House Democrats’ proposal to surveil struggling schools doesn’t go far enough to predict which institutions are at risk of closure, observers say.
Among the most long-standing complaints in higher education is the method by which the U.S. Department of Education tracks the financial health of private nonprofit and for-profit schools.
The financial responsibility composite score, a measure built into the Higher Education Act, examines colleges’ liquidity, equity and profitability in order to gauge their financial standing and control access to federal financial aid.
But the measure has been derided for relying on retrospective data that does not reflect the current condition of an institution. Some of the most recently available scores are based on data that is three years old. A U.S. Government Accountability Office report in 2017 found that the composite score predicted only half of college closures since the 2010-11 academic year.
Criticism of the metric has been renewed as the pandemic’s economic fallout ravages college budgets and all but assures the accelerated closure of some precariously positioned institutions.