Surrounded by education advocates and lawmakers, Massachusetts Governor Charlie Baker signed a bill, making it a law requiring universities to share financial data online and inform state officials should they decide to close, apart from other things.
The experts at the Board of Higher Education and the Legislature did a great job of putting the Bill together to ensure that the commonwealth will have access to information as the commonwealth needs answers to ensure that people are protected and won’t be surprised and damaged by lack of available information. This Bill enables educational institutes to take their time and turn themselves around. The lawmakers were confident about protecting colleges and universities throughout the commonwealth but closures would continue due to demographic factors and in the last five years, 18 colleges in Massachusetts have closed or merged.
Early Warning System
When Mount Ida shut in May 2018, parents were wondering what their family would do. Karen Spilka, Senate President, said the bill was meant to prevent other academic institutions from what happened to Mount Ida, without giving employees and students any warning and will avoid closure again, protect enrolled students, their hard-earned money, their families, so that they are not left in the lurch and do not know what to do. The new law requires higher education institutions to notify the State Board of Higher Education if the financial situation deteriorates and the State Board will determine if the college risks imminent closure, with assessment to be done by the Board or by an accrediting agency. If a college is at risk, school officials will inform the Board and prepare a contingency plan for closure, that details how to help students transfer, notify students and faculty, and preserve student records. While screening is confidential, universities must publish an annual financial report on their website. University trustees will be trained about financial and fiduciary obligations and non-compliant institutions are penalised with fines up to $1,000 per day and revocation of a school/college/university’s degree-granting authority.
Transparency about Financial Health of Educational Institutions
House Speaker Robert DeLeo, stated that this legislation protected students, families, and staff of our higher education institutions by increasing transparency about the financial health of institutions requiring increased accountability, oversight, and reporting. But the bill sparked concerns and worries that the screenings may wrongly identify a college as being at risk of closure. The school would be unable to attract students and donors if the information were leaked to the public and could cause its closure. The Board of Higher Education could put a college out of business, by simply alerting the public about the college being put on a financial death watch list.
Experts note that the bill does not identify the process used to identify at-risk schools, and the system may be more susceptible to political influences, if done without transparent published standards. A potential conflict of interest arises as the Board of Higher Education oversees and promotes the state’s public university system. The bill has AICUM backing, which pushed for conditions ensuring confidentiality and permitting independent accrediting agencies to conduct financial screening. The legislation ensures that universities and colleges continue to educate the students, further important research employ local residents, and enhance host communities, AICUM said in a statement.