Fed List Of Colleges Being Monitored Has For-Profit Colleges Terrified
The Department of Education released on Tuesday morning a partial list of the 560 colleges and universities that were subjected to heightened financial scrutiny by the department due to concerns about their financial stability or accreditation.
The release is bad news in particular for for-profit colleges, which dominate the list.
The list includes schools of every type, from state universities to small religious colleges. However, for-profits are by far the largest contingent. Despite educating only 10 percent of U.S. students, more than half of the institutions on the heightened scrutiny list were for-profit.
The vast majority of schools are only receiving the lowest level of extra oversight, “heightened cash monitoring,” a label that can be earned for relatively minor infractions like submitting a late audit to the Education Department. However, 67 were subject to higher levels of scrutiny. Schools were hit with higher scrutiny for flaws such as accounting irregularities, accreditation problems, significant debt burdens and high default rates.
Most private schools listed were very small, such as local cosmetology schools, but some are among the largest for-profit outfits in the country. Large outfits hit with targeted scrutiny include ITT Educational Services, which operates the 57,000-student ITT Technical Institute, 25,000-student Colorado Technical University and the Art Institutes, a chain of for-profit schools totaling almost 70,000 students.
The federal government’s close monitoring of for-profit schools is hardly a publicity win for such institutions, adding questions about their long-term stability to existing criticisms about how well their students perform long-term. The for-profit sector is still haunted by the ghost of Corinthian Colleges, which had over 75,000 students before abruptly collapsing last year when the federal government placed a temporary freeze on the flow of student loans to the school, causing it to run out of money.
The Association of Private Sector Colleges and Universities, a for-profit college trade group, complained that the list unfairly victimized it without providing adequate context. Spokesman Noah Black told Inside Higher Ed that American students needed “clear, direct, and accurate information” about schools, not the release of a vague list.
The list is incomplete, and notably excludes the names of 21 colleges the government says are actively under federal investigation.
“We have ongoing investigations at each of those institutions and we fear that, at this point, releasing those names would impede the progress of our investigation,” Under Secretary of Education Ted Mitchell told Inside Higher Ed, which filed the original Freedom of Information Act request for the college list.
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