U.S. to Identify Colleges Under Scrutiny

The Education Department plans to release list of colleges whose federal aid is restricted because of concerns they pose risks to students and taxpayers. In recent years most on list have been for-profit colleges. 

March 30, 2015

WASHINGTON -- The U.S. Department of Education plans to name the colleges whose access to federal money it has restricted because of concerns about the risk they pose to students and taxpayers. And most of the institutions placed on those financial sanctions in recent years have been for-profit colleges, newly disclosed federal records show.

Officials will release the list of colleges currently subject to extra scrutiny known as heightened cash monitoring at some point next week, according to Dorie Nolt, the department’s press secretary.

The department on Friday sent a message to colleges on the cash monitoring list, notifying them of the forthcoming release.

“We have determined that the designation of institutions as being on heightened cash monitoring (I or II) is a matter of public interest,” the department said in the message, which was obtained by Inside Higher Ed. “Therefore, we will be releasing a list of institutions that were under those designations as of March 1, 2015, early next week.”

The decision to release the information comes after Inside Higher Ed reported on Thursday that the department was keeping secret the list of colleges that concerned regulators to the point they had curtailed access to federal funding at those institutions.

A department spokeswoman said last week that officials had been considering releasing the list.

Partial, redacted records released by the department on Friday under the Freedom of Information Act show that most of the colleges on heightened cash monitoring in recent years have been for-profit institutions.

The department provided a spreadsheet of 74 colleges that were on cash monitoring at some point between October 2011 and February 2014. The document was originally compiled for Government Accountability Office analysts who were examining the integrity of accreditation decisions.  

Of the 36 colleges facing the most stringent restrictions during that time, 30 were for-profit institutions and the others were private, nonprofit colleges.

Department regulators may place a college on heightened cash monitoring for a variety of reasons relating to the risk the institutions pose to students and taxpayers.

Colleges that fail the department’s financial responsibility test, for instance, are typically placed on the lower level of heightened cash monitoring. In other cases, department regulators may impose cash monitoring after they identify a problem at a college or find that it hasn’t been following the proper rules for doling out federal loans and grants.

The most frequently cited reason for colleges on the highest level of scrutiny on the partial list released Friday was “accreditation problems.” For the lower level of scrutiny, colleges were most commonly cited for a lack of “financial responsibility.”

According to the most recent information provided by the department, 76 colleges or universities were subject to the most stringent form of cash monitoring at the end of last October. Another 455 institutions, as of last August, faced a lower level of scrutiny.


Back to Top