Monday, July 25, 2016

The Department of Education has 517 colleges on its"Heightened Cash Monitoring" list due to perceived risks to students and taxpayers: Is your college on the list?

The Department of Education recently released its updated list of colleges that are targeted for "heightened cash monitoring" due DOE concerns about risks these colleges pose to students or taxpayers.  The latest list names 517 colleges, slightly down from the 528 colleges that were on the list in March of 2015. Colleges on the list get more intense federal oversight than other schools.

How does a college get on this list? There are a variety of reasons, including accrediting problems, audit concerns and "financial responsibility," an umbrella term DOE uses to  cover a range of financial issues.

Not surprisingly, a majority of the colleges on the list are proprietary schools, including such esteemed institutions as Toni & Guy Hairdressing Academy and Educators of Beauty College of Cosmetology. But there were 81 public institutions on the "heightened cash monitoring" list, including regional colleges like University of North Alabama and Southwest Minnesota State University.

And DOE flagged no fewer than 40 foreign institutions for heightened cash monitoring, including Hebrew University in Jerusalem, London International Film School, and Pentecostal Theological Seminary in London.  A couple of Polish medical schools also made the list: Medical University of Gdansk and the Medical University of Silesia.

Quite a few nonprofit liberal arts colleges are on DOE's heightened cash monitoring list, including several schools with religious affiliations. It is difficult to tell how many private colleges have religious ties because a college's name may not give it away. Kuyper College in Grand Rapids, Michigan, for example, describes itself as a "minister focused Christian leadership college," but you have to go to the college's web site to find that out.

In fact, of the 32 colleges listed on the first page of DOE's print out of schools under heightened cash monitoring, 13 had some sort of religious tie or heritage, including Kentucky Wesleyan College, St. Catharine College, Eastern Nazarene College, and MacMurray College in Illinois, which was founded, according to its web site, by "devout and erudite Methodist clergymen."

Of course not all 517 colleges marked for enhanced cash monitoring will close. Most of the regional state universities on the list will probably muddle along indefinitely, propped up by state revenues.

But I think a lot of the schools on DOE's list will close. St. Catharine College is in receivership right now.

And what is the future of Shimer College in Chicago, which was recently ranked as one of the worst colleges in America and has only about 100 undergraduates? Shimer was founded in 1853 as Mount Carroll Seminary. Over time, the school evolved to become what it is today, a college that exists on two floors of a rented building and has no clubs or student societies. In 2012 it was ranked the second smallest college in America, after Alaska Bible College.

Of course, Shimer has its defenders and probably has many sterling qualities. Nevertheless, how long do you think Shimer College will last?

DOE's most recent list of colleges under "heightened cash scrutiny" should prompt us to ask several questions:

1) First, why is the federal government lending money for Americans to attend foreign colleges, including a couple of dozen foreign medical schools and several theological institutions? After all, our own country has more than 5,000 postsecondary institutions that participate in the federal student aid program, Does the government really need to finance foreign study?

2) A lot of for-profit schools are going to close in coming years.  Millions of students who attended these institutions received substandard educational experiences that did not lead to well-paying jobs.What should our government do to provide relief to the millions of people who took out loans to enroll in dodgy for-profit schools?

3) Hundreds of small liberal arts colleges are under financial stress, as evidenced by DOE's most recent "heightened cash scrutiny" list and by the escalating closure rate among these institutions. In terms of our nation's overall educational health, should we be concerned about the declining number of private liberal arts colleges, many of which are religiously affiliated?

One thing is certain. Hundreds of American postsecondary institutions, from Toni and Guy's Hairdressing Academy to Harvard, depend heavily on federal student aid money; and a great many colleges could not survive a week without regular infusions of federal funds. This has enabled colleges to hike their tuition rates and increase their annual budgets.

But the party is coming to an end. People have figured out that postsecondary education costs too much--whether it is obtained at a bottom-tier for-profit institution or an elite private liberal arts college. To fix this mess, we must do two things: We must drive down the cost of going to college, and we must provide bankruptcy relief for the millions of worthy souls who took out student loans in good faith and got very little to show for it.



Frances Wood Shimer, Courtesy of Shimer College Wiki
Francis Wood Shimer,: founder of Shimer College


References

Scott Jaschik. Slight Drop in Colleges in Heightened Cash Monitoring. Inside Higher Education, July 25, 2016. Accessible at https://www.insidehighered.com/quicktakes/2016/07/25/slight-drop-colleges-heightened-cash-monitoring?utm_source=Inside+Higher+Ed&utm_campaign=8991789a59-DNU20160725&utm_medium=email&utm_term=0_1fcbc04421-8991789a59-198564813

Ben Miller. America's Worst Colleges. Washington Monthly, September/October 2014. Accessible at http://washingtonmonthly.com/magazine/septoct-2014/americas-worst-colleges/

Jon Ronson. Shimer College; the worst school in America? The Guardian, December 6, 2014. Accessible at https://www.theguardian.com/education/2014/dec/06/shimer-college-illinois-worst-school-america

Michael Stratford, Education Department will release list of colleges found to be risking for students, taxpayers. Inside Higher Education, March 30, 2015. Accessible at https://www.insidehighered.com/news/2015/03/30/education-department-will-release-list-colleges-found-be-risky-students-taxpayers

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