Heightened cash monitoring

Heightened cash monitoring is a regulatory process used by the United States Department of Education to monitor certain universities that receive student financial aid disbursements from the government and may be in financial difficulty.[1]

Levels

There are three levels of monitoring that can apply to an institution. Level 1 (HCM1) is the least severe.[2]

Level 1

Institutions assigned to level one, known as "HCM1", have to provide funds to students out of their own reserves, and then draw the funds afterward from the Federal Student Aid (FSA) program.[2]

Institutions that were on Heightened Cash Monitoring Level 1 that subsequently closed included:[3]

Level 2

HCM2 institutions provide funds to students out of their own reserves, and then seek reimbursement afterward from the FSA program of the Department of Education.[2] Institutions that were on Heightened Cash Monitoring Level 2 and subsequently closed included:

Notable institutions on Heightened Cash Monitoring 2 by the United States Department of Education as of June 2026 include:

Notable institutions formerly on Heightened Cash Monitoring 2 include:

Reimbursement level

A stronger version of level two, in which the FSA reviews every payment reimbursement request by the educational institution before acting on it.[2]

History

2010s

The Department of Education first began releasing Heightened Cash Monitoring records in 2015 following media investigations by Inside Higher Ed. These reports suggested that the government was intentionally withholding the identities of institutions whose financial or administrative instability had already triggered restricted access to federal aid.[14][15]

In that earliest March 2015 list, of 560 institutions subject to heightened cash monitoring, 487 were at level HCM1, the lower level of monitoring, and 69 were on the stricter level 2 (HCM2).[16]

2020s

Of the colleges that utilize federal funding, nearly 10% fell under level one status (HCM1) in 2023. Specifically, the Department of Education designated 493 institutions as HCM1 and another 78 as HCM2, comprising about 10% of participating institutions at the time.[14]

Harvard University

While heightened cash monitoring designations are invariably for institutions with serious financial problems requiring closer attention by the Department of Education, Harvard University was placed on Heightened Cash Monitoring level 1 in September 2025.[17][18] Jon Fansmith, of the American Council on Education described the move by the United States Department of Education as "harassment."[18]

Harvard has a $53 billion endowment. Prior to assigning it to HCM1 status, the administration had restricted research funding and pressured Harvard to pay a $500 million fine but it did not submit to these and other demands.[19]

References

  1. ↑ Institutions on Heightened Cash Monitoring, Office of Federal Student Aid (FSA), 2022-09-23, retrieved 2026-04-09
  2. 1 2 3 4 Higher Learning Commission (24 February 2023). "Heightened Cash Monitoring: Policy Change Adopted on Second Reading" (PDF). Chicago: Higher Learning Commission. Retrieved 9 April 2024.
  3. ↑ "The Art Institutes, a Collection of For-Profit Colleges, Announced It Will Abruptly Close Its Eight Remaining Campuses". Artnet News. 2023-09-28. Retrieved 2026-04-09.
  4. ↑ "Bristol University HCM2 Method of Payment Redacted" (PDF).
  5. ↑ "Education Department ramps up oversight of Eastern Gateway Community College | Higher Ed Dive". www.highereddive.com.
  6. ↑ Halperin, David. "Education Department Restricts Cash Flow to Florida Career College - Republic Report".
  7. ↑ Halperin, David. "Independence U. Lays Off Staff, Says Feds Stopped Aid - Republic Report". Republic Report. Retrieved 2026-04-09.
  8. ↑ https://www.kvue.com/article/news/local/itt-tech-closing-all-schools-nationwide/269-314446375
  9. ↑ "For-profit Northwestern College closes abruptly | Higher Ed Dive". www.highereddive.com. Retrieved 2026-04-09.
  10. ↑ Fain, Paul. "The Department and St. Catharine". Inside Higher Ed.
  11. ↑ Monk, Dan (August 24, 2023). "Feds intervene as financial turmoil worsens at Union Institute". WCPO 9 Cincinnati.
  12. ↑ Pontones, Gabe (June 24, 2026). "OCU given Financial Issue Designation following sanctions from Dept. of Ed". 14 News.
  13. ↑ Odato, James (December 19, 2023). "Government releases Paul Smith's from heightened monitoring".
  14. 1 2 Kelchen, Robert (2024-04-29). "New Research on Heightened Cash Monitoring". Robert Kelchen. Retrieved 2026-04-10.
  15. ↑ "U.S. to Identify Colleges Under Scrutiny". Inside Higher Ed. Retrieved 2026-04-10.
  16. ↑ "Cash Monitoring List Unveiled". Inside Higher Ed. 30 March 2015. Retrieved 10 April 2026.
  17. ↑ Gough, Ryan (10 October 2025). "Understanding Heightened Cash Monitoring: Implications for Colleges and Universities". Berry Dunn. Retrieved 2026-04-09.
  18. 1 2 Whitford, Emma. "Education Dept. Subjects Harvard to More Financial Oversight". Inside Higher Ed. Retrieved 2026-04-09.
  19. ↑ Bauer-Wolf, Jeremy (25 September 2025). "Heightened Cash Monitoring Weaponized: Failing Schools Skirt Scrutiny, Harvard Takes the Blow". Washington, D.C.: New America. Retrieved 10 April 2026.
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