Ave Maria University, Law School at Opposite Ends of Financial Strength Rankings
Published on Thursday, 12 August 2010 03:45
The U.S. Department of Education has released its latest assessments of the financial strength of all colleges and universities that accept federal student aid, and the results for Ave Maria University and the Ave Maria School of Law are significantly different.
Ave Maria University has received the highest possible score for the last three years for which the department has released data, the most recent year being the fiscal year ending in June 2009. The law school has had among the lowest scores during the same time period, although the data analyzed by the department did not include the law school's finances after it moved to Florida last fall.
The law school's assessment means that it will continue to be subject to additional financial oversight and is required to post a letter of credit equivalent to 10 percent of the amount of Title IV aid it used in the most recent year.
The education department requires all colleges and universities who participate in its student aid program to submit audited financial statements each year to demonstrate that they are maintaining standards of financial responsibility that the department believes are necessary to participate in the Title IV programs. The department looks at financial reserves, assets and net income and determines what it calls a "composite score" that ranks institutions on a scale of -1.0 (lowest) to 3.0 (highest).
Ave Maria University's composite score for all three years is 3.0. The law school's scores were -.9 for the fiscal years ending in 2009 and 2008, and -.4 for the year before that. A passing score is 1.5 and above.
Eugene Milhizer, dean of the Ave Maria School of Law, said in a statement that the relocation to Naples has "already enhanced recruiting and fundraising efforts." He said the scores "should not be a cause for concern" and attributed them, in part, to the fact that the law school has a low asset-to-debt ratio, which he said is typical of recently-founded institutions.
"We fully anticipate that this situation will reverse itself over time, as we increase net tuition revenue and build endowment," Dean Milhizer said.
The Department of Education says that the composite financial score is not a reflection of the quality of education at a given school or that it is in danger of closing, but it does require that schools with scores below 1.0 agree to additional financial reporting, financial aid monitoring and administrative oversight.
This is the first year that the department has made all the scores available to the public. They are posted on the department's website here.
The Chronicle of Higher Education has a report on the national picture here, showing that a total of about 150 private non-profit schools failed the most recent financial-strength test.