Feds propose shutting down big for-profit college accreditor

AP News
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Posted: Jun 15, 2016 6:03 PM

BOSTON (AP) — The U.S. Department of Education proposed on Wednesday to shut down the nation's largest accreditor of for-profit colleges, a rare move that could put dozens of schools at risk of losing federal funding.

The recommendation from the department's staff would sever ties with the Accrediting Council for Independent Colleges and Schools, a national group that oversees 900 campuses and wields the seal of approval that colleges need to receive federal aid. The group has been under intense scrutiny after critics, including attorneys general in 13 states, accused it of overlooking deception at some schools.

Anthony Bieda, the council's chief, said it takes the education department's recommendation "very seriously."

"The recommendation to deny recognition is disappointing, and must be addressed directly and decisively by the board and senior management of the agency," he said.

The group was up for a routine review this month after last passing federal inspection in 2013, but this time federal officials said they found major problems with its standards.

A 27-page report slammed the council's handling of institutions like the now-defunct Corinthian College, a chain of schools that continued to receive accreditation even as it was being investigated for fraud.

It also blamed the council for failing to stop schools from falsifying data about the success of students, failing to stop misleading recruitment tactics and failing to punish schools that employed those practices.

"Its monitoring regime appears insufficient to deter widespread misconduct regarding placement, recruiting and admissions," according to the report.

The recommendation is only the first step in a broader process to decide the council's fate. Next, a bipartisan advisory committee will issue its own proposal before top education officials make the final decision. The council's leaders said they plan to make their case to the advisory committee at its meeting next week.

By attempting to revoke the council's authority, the Education Department is taking the strongest action it can against an accreditor. Education officials could recall only one other time when they had recommended a shutdown.

If the council is forced to close, its schools would have 18 months to find new accreditors or lose access to federal funding, the top source of revenue for most for-profit colleges. The council's schools received $4.7 billion in federal aid last year.

Some of the council's critics celebrated the recommendation, saying it's a sign that the Education Department is taking a firmer stance against accreditors.

"This decision sends a strong and unambiguous signal that accreditation must do a better job acting as a gatekeeper to federal funds," said Ben Miller, senior director for postsecondary education at the Center for American Progress, a liberal public policy organization in Washington, D.C.

Massachusetts Attorney General Maura Healey, who led a push against the council, urged the department to follow through on its recommendation.

"We have no time to waste when it comes to ensuring a quality, affordable education for students, and providing the regulatory oversight these schools so desperately need," she said in a statement.

But some warn that closing the accreditation group could bring unintended consequences.

Terry Hartle, senior vice president of the American Council on Education, a group representing the heads of colleges and universities, said it could take more than 18 months for some colleges to gain accreditation elsewhere. If they miss that deadline, schools and their students would be ineligible for federal financial aid, but students would still be responsible for existing federal loans.

"It's going to set off a mad scramble for the schools to find a new accreditor," Hartle said. "There could be a significant number of students who find themselves caught up in this as well."

The Education Department's advisory committee will meet next week to take up the next step of the process. Any decision could be challenged in federal court.