U.S. Department of Education is scrutinizing the use of federal financial aid at six Indiana private colleges because of concerns over financial responsibility and late or missing financial audits.
The colleges are among a list of about 560 institutions included on the so-called “Heightened Cash Monitoring” list as of March 1 and released for the first-time today by the department following requests from media.
Schools on the list may face delayed or a stop to student loan payments from the federal government.
Ted Mitchell, the under secretary of education, wrote in a blog post that the monitoring list is a way the Federal Student Aid office provides additional oversight for financial or federal compliance issues, “some of which may be serious and others that may be less troublesome.”
“Heightened Cash Monitoring is not necessarily a red flag to students and taxpayers, but it can serve as a caution light,” Mitchell said. “It means we are watching these institutions more closely to ensure that institutions are using federal student aid in a way that is accountable to both students and taxpayers.”
The reason for a college being monitored, can include late financial statements, outstanding liabilities, accreditation issues, concerns about a school’s financial responsibility or possibly severe findings uncovered during a program review, Mitchell said.
One of the Indiana colleges -- Masters of Cosmetology College in Fort Wayne -- is placed on the more severe level of concern because of administrative capability.
The Indiana colleges on the list and the reason are:
- ITT Technical Institute, Indianapolis, Audit late/missing
- Saint Mary of the Woods College, Saint Mary of the Woods, Financial responsibility
- Holy Cross College, Notre Dame, Financial responsibility
- Medtech College, Indianapolis, Financial responsibility
- Lincoln College of Technology, Indianapolis, Financial responsibility
- Masters of Cosmetology College, Fort Wayne, Administrative capability
The Wall Street Journal reported that ITT Educational Services Inc., was late in filing its 2013 financial statements and audit, “due to an extended review of a complex accounting issue which included guidance we requested from the SEC’s Office of the Chief Accountant," according to spokeswoman Nicole Elam.
According to Inside Higher Education, who had requested the release of the information, the U.S. DOE has yet to identify of 21 of the 69 colleges placed on the highest level of monitoring.
The U.S. DOE is expected to soon publish the list on its website. Inside Higher Education has made it available here.