Three ABA law schools now being subjected to “heightened cash monitoring” by Education Department
By 
From the government’s federal student aid webpage:
The U.S. Department of Education may place institutions on a Heightened Cash Monitoring (HCM) payment method to provide additional oversight of cash management. . .
Schools may be placed on HCM1 or HCM2 as a result of compliance issues including but not limited to accreditation issues, late or missing annual financial statements and/or audits, outstanding liabilities, denial of re-certifications, concern around the school’s administrative capabilities, concern around a schools’ financial responsibility, and possibly severe findings uncovered during a program review.
Many of the institutions on the current list are beauty schools, culinary academies, and the like.
The three law schools that have been placed on the equivalent of financial probation in regard to their access to federal educational loan funds — any prolonged interruption of such access would certainly shut down these and many other law schools — are Charleston, a for-profit operation whose owners pocketed $25 million in profits (most of which were supplied by federal loans of course) and then refused to part with less than .1% of that total to pay for a reception for graduates, long-time LGM favorite the Thomas Jefferson School of Law in San Diego, and Ave Maria School of Law in Naples, Florida, the brain child of Domino’s Pizza founder Tom Monaghan, who moved the school there from Ann Arbor in 2009, apparently because the 10 ABA law schools already in Florida weren’t pumping out enough lawyers to serve the needs of the Sunshine State.
(Ave Maria’s Ann Arbor building was taken over by Thomas Cooley, which a couple of years later provided a 12th Florida law school, by opening a Tampa campus. Cooley closed its Ann Arbor campus last year.)
The DOE’s stated reason for subjecting all three law schools to heightened cash monitoring is because of concerns over “financial responsibility.”
Section 498(c) of the Higher Education Act of 1965, as amended, requires for-profit and non-profit institutions to annually submit audited financial statements to the Department to demonstrate they are maintaining the standards of financial responsibility necessary to participate in the Title IV programs. One of many standards, which the Department utilizes to gauge the financial responsibility of an institution, is a composite of three ratios derived from an institution’s audited financial statements. The three ratios are a primary reserve ratio, an equity ratio, and a net income ratio. These ratios gauge the fundamental elements of the financial health of an institution, not the educational quality of an institution.