College Accreditors is a 1.4 Billion Inside Job Scandal

Who’s Regulating For-Profit Schools? Execs From For-Profit Colleges And many of them come from schools that have been under investigation.
“The way the agency commissioners are selected, it stands to reason that an agency that covers what we’ll call at risk schools will have commissioners from at-risk places,” said Susan Phillips, the chair of a Department of Education committee that reviews accreditors.
ACICS allowed Corinthian Colleges Inc. to keep on operating right up until the for-profit college chain collapsed after evidence emerged that the schools had lured thousands of poor students into predatory loans. The accreditor placed a Corinthian campus on its “honor roll” just months before the Education Department forced the school to shut down. A ProPublica analysis also found that schools overseen by ACICS had the lowest graduation rates compared with other accreditors.

We looked at all ACICS commissioners since 2010 and found that two-thirds of them have worked as executives at for-profit schools while sitting on the council. A third of the commissioners came from schools that have been facing consumer-protection lawsuits, investigations by state attorneys general, or federal financial monitoring.

Having the majority of commissioners be industry executives violates no federal rules. The Department of Education only requires a small fraction of commissioners to be from outside the industry, and accrediting agencies of both nonprofit and for-profit schools are largely composed of industry players.

The accreditation process “a giant cesspool of corruption.”

The accreditation process “a giant cesspool of corruption.” Shireman, who has long worked to bolster regulation of for-profit colleges, said the accreditation process “needs to be independent” and not overseen by the industry itself. “It would be like getting the CEOs of the airlines together to review whether the airplanes are safe,” he said.
In June, a Senate Committee called ACICS director Albert Gray before it and subjected him to a series of pointed questions, as the video clip below reveals.
Albert Gray executive director of the Accrediting Council for Independent Colleges and Schools, or ACICS. In a video that’s since been viewed more than 290,000 times on Facebook, Sen. Elizabeth Warren (D-MA) repeatedly challenged the role of Gray and his agency in overseeing Corinthian Colleges, a publicly traded company that closed for good in late April after the Department of Education forced it to start winding down in 2014.3 Similarly, Sen. Chris Murphy (D-CT) told Gray that his defense of ACICS’ actions showed that he was “living on a different planet than everyone else who reviews the track record of Corinthian.”

According to the analysis, one out of every five borrowers at an ACICS-accredited college defaults on his or her loans within three years of entering repayment—a mark that is 50 percent higher than the national average.12 Such high default numbers are particularly troubling because students at ACICS-accredited colleges take out student loans at higher rates and in greater amounts than those at colleges accredited by other agencies.

While ACICS’ performance is worse than that of its peers that provide similar gatekeeping functions, CAP’s analysis suggests that problems with ACICS are emblematic of larger structural flaws that exist in this national accreditation space, which is mostly focused on career education. This is not an arcane policy matter. As the gatekeepers to federal student aid, accreditors’ lax approval standards can open the door to mass fraud that undermines confidence in loan programs and the broader postsecondary education system. The role of accreditation and quality assurance is also likely to be a major topic of discussion in the upcoming reauthorization of the Higher Education Act, as well as the 2016 presidential election. On one side, there are concerns similar to those Sen. Warren raised at the Senate hearing over accreditors’ ability to properly protect consumers.
The College Accreditation Crisis Accreditors, like those of Corinthian Colleges, threaten higher ed by keeping their reviews private.
Secrecy has severe consequences. It allows cabals of private individuals within these agencies to make choices that affect the flow of billions of taxpayer dollars with no accountability or insight into how those decisions are made. It assists the worst educational providers in continuing to indebt students with government money. Left unchanged, it could harm the reputation and credibility of the entire higher education sector, including the large number of high-quality colleges that are doing nothing wrong.
Private colleges, on the other hand, often treat their accreditation documents as if they were the nuclear launch codes. Neither the college nor the accreditation agency is obligated to release them. Only the Western Association of Schools and Colleges, which reviews colleges on the West Coast, has set robust pro-transparency standards. Accreditors often claim that privacy is necessary to allow for reviewer candidness. But in context, this makes little sense. Why should private colleges get more protections for their use of federal dollars than public ones? The federal government has to provide a justification for the decisions it makes with respect to taxpayer dollars, so why shouldn’t accreditors? Sadly, the lack of reliability from the council about making its documents transparent is part of a larger pattern with the agency. After all, 13 state attorneys general and 23 consumer groups have called on the U.S. Department of Education to stop allowing the council to grant access to federal aid because of its poor decision-making history. Twenty-four U.S. Senators raised concerns about the council’s role in evaluating Corinthian Colleges. The opaqueness of the Accrediting Council for Independent Schools and Colleges and most other accreditors jeopardizes the entire system. Accreditation works largely on trust. It requires faith from the public that agencies will be rigorous and ethical judges of quality. Protecting colleges through secrecy can no longer be the priority, and earning back that trust must start with verifying what these bodies actually do.
The Nation’s Largest College Accreditor Faces Deaccreditation Critics say the accreditation process is rigged in favor of for-profit schools.
The U.S Department of Education on Wednesday took a step toward shutting down the Accrediting Council for Independent Colleges and Schools, recommending it not be renewed as an accrediting body later this summer. college accreditation is one of the most fundamental processes in higher education; it determines which schools get billions of federal aid dollars and which schools do not. Some of the people who make those calls work at the Accrediting Council of Independent Colleges and Schools. Founded in 1912 and located in the heart of Washington, D.C., ACICS is the country’s largest national college accrediting agency. The agency has about 40 employees who are tasked with accrediting hundreds of technical and career colleges, including ITT Tech, a career-focused institution that grants degrees in specific fields like nursing, computer science and accounting. Corinthian had received $3.5 billion in federal aid – until two years ago, when it collapsed.
Obama administration has forgiven $171 million owed by former Corinthian students. Corinthian sold 53 of its Everest and WyoTech campuses and online programs to the Zenith Education Group, a new subsidiary of the ECMC Group. The nonprofit will pay $24 million for the campuses, which enroll about 33,000 students. The sale included the forgiveness of $480 million in loans Corinthian students took out from a controversial private lending program the company created. Zenith will also drop a Corinthian requirement that students pursue arbitration before suing over complaints.
ECMC closes deal to buy 53 Corinthian campuses, earning praise from federal agencies and some consumer groups for deal to forgive $480 million in students’ private loans.
How For-Profit Colleges Stay In Business Despite Terrible Track Record
At nearly half of Corinthian’s schools, more than 30 percent of students default on their federal loans within three years of leaving campus, according to the most recent federal data. California last year cited excessively high default rates in denying access to state tuition grants at 23 of the company’s campuses. Over the last three years, attorneys general in eight states and the federal Consumer Financial Protection Bureau have probed Corinthian’s recruitment claims and financial aid practices, raising the prospect of lawsuits. Yet by the reckoning of the accrediting bodies that are supposed to scrutinize Corinthian’s 97 U.S. campuses, its schools are meeting standards on student debt and adequately preparing graduates for jobs. Over the past decade, Corinthian’s schools have remained fully accredited, enabling the publicly traded company to tap federal student aid coffers for nearly $10 billion, or more than 80 percent of its total revenues, according to a Huffington Post review of securities filings and disciplinary records maintained by its accreditors.
The U.S. Department of Education took a step toward shutting down the Accrediting Council for Independent Colleges and Schools by recommending it not be renewed as an accrediting body later this summer. Founded in 1912, ACICS is one of the country’s oldest and largest college accreditors. But it recently came under fire after continuing to accredit campuses owned by Corinthian while the for-profit giant lied about graduation rates and used aggressive sales tactics to recruit students.