Christian Colleges among Those Named by Department of Education for Financial Scrutiny

U.S. Department of Education sealSeveral members of the Council for Christian Colleges & Universities (CCCU) appeared on a recently-released list of 560 institutions of higher learning whose federal aid has been restricted by the U.S. Department of Education, in many cases because of financial concerns.

Under secretary of education Ted Mitchell explained that what the department calls “Heightened Cash Monitoring is not necessarily a red flag to students and taxpayers, but it can serve as a caution light. 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 list includes several conservative Bible schools, but also Catholic and mainline Protestant colleges and — perhaps of greatest interest to readers of this blog — CCCU members Bryan College, Evangel University, Montreat College, and Sterling College are all listed as being on the first (lower) level of Heightened Cash Monitoring. So too is CCCU affiliate member Kuyper College of Michigan, which last month decided to eliminate its athletic program in response to declining enrollment.

Still, it’s probably best not to read too much into the “HCM1” status, given how much debate has swirled around how the DOE determines colleges’ scores on its “financial responsibility test.” (Though not on the cash monitoring list, my own employer has been going back and forth with the department on this count for a couple of years now, principally it seems because of how pension obligations are calculated.)  “A lot of financially healthy institutions can find themselves on HCM1, for any number of minor reasons,” explained American Council on Education representative Terry Hartle to Inside Higher Ed.

But he acknowledged that the higher level of cash monitoring (HCM2) “is a more serious problem, and institutions that are on there probably merit a close look.” In fact, the DOE waited until the end of last week to make public 20 of the 69 colleges facing the higher level of monitoring, which, Inside Higher Ed explains, “means that department employees manually approve every dollar that flows to an institution. Nearly all of those unidentified colleges were on that status because a federal audit of the institution resulted in ‘severe findings.'”

The only CCCU member on the heightened cash monitoring list was one of those named on Friday: Eastern Nazarene College in suburban Boston.

Gardner Hall, Eastern Nazarene College
Gardner Hall at Eastern Nazarene College – Wikimedia

According to ENC president Corlis McGee (when asked for comment by the Boston Globe), the “severe findings” in this case resulted from a review last fall of the college’s program for non-traditional, adult learners. McGee stressed that Eastern Nazarene students are still receiving financial aid and that a final report is still pending.

(Note: while I’ve written about the financial challenges facing CCCU schools before, Eastern Nazarene hadn’t come up in my research. It was rated as “financially sustainable” in the widely-read 2012 paper on that topic by Bain & Co. And when Forbes magazine attempted its own financial sustainability review in 2013, ENC joined nearly 60% of the CCCU membership in earning a C, while eighteen others — including Evangel — got the lowest grade, a D.)


One thought on “Christian Colleges among Those Named by Department of Education for Financial Scrutiny

  1. Frankly, I find the behavior of the government far more disturbing, alternately operating secretly and placing institutions under a cloud of suspicion without due process.

    A college being on the list “is not necessarily a red flag to students and taxpayers, but it can serve as a caution light,” Mitchell wrote in a blog post. “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.”

    Before releasing the names of the institutions on cash monitoring Tuesday, the department had fought to keep the information secret. As recently as last week, the department said that disclosing the list was likely to result in a “substantial competitive injury” for colleges operating in a competitive marketplace.

    The department reversed its position late last week after Inside Higher Ed reported that the cash monitoring information was largely being kept hidden from public view.

    When Inside Higher Ed first requested the cash monitoring list last summer, the department denied the request and claimed that it did not keep such a list.

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