Staying with the Story
The Springfield News-Sun broke the news first of Urbana University’s acquisition by Franklin University last year. The News-Sun provided the most extensive coverage of the events that led up to the acquisition and will continue to follow how the change affects residents, students and jobs in Champaign County.
By the numbers
128 — Acres on Urbana University campus
600 — Estimated campus-based undergraduates, fall 2014
$22,012 — Average undergraduate tuition and fees
1850 — Year Urbana University was founded
Source: Urbana University
Urbana University is one of 16 Ohio colleges and universities placed on federal financial aid watch list, flagging it for additional scrutiny.
The U.S. Department of Education list released last week includes a total of 560 colleges and universities worldwide that are on “heightened cash scrutiny,” according to Ted Mitchell, under secretary of education for the federal agency.
Urbana leaders acknowledged the university is included on the list, but said the status was based on data gathered before Franklin University acquired the Champaign County school last spring.
“Subsequently, steps have been implemented to correct the situation to position Urbana to operate in a manner that allows the university to provide federal funding with confidence that all financial obligations can be met,” according to a statement released by the university.
The list itself isn’t new, but has been released to the public for the first time as the agency takes “another step to increase transparency and accountability,” Mitchell said.
Heightened cash monitoring is a step the federal agency’s Student Aid Office can take to provide additional oversight for financial and federal compliance issues, including Pell Grants and other forms of student aid, said Todd Jones, president of the Association of Independent Colleges and Universities of Ohio.
“Heightened cash monitoring is not necessarily a red flag to students and taxpayers, but it can serve as a caution light,” Mitchell said. “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.”
Simply being on the list doesn’t mean students will notice any impact, Jones said.
“It obviously affects how the university is using its funding but nonetheless that doesn’t mean it is affecting student services,” he said.
Franklin stepped in to purchase Urbana last spring after it struggled with years of lean enrollment, as well as a handful of failed business decisions as the economy soured during the Great Recession. Franklin, a private nonprofit institution based in Columbus, has operated in the black for years. Officials there have previously said they believed they could benefit by extending into a new market and providing services to a more traditional student base.
As part of the deal, Urbana functions as a division of Franklin, but retains its name. Athletic teams also retained their affiliation with the NCAA.
Local leaders in Champaign County have said saving the college was critical because it employs more than 400 area residents and has a roughly $31 million annual impact on the region.
Franklin has since invested millions to upgrade the 128-acre campus, including renovating dorms, paving roads and upgrading technology.
“While Urbana was placed on HCM1 status, this status was predicated on outdated data and conditions that occurred prior to the Franklin acquisition,” Urbana officials said in the statement.
Other area institutions on the list include Wilberforce University, Fortis College in Centerville and Antonelli College in Cincinnati.
The U.S. Department of Education can also place limits on how colleges and universities can draw down federal funds to ensure the sites can remain open and continue to serve students, Jones said.
For example, the agency can withhold funds for Pell Grants for a few weeks to institutions under heightened cash management to ensure students are staying on campus and the college can complete the semester.
Entities can end up on the list for a variety of reasons, including simply not filing the proper paperwork on time. Some institutions are also on the list, but are not disclosed because they are in a dispute with the federal agency over whether they should be included.
“This is simply really a cash monitoring system,” Jones said. “It does it to make sure the institutions are not at risk of running out of money or mishandling money, or in some cases looking for fraud.”
Jones was not aware of the specifics of Urbana’s financial situation, but agreed that it arose before Franklin’s acquisition.
“One of the things Urbana is doing is unwinding the debt situation it had gotten itself into,” Jones said. “The Department doesn’t let you out of that even if you have fixed your problem, so to speak, until some time has passed to show you are still moving toward recovery.”
While he was aware of the list, there hasn’t been an impact on students, said Josh Brown, president of the Student Body Association at Urbana. Franklin’s acquisition has already been beneficial to students, in the form of new technology and renovations to the campus, he added.
“It’s been great with Franklin coming in,” Brown said. “They’ve paved the roads and made improvements on campus, and there’s a more optimistic outlook for the future of Urbana.”
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