Education Dept. Revokes Recognition Of Troubled Accreditor Of For-Profit Colleges

Image courtesy of MeneerDijk

The accrediting body responsible for holding a large number of for-profit schools accountable — including the recently shuttered ITT Tech, and the now-bankrupt Corinthian Colleges — received some bad news this week. The U.S. Department of Education has terminated its federal recognition. 

The Accrediting Council for Independent Colleges and Schools (ACICS) is the largest accreditor in the U.S. and is itself a non-profit, but many of the schools it provides accreditation to are for-profit institutions.

The ACICS came under increased scrutiny after the collapse of Corinthian Colleges in 2015, with regulators asking how the accreditor missed apparently obvious red flags. If ACICS had pulled CCI’s accreditation, it could have stopped billions in federal aid money going to these schools.

In June, Education Dept. staff and an advisory panel each voted in favor revoking ACICS’s accreditation. That decision has now been finalized by a Department of Education senior designated official, was made based on findings that the organization failed to properly monitor and discipline the colleges it oversees.

In a letter [PDF] to ACICS, the Dept. of Education official said she considered ACICS’s petition to keep recognition, as well as reports and transcripts of meetings between the Dept. of Education and the accreditor during its review.

The Dept. of Education’s staff report found numerous issues on ACICS’ part, including failing to address how well graduates of its accredited institutions succeed on licensing exams, failing to provide documentation of schools’ relationship with licensing related entities, and failing to clarify and document its entire process for the recruitment, selection, and verification of the qualifications and experience possessed by those selected to serve on the agency’s evaluation teams and decision-making bodies.

“Having reviewed the record before me, I concur with the recommendations of Department staff and NACIQI,” the letter states. “Accordingly, I am terminating the Department’s recognition of ACICS as a national recognized accrediting agency.”

In all, the senior official, who had 90 days to make a decision on the accreditor’s future, found that ACICS was in violation of numerous regulatory criteria. Specifically, it was out of compliance in 21 areas. Under the law, an accrediting agency that is out of compliance cannot have its recognition renewed, the official writes.

While agencies have 12 months to come into compliance, reports from the Dept. of Education found that ACICS could not remedy many of the serious deficiencies in that time frame.

ACICS has 30 days to file an appeal directly with Dept. of Education Secretary John King.

Still, a reprieve for ACICS appears unlikely, as several consumer advocates, lawmakers, and even DOE staff, have pushed for the agency to lose its recognition. 

By revoking ACICS’ recognition, the 243 schools that have received its accreditation will have 18 months to find a new accreditor and remain eligible for federal student aid programs, the DOE said in a FAQ.

In the case that a school can not find another accreditor, students would no longer be able to use their federal aid at those schools.

“Students who want to continue their education using federal loans or grants past that point would need to transfer,” the Department says. “Schools also need to have a plan in place to inform students about their options so students are not left scrambling.”

Over its history, ACICS has accredited 725 different institutions, and currently accredits 243 institutions, according to a previous report from the Center for American Progress. Most of these schools are for-profit colleges.

Without this accreditation, schools cannot receive federal student grants and loans.

CAP’s report [PDF] found that 17 institutions, campuses, or corporate entities under investigation by the federal or state government received accreditation from ACICS, taking in more than $5.7 billion in federal funds over the past three years.

When compared to campuses receiving accreditation from the top five national companies, ACICS’s institutions have the worst graduation rates, the lowest rate of students repaying their student loans, and the second-worst student loan default rates.

Issues for ACICS came to a head in this spring.

In June, Massachusetts Senator Elizabeth Warren published a report related to the DOE’s accreditation practices and the failures of ACICS. Warren urged the Dept. of Education to take “strong, aggressive” action against the accreditor, pointing to ACICS’s “dismal record of failure,” including its repeated accreditation of schools operated by the now-defunct Corinthian Colleges Inc., in spite of evidence of obvious shortcomings and problems at these colleges.

Prior to that, California Attorney General Kamala Harris also sent a letter to the DOE urging it to revoke federal approval from ACICS.

With the letter, Harris expressed support for 13 other state Attorneys General who previously voiced their concerns over the renewal of ACICS as an accreditation agency.

ACICS attempted to show it was able to do its job properly in August, when the agency revoked the accreditation for troubled for-profit operator ITT Technical Institutes. The move resulted in the Dept. of Education banning the college from enrolling new students using federal financial aid. Within two weeks, the school had shut down, leaving nearly 40,000 currently enrolled students scrambling to finish their education or received federal student loan discharges.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.