Which Law School Is On The DOE's Financial Monitoring List?
Only one law school earned the DOE's scrutiny. And it's not the first time this school's been scolded.
Let’s preface this with a reminder that just because the U.S. Department of Education has flagged your school for “Heightened Cash Monitoring,” a stricter level of federal student loan oversight, it doesn’t mean the school has done anything wrong. It’s like walking into a restaurant with a “Grade Pending” rating from the health department: has the health department just not been there yet, or has the joint appealed its rating over an abundance of rat feces? You just don’t know!
With that out of the way, let’s focus on the fact that the DOE released its list of (most of) the 560 colleges whose federal aid programs raised “concerns about their finances or compliance with federal requirements” and included one, solitary law school on the list.
Ave Maria may want to start with the Hail Marys after Tuesday’s revelation. The DOE list is certainly not the ranking list where Ave Maria wanted to find itself, but since U.S. News didn’t come through for them and — spoiler alert — ATL’s Top 50 won’t either, Ave Maria can be relieved that at least they’re at the bottom of this list. As noted by Bar Exam Stats:
Document Automation For Law Firms: The Definitive Guide
Ave Maria (found on page 5) appears to be the only law school on the list and, like the majority of institutions is classified under the lower level of monitoring “HCM – Cash Monitoring 1” due to “Financial Responsibility.”
I guess that’s your silver lining — it’s the lowest level of “we’re seriously skeptical of your finances.” Despite how bad that sounds, we’re obliged to note again that students shouldn’t necessarily freak out about this. Per the DOE:
Heightened Cash Monitoring is not necessarily a red flag to students and taxpayers, but it can serve as a caution light. It means we are watching these institutions more closely to ensure that institutions are using federal student aid in a way that is accountable to both students and taxpayers.
To run with the DOE’s metaphor, why are the feds waving a yellow flag on Tom Monaghan’s dumbest idea since the “30 Minutes or Less” guarantee turned his terrible pizza joint into a liability factory? Perhaps its consistently flagging financial health got some attention.
Sponsored
Are Small Firms Going Big On Legal Tech?
Profit Powerhouse: Elevating Law Firm Financial Performance
Early Adopters Of Legal AI Gaining Competitive Edge In Marketplace
Profit Powerhouse: Elevating Law Firm Financial Performance
It may be a result of the school falling below the Department’s standards of financial responsibility. Each year the Department of Education publishes a composite score of the financial health of institutions ranging from -1.0 through 3.0. A score, greater than, or equal to 1.5 means that a school is financially responsible. Ave Maria scored a -.05 (compared to Harvard, which received a 2.9). The Department’s full list is available here.
Bar Exam Stats also observes that Ave Maria’s student population has declined, but its grant-receiving population has held steady. Fully 71 percent of students are getting grants or scholarships. That said, if history is any guide, a lot of students at Ave Maria have conditional scholarships that the school can yank based on a student’s grades slipping. And what do you know, that’s what happens — a lot — at Ave Maria. Per Law School Transparency, of the 68.2 percent of students with conditional scholarships in 2013-14, 46.6 percent lost their scholarship money, a figure that’s been rising the last several years.
Or maybe it’s because Ave Maria is a veteran of the “getting into trouble with the DOE” process. If you haven’t been following the continuing exploits of the Domino’s Pizza founder, after walking away from the pizza game — if you want to call it “pizza” — he’s been throwing around his billions to build a Stepford community to build the next generation of Dan Brown villains. At the heart of that Catholic utopia is Ave Maria University and its law school — if you want to call it “law school” — outside Naples. To say Monaghan’s educational empire has raised some regulatory eyebrows is an understatement. The Miami New Times recounts the events surrounding the school’s move from Michigan to Florida:
But in the rush to relocate, Monaghan was breaking rules left and right. The new Ave Maria University in Naples wasn’t yet accredited, so admissions and financial aid had to be handled by the Michigan office.
Soon [Former Financial Aid Director Katherine] Ernsting figured out that money and students were being illegally shuffled between the two schools. She warned her colleagues: “I think that could be fraud,” and one complained to the U.S. Department of Education, which opened an investigation.
“They were pulling a lot of shenanigans,” says now-retired DOE investigator Joseph Hajek. “The whole show was run by the one person, Tom Monaghan. Whatever he said went.” Hajek soon began to suspect that federal Pell Grants were being funneled to a campus that Ave Maria had opened in San Marcos, Nicaragua, in 1999.
“There was a lot of money going there, but they couldn’t even prove that the kids were actually going there,” Hajek says. “They would sign someone up, and then they’d be gone.”
Ernsting says Ave Maria officials “thought they could just play dumb and ignore the whole thing.” But she worked hard to gather documents and submitted the key ones to prosecutors.
If holding onto students was a problem, holding onto professors was even trickier:
Sponsored
Document Automation For Law Firms: The Definitive Guide
How AI Is The Catalyst For Reshaping Every Aspect Of Legal Work
[Professor Stephen Safranek] led a September 2006 faculty revolt against the move — and was quickly fired. Then, like Ernsting, he sued. “We had done everything right. We were poised to be one of the best law schools in the country,” Safranek says. “But Monaghan’s greed, his desire to say, ‘Look what I’m going to do; I’m going to create this university in the middle of nowhere,’ ruined it all.”
Is there something wrong with the water in Michigan? Where do these Cooley and legacy Ave Maria people get “one of the best law schools in the country” delusions? Say what you will about InfiLaw, but Arizona Summit isn’t walking around saying “we’ve got Harvard in our sights.”
In any event, Ave Maria now wears the “Scarlet H” for “Heightened Cash Monitoring-1.” Consider it a free lesson in New England Protestantism. If the school wants some unsolicited advice about getting back on the right track, maybe they should look at the guy currently running Domino’s. He was able to make Monaghan’s last business effort halfway decent, maybe he can work another miracle.
Cash Monitoring List Unveiled [Inside Higher Ed]
Ave Maria School of Law on DoE’s Financial Monitoring List [Bar Exam Stats]
Conditional Scholarships [Law School Transparency]
Ave Maria University: A Catholic Project Gone Wrong [Miami New Times]