The Department of Education is monitoring slightly fewer schools for their handling of federal funds, according to officials.
The department has classified institutions under two separate "heightened cash monitoring" categories, HCM 1 and HCM 2. Unlike other colleges, institutions on these lists must pay students for grants and loans before receiving those funds from the federal government. The difference between HCM 1 and HCM 2 lies in how schools apply for repayment: the stricter HCM 2 requires colleges to provide much more detailed information on each student transaction.
A small drop
An updated list shows that 81 colleges have been removed—including 12 now-closed Corinthian Colleges campuses.
When first made public in March:
- 487 schools were on HCM 1; and
- 69 schools were on HCM 2.
As of June 1:
- 413 institutions were on HCM 1; and
- 70 were on HCM 2.
Sixteen new institutions were added to HCM 1, most of them for failing financial responsibility standards, three dropped from HCM 1 to HCM 2, and seven new institutions were added directly to HCM 2.
How institutions get on the list
Undersecretary of Education Ted Mitchell explains that a college might appear on the list for a range of reasons, some of which are less serious than others. Some institutions are listed because they submitted an audit late—but according to the Chronicle of Higher Education, others are listed because they failed a federal test of financial health.
In a blog post, Mitchell wrote that the list is "not necessarily a red flag to students and taxpayers, but it can serve as a caution light" (Inside Higher Ed, 7/14; Thomason, "The Ticker," Chronicle of Higher Education, 7/14).
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