Eight UK universities on US financial watch list

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Running a risk: the list, which has been widely reported, could make the institutions named less attractive to US students

Eight UK higher education institutions are included on an official US list of universities subject to heightened monitoring because of concerns about their finances or administration of US student loans.

The list of about 540 institutions on “heightened cash monitoring”, drawn up by the US Department of Education, mostly contains for-profit US colleges. But it also includes the universities of Brunel (which now says it has been removed), Birmingham City, Middlesex, Queen Margaret, Gloucestershire, Westminster, Rose Bruford College and the University of Wales, Lampeter, now part of the University of Wales Trinity Saint David.

The list has been widely reported in the US and could make the institutions less attractive to US students. A department spokesman defended an earlier decision not to release it on the grounds that doing so would “likely cause the institutions substantial competitive injury”.

However, in a blog earlier this month, Ted Mitchell, US under secretary of education, says that releasing it complements wider efforts by the department to make university study “more affordable and accessible” by increasing “both the quantity and quality of information that students, families, borrowers and the public have about higher education”.

Heightened cash monitoring, he explains, can be triggered by various “financial or federal compliance issues”. It is “not necessarily a red flag” but means “we are watching these institutions more closely to ensure [they] are using federal student aid in a way that is accountable to both students and taxpayers”.

The UK institutions are all subject to the less serious of two levels of monitoring, and are still able to distribute US student loans. All but one are listed owing to concerns about “financial responsibility”, meaning that they have failed to demonstrate “the fundamental elements of the financial health of an institution”.

The exception is Gloucestershire, the concern about which relates to “administrative capacity”. A spokeswoman for the institution said that it withdrew from offering US federal aid to new students in 2013-14.

A spokeswoman for Queen Margaret said the institution had fallen foul of “a technical financial ratio adopted by the US government relating to the level of borrowings” on account of the debt it had taken on – with the approval of the Scottish Funding Council – to fund a new campus.

A Middlesex spokesman said it has been flagged up because of the unusual inclusion in its accounts of a defined contribution pension scheme liability.

A spokeswoman for Westminster cited a “purely technical accounting matter because of how the university reports its accounts”, while Birmingham City University blamed “a relatively minor procedural matter concerned with administering US student loans for a small number of students”, which has since been rectified.

A spokesman for Brunel said that although the university appeared on the most recently available list, it had been told by the department that it was no longer included and met all the department’s requirements.

The University of Wales Trinity Saint David responded that there were a “number of mitigating factors” for its inclusion including the “recertification of the university’s registration from the original University of Wales, Lampeter, to UWTSD following merger in 2009. Throughout this period the university has been able to process federal loans”.

Rose Bruford did not respond to requests for comment.

The 31 non-US institutions on the list also include Australia’s University of Melbourne, the Netherlands’ University of Amsterdam and Canada’s University of Toronto. Toronto is subject to the more serious class of monitoring, meaning it no longer receives advance payments from the department.

paul.jump@tesglobal.com