Institutions of higher education receive nearly $100 billion in state and local funding each year. Given the enormity of this public investment at the state and local levels, not to mention the additional $120 billion in federal financial aid funding provided to these institutions, officials at all levels of government should be interested in ensuring that colleges and universities are “financially responsible” and have the ability to manage these public dollars well. Unfortunately, the composite scores used by the Department of Education to assess financial responsbility have important flaws and have failed to identify schools at risk of financial collapse.

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