(Written jointly by Private Equity Stakeholder Project and Americans for Financial Reform)
The US Department of Education requires colleges and universities to submit audited financial statements to demonstrate they are maintaining the standards of financial responsibility necessary to participate in the Title IV programs.[i]
Several private equity-owned for profit colleges failed the Department of Education’s financial responsibility test during the 2014-2015 academic year. Schools that scored in the “not financially responsible” range include Trident University International (owned by PE firm Summit Partners), Northcentral University (Falcon Investment Partners), Tribeca Flashpoint College (Sterling Partners), Blue Cliff College (Quad Partners), Instituto de Banca y Comercio (ABRY Partners), Vatterott Educational Centers (TA Associates), Fortis College (JLL Partners), Virginia College (Landmark Partners), Miller Motte College (Apollo Investment Corp), and the Art Institutes (KKR).
These and a number of other private equity-owned for profit colleges including Swedish Institute (Quad Partners), National University College (ABRY Partners), All-State Career (JLL Partners), Brightwood College (Landmark Partners), Miami-Jacobs Career College (Apollo Investment Corp), Walden University (KKR) and Argosy University (KKR) have been placed on “heightened cash monitoring” status by the Department of Education[ii], requiring them to operate under more restrictive conditions and extra scrutiny because of concerns about their management or administration of federal financial-aid dollars.[iii]