How many nonprofit colleges failed the U.S. Department of Education’s financial-responsibility test for the 2011 fiscal year? That depends on what it means to “pass.”
According to the department, colleges with scores of 1.5 to 3.0 all pass and never hear from the department. (The scores, derived from financial information the colleges provide, run from positive 3.0 to negative 1.0.) Those that score 1.0 to 1.5 do not pass. The department considers them “financially responsible” but subjects them to additional monitoring and conditions. They can avert the monitoring, but only by posting a letter of credit equal to 50 percent or more of the federal student aid they receive.
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