For the past 70-plus years, the federal government has relied on accrediting agencies to serve as gatekeepers to the $120 billion in federal student aid that it awards each year. Legislation set by Congress tasks these independent, nonprofit membership associations with protecting students—and taxpayers—from low-quality and fraudulent institutions. For many students, the bet of a college degree pays off, leading to improved job prospects and higher lifetime earnings; unfortunately, many others end up worse off. For this reason, college can be a gamble. Students must overcome persistently low graduation rates, the need to borrow to cover rising college costs, and attainment gaps by race and income. On top of this, bad actors have deceived and swindled students, leaving them with massive debts they cannot repay and slim job prospects.
Congress needs to take action to ensure that accreditors are helping all students receive a high-quality education that meets their needs. As policymakers begin working to reauthorize the Higher Education Act, they have the opportunity to do just that. With this in mind, the Center for American Progress offers the following recommendations to improve the U.S. accreditation system:
- Require accreditors to focus on student outcomes and equity. Over the past decade, accreditors have come a long way in collecting and considering outcomes on how students fare. All too often, however, accreditors do not use these data to hold colleges accountable when they fail to improve or serve their students well. To help remedy this problem, legislation should require accreditors to collect student outcome data and establish performance benchmarks, using standard definitions set by agencies. Data should be disaggregated by student demographics to ensure that colleges are serving all students well; benchmarks should also focus on quality improvement, with overall target improvement goals as well as steps that seek to remedy gaps in performance by student subgroups.
- Promote greater consistency and standardization in the accreditation process. Inconsistency in basic terminology, timelines, and processes across accrediting agencies creates confusion and raises concerns about the meaning and adequacy of accreditor standards. For example, some agencies use the term “probation” while others use the term “show cause” to describe the final action before a college is at risk of losing its accreditation. And while some agencies use sanctions as a long-term monitoring tool, others use them on a shorter timeline. Consistency in these areas would ensure that all institutions are being held to a high standard of performance and accountability. Legislation should encourage agencies to come together and set standards on terminology, sequencing, and timelines when an accreditor takes action against a college. In addition, greater consistency in the fees that accreditors charge for reviews would allow them to have similar revenue to invest in assuring quality and to guard against schools seeking the accreditors with the lowest fees. Finally, agencies should use consistent definitions to measure and assess student outcomes.
- Strengthen consumer protection through greater oversight of risky behavior. The past few years have been marked by large-scale college failures that have harmed students. Institutions subject to lawsuits and investigations, for example, have misled students by misrepresenting job prospects. Accreditors can and should do more to strengthen standards and address areas where colleges have fallen short. For instance, they should conduct rigorous reviews when colleges change ownership or control; ensure that conversions are made without financial conflicts of interest; review the corporate entity of for-profit colleges, not just individual institutions; and take action when an institution is subject to lawsuits or investigations. Accreditors should also be required to publicize and investigate student complaints, instances where students take legal action against a college, and other state and federal investigations or lawsuits. Legislation should prevent conflicts of interest on accreditor decision-making boards and reviews. Finally, standards should prevent colleges under scrutiny from switching accrediting agencies.
- Bolster financial oversight and enhance student protections for schools at risk of closure. During the past few years, numerous large-scale, precipitous school closures have left students scrambling for answers. In order to help students reach more stable footing, accreditors should work more closely with states and the federal government to ensure that formal plans are in place if a school is at risk of closing. Specifically, with the help of states and the U.S. Department of Education, accreditors should require formal teach-out agreements—not just a plan—for students if an institution presents any risk factors, such as failing financial responsibility scores; being subject to heightened cash monitoring or a letter of credit; lawsuits or investigations; a change of ownership or control; or other potential financial weaknesses. Teach-out agreements—which allow students to finish their degree at another college if theirs closes—should be approved by each member of the triad and include guarantees for students that their credits will transfer, that they will not be charged additional tuition and fees, and that the school meets quality standards and is financially sound.
In the event that an accreditor fails to heed the warning signs, take action, or ensure that an executable plan is in place for students, the agency should be subject to review by the Department of Education and to limitations on its recognition—such as prohibiting its ability to approve new institutions or authorize substantive changes at the institutions it oversees.
- Improve Education Department oversight of accreditors. A recent report from the Department of Education’s Office of Inspector General found that the department’s oversight and review of accrediting agencies fails to ensure that it is only authorizing agencies that meet federal recognition criteria. In light of these findings, policymakers should strengthen the department’s oversight of accreditors through risk-based review of accrediting agencies. Oversight and review should strive for a thorough and independent analysis that includes unannounced visits; third-party information, such as lawsuits and investigations; and student outcome data based on risk factors. Reviews should prioritize the institutional accreditors and agencies that represent the highest risk to students and taxpayers, whereas programmatic agencies should be reviewed with lower frequency than they are today because they oversee only a small portion of total federal student aid dollars. The department should invest more staff and resources in accreditor reviews, ensuring that the staff members work in tandem and incorporate information from the Federal Student Aid office.
The department should also be incentivized to more frequently limit an agency’s recognition when that agency fails to act. Reviews could be further strengthened by integrating the independent advisory committee—the National Advisory Committee on Institutional Quality and Integrity (NACIQI)—as an active participant in review by, for example, providing staff to support its work and giving it the authority to make document requests of agencies up for review. And if NACIQI recommends a stricter sanction on an accreditor than the department, its concerns and reasoning should be addressed and accounted for in any final decision.
- Increase flexibility for accreditors to take action against low-performing schools. For colleges that serve students well, accreditation can be time-consuming and burdensome. Therefore, in order to reward high-performing colleges and reduce red tape, policymakers should implement a risk-based pathway that allows for streamlined reviews when an institution demonstrates a high bar of performance and strong financial health.
This should be paired with a more intensive review of the lowest performers. In exchange for greater focus on low performers, accreditors should receive more protection against lawsuits. They can be, and often are, sued when they exercise their authority to sanction or remove a college’s accreditation, which can be time-consuming and expensive. These legal protections should not completely remove necessary due process rights for institutions but rather prevent attempts to bleed accreditors dry through the courts.
- Increase transparency. Transparency allows for greater insight into and understanding of the accreditation process, thus increasing overall public confidence and trust in the accreditation system and its ability to ensure a high-quality education. To increase transparency, policymakers should create a public database of all final accreditor documents and the histories of actions and decisions—such as changes of ownership or control. As part of this transparency, students should be informed of all accreditor actions, which may include anything from warning or monitoring in the event of financial stability concerns to probations and show cause—the strictest sanctions agencies use before withdrawing a college’s accreditation. Lastly, accreditor decision-making panels should be open to public comment and input.
These policy recommendations would help accrediting agencies better fulfill their duty as gatekeepers to federal student aid. As Congress works to reauthorize the Higher Education Act, policymakers should strengthen accreditation requirements to improve educational quality and to protect students and taxpayers. Accreditors’ stamp of approval on behalf of the federal government should guarantee that the education is high-quality.
Antoinette Flores is an associate director for Postsecondary Education at the Center for American Progress.