Education Department Recommends Killing Accreditor of For-profit Colleges

By Annie Waldman, ProPublica

A much-criticized college accreditor that regulates hundreds of for-profit schools should have its oversight powers terminated, a U.S. Department of Education staff report has recommended.

There are several more steps before the government could actually strip the Accrediting Council for Independent Colleges and Schools of its authority. But the department’s unprecedented recommendation may mark the beginning of the end for ACICS.

“ACICS has had extensive and pervasive deficiencies in a wide range of accreditation standards over the previous five years,” an Education Department official requesting not to be named said earlier today in a call with reporters.

“These were not narrow misses,” said the department official. “These were quite severe, quite egregious, irreparable mistakes that they had been making over a long period of time.”

ACICS has faced heightened scrutiny over the past few months for the strikingly poor outcomes of the colleges it accredits.

ProPublica has reported that colleges accredited by ACICS have the lowest graduation rates in the country and their graduates struggle the most to repay their student loans.

Citing our reporting, Sen. Elizabeth Warren (D-Massachusetts), more than a dozen state attorneys general, and numerous consumer protection groups have called on the government to sanction the accreditor for its failure to provide effective oversight.

Today’s report lists 21 citations questioning ACICS’ capability to ensure colleges are providing students with a quality education. The report specifically cited the accreditor’s inability to evaluate and ensure the accuracy of student achievement measures and to properly enforce actions against problematic schools.

Study Time - Jazmin Quaynor

“ACICS takes the Department’s final staff report and recommendation very seriously,” said ACICS’ top executive Anthony Bieda in an emailed press release. “The recommendation to deny recognition is disappointing, and must be addressed directly and decisively by the Board and senior management of the agency.” (Read the full statement.)

Accreditors are supposed to ensure the quality of a college and the stamp of approval grants a college’s students access to federal aid programs. Losing accreditation can be a deathblow for schools, particularly for many for-profit colleges that rely on federal aid for most of their revenue.

Today’s report also called out ACICS for not doing an adequate job at monitoring potential conflicts of interest among its board members.

As ProPublica reported, two-thirds of ACICS commissioners, who make the ultimate decisions on a school’s accreditation, had worked as executives at for-profit schools while sitting on the council. And a third of the commissioners worked at colleges facing government scrutiny and consumer protection litigation while they were sitting on the council.

Following recent criticism, ACICS announced that it would stop accepting new applications for accreditation while it imposed reforms, including the creation of a new committee to monitor potential conflicts-of-interest among its commissioners.

Many of the ACICS’ critics point to the stunning collapse of for-profit chain Corinthian Colleges, which ACICS continued to accredit up until the day the school declared bankruptcy. Despite numerous ongoing lawsuits and investigations into the school’s predatory and misleading tactics, ACICS did not publicly sanction the college or revoke its accreditation, preserving the college’s access to billions in federal student aid.

ACICS currently oversees about 240 institutions2013the majority of which are for-profit schools. Colleges accredited by ACICS received nearly $5 billion in federal student aid last year.

ACICS accredits one of the largest for-profit colleges in the country, ITT Technical Institute, which has over 40,000 students at more than 130 campuses.

In its most recent regulatory filings, ITT said that if ACICS loses its federal recognition, it would have negative implications for the company.

“We cannot assure you that our campuses could obtain accreditation by another recognized accrediting agency within that time-frame,” the company wrote. ITT received nearly $800 million in federal aid in 2013 school year alone.

“We continue to monitor the ongoing developments with ACICS,” said an ITT spokeswoman, Nicole Elam, in an emailed statement. “However, we remain focused on the best interests of our students,”

Education Department officials said that they are analyzing the potential impact a decision to terminate ACICS’ recognition would have on colleges and students.

If ACICS lose its oversight power, schools will have 18 months to find new accreditation to preserve their access to federal student aid. The colleges would also have to meet the quality standards of other accreditors, which for the most part, are more stringent than ACICS.

A Department of Education accreditation committee is scheduled to review ACICS and hear testimony from its executives on June 23.

Correction, June 15, 2016: An earlier version of this article listed an incorrect date for when the Department of Education accreditation committee is scheduled to review ACICS. The meeting is scheduled for June 23, not June 24.

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