A troubled college accrediting agency that was disempowered by the Obama administration and given a lifeline by the Trump administration is now under pressure from career Education Department (ED) officials who are urging the Biden administration to reimpose the crackdown.
“This was a long time coming,” Antoinette Flores, director for Postsecondary Education at the Center for American Progress, told Yahoo Finance. “The agency never should have been reinstated. … To me, it was the delaying of the inevitable.”
Accreditation is a key gatekeeping process in higher education financing since only accredited schools can tap on federal funds (i.e. students can take out federal student loans). The Obama administration revoked accreditation powers of the Accrediting Council for Independent Colleges and Schools (ACICS) in 2016, and the Trump administration reinstated those powers in 2018.
Career officials at the ED are recommending that Biden once again disempower ACICS, which was founded in 1912 and presently oversees 73 colleges across the country. In January, career ED staff stated that ACICS “fails to demonstrate compliance” with regulations and that “provides a stand-alone basis for termination.” A senior department official will ultimately make the decision.
If the administration shutters the agency, schools under ACICS-accreditation have to regain accreditation in the following 18 months.
“ACICS has been given second, third, fourth chances, when the law barely allows a second chance,” Clare McCann, an ED official during the Obama administration who is now deputy director for federal higher education policy at New America, tweeted recently. “It's proven itself incapable of, or unwilling to, reform. It has let down students & taxpayers time and time again — we pay the price for its incompetence.”
‘Regulatory bonanza’
In 2016, then-Education Secretary John King cut off hundreds of schools under ACICS’ umbrella off from billions of dollars in federal aid after problems emerged from ACICS’ lax oversight over predatory schools.
At the time, ACICS was reportedly overseeing around 200 colleges that had received $5 billion in federal student aid in 2015. Those schools included now-defunct for-profit chains Corinthian Colleges and ITT Technical Institute.
The schools accredited by ACICS had around 18 months to find another body to accredit them, but nearly half of the schools couldn’t find approval elsewhere and 61 schools closed, according to one report by Flores in 2018.
Trump-era Education Secretary Betsy DeVos, who consistently defended for-profit colleges, reinstated ACICS in November 2018 despite ED career staff telling her that the agency had failed to meet 57 of 93 federal standards. A USA Today investigation in 2020 also exposed a seemingly fake school called Reagan National University that was accredited by ACICS.
DeVos requested a review of ACICS, and career ED staff found that the accreditation agency had “failed to demonstrate that it has competent and knowledgeable individuals, qualified by education and experience in their own right and trained by the agency on their responsibilities, as appropriate for their roles, regarding the agency's standards, policies, and procedures.”
In June 2019, Student Defense and Democracy Forward filed a lawsuit against over DeVos’ actions.
California Attorney General Xavier Becerra, who has also slammed ED’s lacking oversight and accountability measures for-profit colleges, said that this accreditation issue was just one symptom of a bigger problem of the Trump administration’s support of for-profit schools.
In a recent lawsuit against the department earlier this month for issuing rules which will “substantially ease federal oversight of for-profit schools,” Becerra argued that DeVos’ ED had provided a “regulatory bonanza to for-profit schools in the waning days of the Trump administration.”
Debt relief for borrowers?
Stripping ACICS’ authority may possibly result in some debt relief for students if their school ends up unaccredited and eventually closes permanently further down the line.
McCann, who was previously an official at ED during the Obama administration and is now at New America, noted that if an ACICS-accredited school ends up closing permanently, graduates and current students could seek debt relief through a closed school discharge.
There currently isn’t debt discharge eligibility for borrowers who attended a school that lost accreditation, other than the closed school discharge, which again only applies to shuttered schools.
But some consumer advocates recommend that the Biden administration should seriously consider cancellation for graduates of schools that lost accreditation.
“The Education Department has a role to play to ensure schools are doing their job,” Persis Yu, a staff attorney at the National Consumer Law Center, told Yahoo Finance. “The department has allowed students to be harmed, and there should be some recourse.”
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Aarthi is a reporter for Yahoo Finance. She can be reached at [email protected]. Follow her on Twitter @aarthiswami.
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