Our objective was to determine the Department’s processes for (1) overseeing proprietary institutions’ compliance with 90/10 revenue requirements and (2) reporting of 90/10 revenue information to Congress and the public.
We found that the Federal Student Aid office (FSA) had several processes for overseeing proprietary institutions’ compliance with 90/10 revenue requirements. Specifically, the FSA system used by institutions to submit their financial statements (eZ-Audit system) calculated 90/10 revenue percentages for proprietary institutions based on the audited financial statements submitted, acceptability reviews of financial statements, quality control reviews of financial statements, possible sanctions against proprietary institutions that do not meet 90/10 revenue requirements, and guidance issued on 90/10 revenue requirements. We also found that the Department was late to report proprietary institutions’ 90/10 revenue information to Congress for all 5 award years we reviewed (2016–2017 to 2020–2021). In addition, the Department’s 90/10 revenue report to Congress for award year 2019–2020 was incomplete. Finally, the Department did not publicly disclose the proprietary institutions that did not meet 90/10 revenue requirements on the College Navigator website as required by the Higher Education Act of 1965, as amended (HEA). Instead, the Department identified the proprietary institutions that did not meet 90/10 revenue requirements on the Department’s College Affordability and Transparency Center website.
We made three recommendations: (1) that FSA and the Office of Postsecondary Education (OPE) update and implement processes for extracting 90/10 revenue information from the eZ-Audit system and for reviewing and reporting 90/10 proprietary institution revenue percentage reports to ensure that 90/10 revenue information is reported to Congress by July 1 each year, (2) that evaluate whether the recently updated timeframe for the acceptability review process of institutional proprietary financial statements is sufficient to ensure all proprietary institutions’ 90/10 information is included in the report to Congress, and (3) that OPE work with the Institute of Education Sciences and the National Center for Educational Statistics to ensure proprietary institutions that did not meet 90/10 revenue requirement are disclosed on the College Navigator website as required by the HEA.
Oversight and Monitoring—Federal Student Aid
See other OIG work related to 90/10 revenue information.