File–In this June 17, 2013, file photo, University of Oregon graduates make their way through campus along 13th Avenue towards Matthew Knight Arena during the traditional Duck Walk preceding graduation ceremonies in Eugene, Ore., June 17, 2013. (AP Photo/The Register-Guard, Brian Davies, file)
Hundreds of colleges across the county that are doing a poor job of managing their finances are on a federal watchlist that could ultimately make it difficult to access financial aid dollars, a critical lifeline for universities.
On Tuesday, the Education Department released the names of 556 colleges that it has placed under tougher oversight known as heightened cash monitoring. Schools can end up on the list for a myriad of reasons, including turning in late financial statements, having accreditation issues or operating with a lot of debt.
Under Secretary Ted Mitchell said the problems ranged from “serious to less troublesome” and called the added scrutiny more of a “caution light” than a “red flag to students and taxpayers.”
Still, there is a lot more interest in the watchlist these days because of the collapse of for-profit giant Corinthian Colleges. The company, which ran Everest, Heald College and WyoTech schools, landed on the list last summer for missing financial reporting deadlines. The government delayed the schools’ reimbursement on federal student loans for nearly a month, leaving the company strapped for cash and on the brink of closing.
Corinthian pleaded with the department for a lifeline to keep the doors open and received $16 million in federal student aid funds under the condition that it would sell or close its schools. Several months later, student debt collector ECMC Group purchased more than half of Corinthian’s 107 campuses.
It’s unknown whether any of the schools on the watchlist are nearing the level of Corinthian. The government …read more