(GENERAL-23-67) Federal Student Aid Posts New School Reports to FSA Data Center

Federal Student Aid recently posted school reports on its FSA Data Center including the Award Year (AY) 2021-2022 90/10 Report to Congress, Schools on Heightened Cash Monitoring, School Fines Imposed during Fiscal Year (FY) 2022, and the Top Ten School Audit Findings and School Program Review Findings resolved during FY2022 with a companion report.

Federal Student Aid proactively posts reports to the FSA Data Center website in support of open government initiatives to help ensure consistency, increase transparency, and establish self-service opportunities for stakeholders.

While not exhaustive, the information below provides a snapshot of key findings in our most recent reporting.

Section 487 of the Higher Education Act of 1965, as amended (HEA) requires a proprietary institution of higher education (IHE) to derive not less than ten percent of its revenues from sources other than Title IV, HEA program funds and requires the Secretary to submit an annual report to Congress.

The AY 2021-2022 90/10 Revenue Percentages report shows the revenue percentage for 1,622 proprietary IHEs based on the proprietary IHEs’ most recent fiscal year with end dates between July 1, 2021, and June 30, 2022. The report shows for each proprietary IHE the total funding received by each institution under the Title IV programs and the total institutional revenues on which the numerator and denominator of the 90/10 revenue percentage calculation (with adjustments specified in statute and regulation) are based.

Three of the 1,622 institutions identified in the report failed to derive at least ten percent of their revenues from sources other than Title IV, HEA program funds during the reporting period. Those institutions are D’Mart Institute, Moore Career College, and Prospect College. The AY 2021-2022 90/10 Revenue Percentages report is accessible at studentaid.gov/data-center/school/proprietary.

FSA may place an IHE on a Heightened Cash Monitoring (HCM) payment method to provide additional oversight for financial or federal compliance issues, some of which may be serious and others less troublesome.

There are two levels of Heightened Cash Monitoring:

Additionally, ED may place an IHE on the “Reimbursement” payment method if it determines that the IHE needs the highest level of monitoring. The “Reimbursement” payment method is similar to HCM2, except ED reviews the documentation for all students and parents included in the payment request, not just a sample. IHEs may be placed on HCM1, HCM2, or Reimbursement as a result of compliance issues including but not limited to accreditation issues, late or missing annual financial statements and/or audits, outstanding liabilities, denial of re-certifications, concern regarding the institution’s administrative capabilities, concern regarding an IHE’s financial responsibility, and possibly severe findings uncovered during a program review.

FSA’s recent report identifies 416 IHEs receiving Title IV funds under HCM. Nearly half (207) are for-profit institutions, while more than 40% are nonprofits, and the remaining 9% are public.

Of the 416 IHEs on the June report, 376 are on HCM1, and 40 are on HCM2. 94% of institutions that were placed on HCM1 are due to financial responsibility, or late or missing compliance audits or financial statements submissions. Institutions may also be cited for a past performance violation due to a late audit submission. 80% of the IHEs placed on HCM2 have exhibited accreditation problems, administrative capability concerns, or Title IV compliance concerns identified in audits, or program reviews. The HCM report is accessible at studentaid.gov/data-center/school/hcm.

FSA annually publishes a School Fine Report showing cumulative fines imposed since FY2010. The FY2022 School Fine Report identifies 18 IHEs that were assessed fines totaling $2,564,528. The two largest fines imposed in FY2022 were $670,000 (assessed against University of Texas at San Antonio) and $475,000 (assessed against University of North Georgia), which were imposed as a result of findings identified in two audits of IHEs conducted by the Department’s Office of Inspector General concerning violations of campus security requirements of the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act. Other fines imposed during FY2022 include $72,000 against Wiley College for violations of the ban on incentive compensation, $1,298,153 against another eight institutions (Bryant & Stratton College, Chowan University, Clatsop Community College, Homestead Schools, Lincoln University (located in Oakland, CA), Southern Utah University, Southwest Mississippi Community College, and University of Arkansas at Pine Bluff) for violations of campus security requirements, and $49,375 against seven institutions (Florida School of Traditional Midwifery, Lehigh Valley Barber & Beauty Academy, More Tech Institute, The Pro Beauty Academy, Santa Rosa Junior College, Sumner College, and Walnut Hill College) for failures to report Integrated Postsecondary Education Data System (IPEDS) information to the Department.

FSA also annually publishes the ten most frequently occurring findings of noncompliance that were resolved through the Department’s audit resolution and program review processes. During FY2022, FSA frequently resolved deficiencies related to reporting of student enrollment status data; calculation of Return to Title IV (R2T4) amounts; administration of Title IV student credit balances; violations of requirements to verify student aid application data; and loan counseling; among other things. We encourage you to read the companion report to the Top Ten School Audit Findings and Top Ten School Program Review Findings to improve your institution’s awareness of the types of compliance deficiencies most frequently observed by FSA’s compliance and enforcement units so you can take proactive measures to self-assess and prevent similar compliance deficiencies from occurring at your institution.

The FY2022 School Fine Report, FY2022 Top Ten School Audit Findings and Top Ten School Program Review Findings and the FY2022 companion report are hosted on the FSA Data Center’s School Data page at studentaid.gov/data-center/school/fines-and-findings.

The FSA Data Center was launched in 2009 to increase government transparency by posting information useful to businesses, postsecondary institutions, the media, and individuals.