Federal Student Aid (FSA) recently posted two updated school reports on its data center: Institutions on Heightened Cash Monitoring as of Sept. 1, 2023, and Proprietary Institution Conversions. FSA also updated information about foreign gifts and contracts reported by institutions as of Oct. 13, 2023.
Information below provides a snapshot of key findings in the data sets.
Heightened Cash Monitoring Report
The U.S Department of Education (ED) may provide federal student aid funds to an institution under the advance payment method, heightened cash monitoring (HCM) payment method, or reimbursement payment method.
Under the advance payment method, an institution submits a request for funds that may not exceed the amount of funds the institution needs immediately for disbursements the institution has made or will make to eligible students and parents. The institution can electronically access the funds and must disburse the federal student aid requested within a specific timeframe.
FSA may place an institution on an 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 HCM:
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Heightened Cash Monitoring 1 (HCM1): After an institution makes disbursements to eligible students from institutional funds and submits disbursement records to the Common Origination and Disbursement (COD) System, it draws down ED funds to cover those disbursements.
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Heightened Cash Monitoring 2 (HCM2): An institution placed on HCM2 no longer receives funds under the Advance Payment Method. After an institution on HCM2 makes disbursements to students from its own institutional funds, the institution must submit a Reimbursement Payment Request to ED for those funds.
ED may place an institution on the Reimbursement payment method if ED determines that the institution 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. Institutions 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 institution’s financial responsibility, and possibly severe findings uncovered during a program review.
FSA’s Sept. 1, 2023, HCM report identifies 425 institutions receiving Title IV funds under HCM. Nearly half (211 institutions) are for-profit institutions, while approximately 40% (172 institutions) are nonprofits, and the remaining 10% (42 institutions) are public.
Of the 425 institutions on the Sept. 1, 2023, report, 376 are on HCM1, and 49 are on HCM2. Nearly 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. More than 80% of the institutions 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.
Proprietary Institution Conversions Report
As part of FSA’s responsibility to conduct oversight of the institutions that participate in the Title IV programs, FSA reviews and issues decisions on requests from proprietary (i.e., for-profit) institutions to convert to a nonprofit or public status.
To its list of decisions about proprietary institution conversion requests since Fiscal Year 2017, FSA added Apex Technical College and the University of Arkansas – Grantham (formerly known as Grantham University); both conversion requests were approved in 2023.
Updates of Foreign Gift and Contract Data Reported by Institutions
More than 30 years ago, Congress enacted disclosure requirements to promote public transparency about the role of foreign funding in U.S. higher education. Section 117 of the Higher Education Act of 1965, as amended(HEA), requires institutions of higher education that receive federal financial assistance to disclose semiannually to ED any gifts received from and/or contracts with a foreign source that, alone or combined, are valued at $250,000 or more in a calendar year. The statute also requires institutions to report information when owned or controlled by a foreign source. More information about Section 117 is available on the Knowledge Center Foreign Gift and Contract Reporting Topics page.
The HEA requires institutions to update their reporting twice per year and submit information no later than Jan. 31 or July 31, whichever is sooner. Foreign gift and contract data reported between June 22, 2020, and Oct. 13, 2023, can be viewed in the interactive online database from ED’s College Foreign Gift Reporting website at sites.ed.gov/foreigngifts. A comprehensive file of all public records also may be downloaded from the site.
FSA’s latest foreign gift and contract reporting data set shows nearly 5,000 additional foreign gifts and contracts transactions valued at nearly $4 billion since ED’s last data release as of Oct. 13, 2023. The largest dollar amounts of gifts and contracts reported to ED between April 6, 2023 and Oct. 13, 2023 were from sources in Germany, Kuwait, Qatar, China, and France. The institutions reporting the largest total dollar amounts in foreign gifts and contracts between April 6, 2023 and Oct. 13, 2023 were the University of Pennsylvania, the University of Missouri–Kansas City, Case Western Reserve University, Stanford University, and Harvard University.
The FSA Data Center was launched in 2009 to increase government transparency by posting information useful to businesses, postsecondary institutions, the media, and individuals.