The Education Department, headed by Secretary Arne Duncan, says it's keeping a close eye on 556 colleges and universities that do a poor job of complying with federal regulations and handling federal financial aid.
No school wants to be on this list.
It was just released by the Department of Education. On it are the names of 556 colleges and universities that failed the department's "financial responsibility test."
Undersecretary of Education Ted Mitchell says that each school's finances are now being placed under a microscope because the government "had serious concerns about the financial integrity of the institution or its administrative capacity."
With this watchlist, Mitchell says, the Education Department can better ensure that these schools use federal student aid in a way that's accountable to both students and taxpayers.
The list includes 103 private, nonprofit colleges. Sixty-eight are public schools — including Alabama State University, Southern Illinois University at Carbondale and Roxbury Community College in Boston.
Also on the list are some selective, private universities with otherwise good reputations: Bard College at Simon's Rock in Massachusetts, Long Island University and San Francisco Conservatory of Music.
But of the 556 schools on the list, a majority (just under 300) are private, for-profit schools — including places with names like Galaxy Medical College, David's Academy of Beauty and the Real Barbers College.
The Association of Private Sector Colleges and Universities did not respond to NPR's requests for comment. But they're not the only critics of the feds' watchlist.
"It's a shaming technique and a very different approach in the department's relationship with colleges and universities," says Richard Ekman, president of the Council of Independent Colleges.
Ekman acknowledges that many schools fail to present accurate or complete information about how they handle government funds, and he believes the Education Department has every right to go after those schools.
"What I don't know," Ekman says, is whether this list "is a list where the diagnosis has been made correctly."
He worries that some schools in good standing have been unfairly singled out and had their reputations tarnished. Ekman says the department has, in the past, accused innocent schools of violations and failed to correct its mistakes.
Whether or not a college belongs on the list, Ekman insists the effect on admissions, donations, and public reputation is the same. "And to try and correct that can take years," he warns.
Undersecretary Mitchell says the department is listening to its critics. "We've heard concerns from higher education, and we hope to work to address those."
But the government clearly believes the benefits of making its list public far outweigh any potential risks to individual institutions. With this information, Mitchell says, students and families will be better informed and better served.
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Transcript
STEVE INSKEEP, HOST:
Call it the opposite of the dean's list. The Department of Education has released a list of colleges and universities that it says have done a poor job handling federal financial aid. They're also accused of keeping taxpayers in the dark about the quality of education they're providing. As NPR's Claudio Sanchez reports, the move has come under fire from higher education groups that say it amounts to a public shaming.
CLAUDIO SANCHEZ, BYLINE: The 556 colleges and universities that the education department has red-flagged have not - repeat - have not been accused of specific violations. What they've done is failed the department's so-called financial responsibility test. Translation...
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TED MITCHELL: We had serious concerns about the financial integrity of the institution or its administrative capacity.
SANCHEZ: That's Undersecretary Ted Mitchell on a conference call with reporters, laying out his case for putting schools' finances under a microscope or what's called heightened cash monitoring.
(SOUNDBITE OF ARCHIVED RECORDING)
MITCHELL: To ensure they're using federal student aid in a way that is accountable both to students and to taxpayers.
SANCHEZ: On the list are 103 private, nonprofit colleges, many of them Bible schools. Sixty-eight are public colleges - schools like Alabama State University, Southern Illinois University at Carbondale and Roxbury Community College in Boston. There are also selective private schools with good reputations on the list - Long Island University and San Francisco's Conservatory of Music. But of the 556 schools on the list, a majority - just under 300 - are private, for-profit schools with names like Galaxy Medical College, David's Academy of Beauty and Real Barbers College. Private for-profits often have high dropout rates and large student loan default rates. The Association of Private Sector Colleges and Universities did not respond to NPR for comment. But they're not the only critics of the list.
RICHARD EKMAN: It is a shaming technique. And it is a very different approach in the department's relationship with colleges and universities.
SANCHEZ: Richard Ekman is president of the Council of Independent Colleges. He says this crackdown paints all of higher education with the same brush. Yes, Ekman says, the department has every right to go after schools that either don't present accurate or complete information about how they handle government funds or keep students and families in the dark.
EKMAN: What I don't know is whether the institutions on this particular list that has just been released - is a list where the diagnosis has been made correctly.
SANCHEZ: After all, says Ekman, the Education Department has, in the past, incorrectly accused some schools of the violations and never corrected its mistakes.
EKMAN: If a college is on one of those lists, properly or not, the effect is the same on admissions, on donations, on public reputation. And to try to correct that can take years.
MITCHELL: It's a good point. And we've heard concerns from higher education. And we hope to work to address those. We're not about punishment. We're not about punitive regulation.
SANCHEZ: This is about improving the quality of higher education in this country, says Undersecretary Ted Mitchell. And now that the list of institutions that need to be closely watched has been made public, Mitchell says students and families will be better informed and better served. Claudio Sanchez, NPR News. Transcript provided by NPR, Copyright NPR.
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