Student Loan Related

List of Schools on the Federal Student Loan Watch List – September 2019

Written by Steve Rhode

The Department of Education has published its latest list of schools as of September 1, 2019, who are eligible to receive federal student loan money but have unresolved issues. – Source

As the Department of Education states:

“The U.S. Department of Education may place institutions on a Heightened Cash Monitoring (HCM) payment method to provide additional oversight of cash management. Heightened Cash Monitoring is a step that FSA can take with institutions to provide additional oversight for a number of financial or federal compliance issues, some of which may be serious and others that may be less troublesome.

There are two levels of Heightened Cash Monitoring:

Heightened Cash Monitoring 1 (HCM1): After a school makes disbursements to eligible students from institutional funds and submits disbursement records to the Common Origination and Disbursement (COD) System, it draws down FSA funds to cover those disbursements in the same way as a school on the Advance Payment Method.

Heightened Cash Monitoring 2 (HCM2): A school placed on HCM2 no longer receives funds under the Advance Payment Method. After a school on HCM2 makes disbursements to students from its own institutional funds, a Reimbursement Payment Request must be submitted for those funds to the Department.

Schools may be placed on HCM1 or HCM2 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 around the school’s administrative capabilities, concern around a schools’ financial responsibility, and possibly severe findings uncovered during a program review. Some schools are on this list due to preliminary findings made during a program review that is still open. Those findings could change when the program review is completed.”

Schools who appear on this list may experience increased financial problems and some types of issues may be indicative of a potential school closure.

The key to understanding the report is below.

READ  Department of Education's Heightened Cash Monitoring List: Students should check to see if their college is in financial trouble




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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