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ED is really not prepared for closures, plus a useful UC audit on OPMs
Phil Hill
June 12, 2024
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What ever happened to education news slowing down in the summer?
ED is Not Prepared for College Closures
Yesterday I showed data signs that are pointing to a dramatic enrollment drop in US higher education in the fall due to the FAFSA fiasco.
There are still a lot of unknowns, but we should at least be prepared for a 5-10% drop and a lot more college closures. I’d love to be wrong on this, but that’s the direction that the data are pointed.
At the same time, as described last week, the US Department of Education (ED) does not at all seem to be prepared for these closures as exemplified by the University of the Arts sudden closure and ED’s Heightened Cash Monitoring (HCM) list.
I combined the University of the Arts case along with the schools mentioned in the Hechinger Report and IHE articles to see if FSA was aware of the problems. As of the most recent public data release (December 2023), the Department of Education’s FSA office had only [three] out of 34 institutions on HCM status. And no, the University of the Arts was not on that list.
Furthermore, only two out of the 34 are for-profit institutions, which is where the vast majority of regulatory actions are targeted in terms of financial oversight.
I have edited that quote based on a mistake I found. Birmingham-Southern was on the list starting in December 2023.
But if you look deeper at the Birmingham-Southern College (BSC) closure, the situation gets worse. BSC should have been in ED’s radar for years based on publicly-available information described at AL.com.