Heightened cash monitoring

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

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]

• Art Institute of Las Vegas (2019)
• The Art Institutes (2023)

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:

• Bristol University, placed on HMC2 in 2015; closed 2017^[4]
• Vatterott College, closed in 2018
• Independence University, placed on HMC2 in 2021; closed that same year^[5]
• Northwestern College, placed on HMC2 in 2022; closed in 2024^[6]

Notable institutions on Heightened Cash Monitoring 2 by the United States Department of Education as of December 2025 include:

• American University of Antigua in Antigua and Barbuda
• California College of Music in Pasadena, California
• Hobe Sound Bible College in Hobe Sound, Florida
• Randall University in Moore, Oklahoma
• St. Augustine's University in Raleigh, North Carolina

• Sotheby's Institute of Art in London, England and New York City, New York

• Urshan University in Wentzville, Missouri
• Yeshiva of Nitra in Brooklyn, Chester and Mount Kisco, New York

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

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.^[7][8]

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).^[9]

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.^[7]

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.^[10][11] Jon Fansmith, of the American Council on Education described the move by the United States Department of Education as "harassment."^[11]

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.^[12]