On March 31, 2015, the U.S. Department of Education released a list of almost 560 higher education institutions subject to financial restrictions. Known as “heightened cash monitoring,” these restrictions are applied to colleges for a number of reasons, from submitting financial documents late to being of questionable financial viability.
The existence of this list was originally denied, but after Inside Higher Ed pursued the issue, its existence came to light, and, eventually, the list was made public. According to Under Secretary Ted Mitchell, the release is about transparency and is good for the public and the government. The twenty-one institutions under the highest level of scrutiny have not been revealed, as investigations are still under way, and the Department of Education does not want to risk contaminating evidence by alerting the public to those investigations.
Mitchell stresses that being on the list should not be considered a red light. Students and parents should not immediately see this as a reason not to attend or consider attending a school, but as a warning that they should do additional research into the institution. Forbes warns that this information could exacerbate problems for struggling colleges, as it could lead to reduced enrollment and, therefore, more financial problems.
Over half the institutions on the list are for-profit colleges: 290 of the 487 schools on the lower level on monitoring and 29 of the 69 schools in the higher level.
The schools can appear on the list for a variety of reasons, including high default rates, severe audit findings, and, perhaps most importantly, accreditation problems.
Being on the heightened cash monitoring list can delay federal funding to schools, as the Department of Education wants to ensure that schools have the “financial and administrative capacity” to receive federal support. They haven’t been entirely clear about what that means or how they use the sanctions.