid $3,500 this past year. Alexander pointed out the projection is lower even than what most states spend for community colleges," Sandra Woodley, president of the University of Louisiana system, told NOLA.com. "We are certainly anxious to see the budget solution as quickly as possible. Faculty decisions and hires need to be made now for next fall."