Baker University has been removed from the United States Department of Education watch list of institutions struggling financially.
The watch list notification came from the Federal Student Aid division of the Department of Education, and BU administrators contacted the Department of Education after the Baker University Board of Trustees accepted the audit of the university and asked to be removed from the list.
“We notified the Department of Higher Education and said that our trustees have accepted the audit, that our financials have increased … and that we are on target again this year to meet the financial goals of the institution and we asked then, respectfully, to be removed from the list,” Chief Operating Officer Susan Lindahl said.
When on the watch list, the university has to put up a letter of credit supporting 10 percent of its financial aid as collateral. For Baker, 10 percent of the university’s financial aid is $3.7 million. Baker’s letter of credit was also released.
“We didn’t want to be on it to begin with, obviously, but to be able to come off in one year and with as strong a showing, we’re just very grateful,” University President Pat Long said.
Ratios have to be met in order to be off the list, with universities wanting to stay above a 1.5. After the audit, Baker had a ratio of 2.1. Long’s goal would be to move up to a three, which is the highest ratio that can be achieved.
“It sends a positive message that we are on target to reach the goals that we described, that we would reach to all of our partners, whether they’re financial or regulatory, and that we’re committed to do that again this year,” Lindahl said.
University Controller Melissa Van Leiden said part of the problem last year was unrealized losses on investments due to the stock market, and it was remarkable it was such a short period of time that BU was on the list.
“Some of that was out of our control,” she said. “We can’t control how the stock market is going to do.”
Baker administrators will also look at the ratios every month and the Department of Education will re-evaluate the university on a yearly basis after Baker sends in its audit.
“We’re looking at this every single month,” Van Leiden said. “We’re very comfortable that if something does start to happen, we’ll see it, and we can make some adjustments quicker.”
