Coronavirus Disease 2019 (COVID-19) Information and Resources

Coronavirus Disease 2019 (COVID-19) Information and Resources

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Strategic Initiatives

Financial Assessment & Risk Monitoring

Overview

The Massachusetts Board of Higher Education (BHE) is required by statute and regulation to annually assess the financial information of private institutions of higher education for the purpose of identifying and monitoring institutions at risk of imminent closure, and mitigating the impacts of closures on students, their families, faculty, staff, and the community.

Contact

Alex Nally
SARA Coordinator / Legal Intern
(617) 994-6955
DHE.FARMSubmissions@mass.gov

Duration

2020 – Present

Funding

N/A

Related Data

 

 

Target Populations
Related Initiatives

 

Background

Between 2014 and 2020, 18 colleges and universities in the Commonwealth have closed or merged with other institutions of higher education. In response to the sudden closure of Mount Ida College in 2018, the BHE convened a working group to determine how the Board and Department of Higher Education (DHE) could better serve students of the Commonwealth and mitigate the impact of future institutional closures. The Transitions in Higher Education: Safeguarding the Interests of Students (THESIS) working group first convened in the summer of 2018, and its final report was accepted by the BHE at its January 22, 2019 meeting. Since that time, new legislation has been enacted, and the BHE has promulgated new regulations, both of which build upon the recommendations of the THESIS working group and mandate that the BHE and DHE annually assess the fiscal health of all private institutions of higher education located in Massachusetts to ascertain an institution’s risk of imminent closure and to attempt to minimize the disruption of such a closure to the institution’s constituencies, particularly students. The entire process is referred to as the Financial Assessment and Risk Monitoring (FARM) process.

At its April 8, 2020 meeting, the BHE approved an implementation plan which authorized the Commissioner to move forward with a Memorandum of Understanding (MOU) with the New England Commission of Higher Education (NECHE) and implementation procedures for 610 CMR 13.00. The terms of the MOU, which has since been finalized, provide that NECHE will conduct the financial screenings of those private institutions of higher education which it accredits in accordance with 610 CMR 13.00 and M.G.L. c. 69 § 31B, and it will forward the results of the screenings to the DHE for evaluation and follow-up. The implementation procedures provide additional detail and guidance on certain elements of the FARM process. In addition, the compilation document includes all relevant Board of Higher Education Meeting Minutes, Motions and Presentations related to both THESIS and FARM work in chronological order.

For updates on the timing of the FARM process, please monitor this webpage and contact our office if you have any questions or concerns.

FARM Review Process

PHASE 1

Screening

What?

Private institutions of higher education are screened on an annual basis to identify institutions potentially at risk of imminent closure.


When?

November - April


PHASE 2

Review

What?

Institutions that may be at risk of imminent closure provide any risk mitigation plans to the DHE for review and evaluation.


When?

June - October


PHASE 3

Determination

What?

Institutions not at risk of imminent closure with sufficient mitigation plans continue to be monitored for progress. Institutions without sufficient mitigation plans may be required to develop a contingency closure plan, or notify the public.


When?

November - December (contingency closure plans)
November & Ongoing (continued monitoring)

Public Notifications

Below is a compilation of public notifications related to the financial condition and/or risk of imminent closure of Massachusetts institutions of higher education.

Notifications Issued by the Department of Higher Education

  • Pine Manor College: On April 6, 2020 the DHE issued a joint public statement with the New England Commission of Higher Education (NECHE) and Pine Manor College regarding Pine Manor's financial conditions. The statement provides, in relevant part, that "owing to the impact of the coronavirus (COVID-19), the College's financial situation has become uncertain, such that It cannot confirm that It can sustain full operations at the current levels beyond the current academic year." As noted in the statement, the Department is working with the institution to ensure that, in the event the Institution Is unable to sustain full operations within the next 18 months, students will have opportunities to transfer to another Institution of higher education with minimal disruption to their education. Read the full statement here.

Notifications Issued by Accreditors

Reporting Obligations for Institutions of Higher Education (IHEs)

All private IHEs located and operating in the Commonwealth should also note that the legislature recently imposed two new affirmative reporting requirements. Under the new state law, An Act to Support Improved Financial Stability in Higher Education, St. 2019 c.113, IHEs must:

  1. Notify the Board of Higher Education of known financial liabilities or risks: Pursuant to M.G.L. c. 69, § 31B(b)(1), IHEs must “immediately notify the [Board of Higher Education] of any known financial liabilities or risks that are reasonably likely to result in the imminent closure of the institution or otherwise negatively affect the institution’s ability to fulfill its obligations to current and admitted students.”
  2. This obligation is outside of and in addition to the requirements for financial screening and risk mitigation assessment. Institutions that need to make such a notification to the BHE can do so by emailing the Commissioner at DHE.FARMSubmissions@mass.gov. Such notifications are exempt from public records law and will be maintained as confidential in accordance with state law. M.G.L. c. 69, § 31B(d).
  3. Post annual financial reports, along with a summary: Pursuant to M.G.L. c. 69 § 31B(f), IHEs must “post on its website a copy of the institution’s annual financial report or statement, required pursuant to section 8F of chapter 12 and a summary of the report, however termed, that is written in terms that are understandable by the general public.” The summary should include key narrative descriptions and explanations of the financial statements, such as the Independent Auditor’s Report and Management’s Discussion and Analysis.