The U.S. Department of Education has released data for the 2012-13 academic year that identify 158 degree-granting institutions as failing its financial-responsibility test. All private colleges that award federal student aid must participate in the test, which is based on information from their audited financial statements.
The department develops a composite score on a scale of negative 1.0 to positive 3.0, based on financial ratios that measure factors such as net worth, operating losses, and the relationship of assets to liabilities. Institutions with scores of 1.5 to 3 pass. Those with lower scores are subject to additional oversight and, in some cases, must post letters of credit. The table below shows how 1,880 degree-granting institutions included in the latest analysis fared.