In March 2024, the U.S. Department of Education concluded a new round of negotiated rulemaking sessions on program integrity and institutional quality. These sessions—colloquially known as “neg reg”—are the process through which members of the department and affected interest groups and communities negotiate the terms of proposed department rules. Few topics drew as much attention during these sessions as the federal recognition of accrediting agencies—the agencies that are entrusted with evaluating and assessing whether institutions and programs meet acceptable levels of quality.
Accrediting agencies play an important consumer protection role in higher education: as part of their evaluation process, accrediting agencies review institutional and programmatic compliance with the standards set forth by the agency as well as by the accredited institutions themselves to determine whether an institution or program is high-quality enough to provide value to enrolling students. Accrediting agencies are further responsible for protecting students and taxpayers by serving as gatekeepers to the Title IV federal financial aid program; failure in this mission would allow low-quality programs and institutions to continue enrolling students using taxpayer funds.
With accrediting agencies holding such responsibilities, it is important that they themselves also be periodically reviewed. And so, at least every five years, the Department of Education evaluates accrediting agency standards and gleans information from site visits and the general public to determine whether the accrediting agency should have continued recognition. Accreditors that demonstrate their ability to consistently apply and enforce standards, including those that focus on student achievement, generally maintain their federal recognition. And when an accreditor fails to meet the operating procedures as outlined in the Higher Education Act, they risk losing their federal recognition.
This year, the Department of Education presented at the neg reg several proposals to improve the consumer protection aspects of college accreditation. Unfortunately, the negotiators failed to reach consensus on any of these proposals, leaving it up to the department to draft a Notice of Proposed Rulemaking (NPRM) that appropriately addresses student achievement standards, protects students from underperforming institutions and programs and safeguards taxpayers.
What Was Discussed during the Negotiated Rulemaking on Accreditation?
The Department of Education is statutorily required to convene stakeholders to provide ideas and opinions on proposed rules before it can revise federal regulations. Constituencies represented among negotiators during the 2024 rulemaking included consumer advocates, veterans, civil rights groups, financial aid administrators, legal assistance organizations, state officials, student loan borrowers, representatives from two- and four-year institutions, representatives from accrediting agencies, and more.
In recent years, the Department of Education has made increasing the rigor of accreditation a key priority. Calls from stakeholders for stronger institutional accountability and robust consumer protections have grown louder, and to address them, the department introduced a slate of proposals aimed at strengthening accreditation. The 2024 rulemaking included significant discussion about how accreditors should treat schools that face sanctions from an accreditor, such as probation, when the school is undergoing a “substantive change” such as adding a new program, location, or degree level. The rulemaking sessions also reignited longstanding debate over the legislative intent and definition of terms such as “effective” and “enforce” in the regulatory context. Across the three sessions, the department revised proposed regulatory text based on insight from the negotiations. For example, in the final session, the department proposed changes that would require agencies to set their own minimum expectations for student achievement measures.
Several of the topics addressed in the proposed regulatory text mirrored policy and process recommendations proposed by a bipartisan National Advisory Committee on Institutional Quality and Integrity (NACIQI) subcommittee in August 2023. These included addressing conflicts of interest and increasing transparency, strengthening student achievement standards, and introducing risk-based review of accreditors and institutions.
Proposals to Increase Transparency and Address Conflicts of Interest
One of the challenges the Department of Education attempted to address during the negotiated rulemaking was the need for greater transparency into the accreditation recognition process to increase the public’s understanding of and trust in the accreditation process. For example, one way the Department of Education seeks to preserve transparency and the public interest is by requiring public members to serve on accrediting agencies’ governing boards. Public members offer unique insights and perspectives particularly because they are meant to be unaffiliated with the institutions or programs overseen by the accreditor. In this way, they can play a key role in democratizing the accreditation process. Advocates have long held that the existing regulatory restrictions on conflict of interest are too vague and, as a result, a number of people, including consultants and individuals who previously represented schools on commissions, may still be considered public members. This is significant, because public members should contribute unbiased perspectives with a mind on consumer and public interest. Public members should bring with them fresh views and new ideas so the same continuous improvement accreditors want to see from institutions exists on their own boards as well.
The Department of Education proposed revisions to current regulations that would enforce stricter requirements for accrediting boards’ public members. Public members could not be: current or former employees, members of the governing board, owners, shareholders of, or consultants to accredited, preaccredited, and applicant institutions or programs; current or former members of any trade association or membership organization related to, affiliated with, or associated with the agency; current or former employees of, or consultants to, the accrediting agency; or members of the program integrity triad (state authorizers, accrediting agencies, and the department).
The proposal prompted discussion about whether this restriction was overly broad and whether it should apply just to the persons falling within the aforementioned categories or their families as well. Some negotiators expressed concerns that imposing such limits would unintentionally erode board quality by barring those with the most experience in or knowledge of higher education. Given the complexity of accreditation, it can take significant time and training to understand, making it difficult for boards to recruit members that represent the public interest.
Thankfully, it is not necessary to sacrifice independence for knowledge of the higher education ecosystem. Public members with a strong background in educational advocacy and those from private industry, for instance, can help to eliminate blindspots and reduce groupthink among accrediting boards. For example, one accreditor, the Accreditation Council for Pharmacy Education (ACPE), which oversees all Doctor of Pharmacy programs in the United States, has a board composed primarily of representatives not affiliated with the accredited schools.
The Department of Education’s proposal also included a measure to increase transparency by addressing long-standing concerns about the lack of information available to the students and taxpayers. Under the proposed rule, accreditors would be required to post materials that they submitted to the department for review to their own websites so that the public can see them. This greater transparency would not only build public trust, but also would help researchers, regulators, consumer advocates, and the media better understand the accreditor recognition process and identify bad actors. Greater access to information would also improve students and families’ decision-making by presenting data on agency policies, investigations, and applications. More accessible data, coupled with additional department proposals that would improve the reliability of student success data institutions use during accreditation reviews, would go a long way in supporting students and building a culture of true accountability.
Proposals to Strengthen Student Achievement Standards
Over the years, many advocates across the higher education landscape have increasingly called for the use of student success metrics to gauge institutional success, including metrics such as completion rate, retention rate, earnings for completers and non-completers, and federal student loan default rate. Some accreditors already use such metrics. Among programmatic accreditors, for example, an institution’s failure to meet certain multi-year licensure examination passage rates can result in sanctions. Several large accrediting agencies including the former regionals also collect data on and set standards related to student outcomes, but this information isn’t always considered when evaluating whether an institution should be accredited.
At the same time, many advocates have also raised concerns about how using student success metrics measures can inadvertently harm institutions that are simply trying their best to educate and support students in any way they can. For example, community colleges may report low graduation and high transfer rates as a result of students completing prerequisite courses and transferring to bachelors degree granting institutions without first completing an associate degree. Some have similarly pointed out that the focus on repayment and default rates as value indicators may be more difficult given the prevalence of forbearance, deferment, and repayment program options.
While some outcomes, such as cohort loan default rate have become a less reliable barometer for institutional performance and return on investment, other performance data can be used to help accreditors determine a program’s value. For example, accreditors could set thresholds for institutions regarding their graduates’ federal student loan debt as a percent of earnings.
During the 2024 negotiated rulemaking, the Department of Education proposed a requirement that accreditation agencies set minimum performance standards, or, if they are unable to, explain why minimum expectations are not required and identify other means of enforcing standards. The department is constrained by statute from setting outcome metrics for agencies to use. Entrusting the accreditation agencies to set their own standards enables each agency to conceptualize student achievement in a way that makes sense for the agency and its approved institutions. Accreditors could even consult institutions across sectors to create individualized student achievement standards for each institution based on their previous performance and student population. These alternate measures would also assuage concerns from specific sectors and institutional types about how outcomes-focused accreditation could unintentionally penalize them for forces out of their control. Above all else, the department should establish common definitions for student achievement and improve the quality of data collection and its reporting among accrediting agencies.
For decades, higher education researchers have struggled to establish common definitions and appropriate measures for student achievement, and so discussions of this topic during the session were particularly fraught with disagreement. Questions around the reliability of data and whether efforts to impose strict standards would create a race to the bottom continued to plague both sides of the aisle. While accreditors are required to consider the mission of an institution in applying student success and outcomes standards, there are no limitations on their ability to be innovative in their quest to ensure educational quality. Accrediting agencies could, for example, set an individual student achievement threshold per institution. Attempts to impose even minimum standards faced fierce opposition, and the rulemaking committee failed to reach consensus on the proposed accreditation regulations with institutional and accreditor representatives voting against them.
Proposals for Risk-Based Review of Institutions and Accreditors
The Department of Education recognizes more than sixty institutional and programmatic accrediting agencies. These agencies undergo review by department staff and NACIQI members at least every five years. Unfortunately, the department’s process for evaluating and recognizing accrediting agencies does not adequately assess how well accreditors ensure quality and protect students and taxpayers. As a result, the department sometimes maintains recognition of accreditors despite their failure to address consistently low retention and graduation rates and patterns of predatory behavior or fraudulent activity. One way to strengthen the system would be for the department to allocate more of its time and resources to evaluating high-risk accreditors (for example, accreditors of institutions with poor student outcomes or facing allegations of consumer protection violations) and less of its time and resources on lower-risk accreditors.
At the start of the 2024 neg reg, the Department of Education asked negotiators to consider a new model for accrediting agency review wherein the lowest-risk agencies would be subject to less frequent reviews and more narrowly focused reviews than higher-risk agencies. During negotiations, several representatives of students and consumer protection organizations also proposed that accreditation agencies themselves be required to establish risk-based review policies for their approved institutions. For example, accreditors could be required to investigate an institution following a negative action by a state, the federal government, or another accreditor to see whether they should also act. (The department revised its proposal to include this requirement.)
What constitutes “risk” in “risk-based review”? Accreditors are already well-attuned to tracking an institution’s financial management, but there are many other things that accreditors could consider as well, including poor student outcomes, weak academic performance, and bad actors in the form of college operators that place profit over people—all of these things pose significant risk to students and taxpayers, and so institutions that have red flags in these areas should be subject to swifter and closer scrutiny. And, just as institutions with weaker student outcomes warrant a more careful review than schools that consistently produce strong returns for students, accrediting agencies who count a large portion of underperforming institutions among their ranks, or that represent the greatest risk to taxpayers because of their large portfolio of institutions participating in the student aid programs, should also face heightened scrutiny. Accreditors should be evaluated on how well, if at all, they protect students and taxpayers by examining their response to concerning outcomes and institutional behavior. A risk-based accreditation review process would ensure that the Department of Education could allocate more considerable time to examining those accreditors responsible for underperforming programs and poor student outcomes. Determining which agencies warrant a full review could be fairly straightforward, with accreditors that receive high Title IV volume, have high rates of compliance issues, or a disproportionate number of complaints relative to their size undergoing more frequent or more extensive review than lower-risk accreditors.
One example of the kind of accreditor that might warrant more exhaustive review under a risk-based review system is the Council on Occupational Education (COE), which is responsible for accrediting institutions with over 500 locations and more than 120,000 undergraduate students. COE was required to submit a compliance report at the February 2024 NACIQI meeting based on its failure to meet standards and investigate allegations of fraud at Florida Career College (FCC). (COE would eventually place FCC on “Apparent Deficiency” status—the lowest sanction the accreditor offers—but this action proved too little, too late.) It should be noted, that accreditors have very little incentive to assign the harshest penalty, loss of accreditation, to the institutions they accredit because these institutions are paying members and when the institution loses its accreditation, the agency loses that institution’s membership dues in addition to opening themselves up to potential litigation and the related legal time and costs.
Several comments from NACIQI members and the general public cited the COE’s failure to provide adequate oversight of FCC as a reason the agency should lose Department of Education recognition. Accrediting agencies that lose federal recognition leave the institutions or programs they accredit without access to federal student aid, potentially depriving them of the funding needed to continue operating. The department conducted its own investigation and found that FCC interfered with ability to benefit (ATB) tests that govern when students without high school diplomas or an equivalency can receive federal student aid to ensure students passed. These violations also constituted a failure to meet the fiduciary standards or comply with Program Participation Agreement (PPA) standards. FCC voluntarily withdrew its accreditation and subsequently closed in February 2024. While FCC engaged in a troubling pattern of abuses, it is far from the only institution with serious deficiencies that received low level or no sanctions from their accreditor. Not only did this behavior go unchecked, the failure to withdraw accreditation or otherwise sanction FCC allowed the college to take in more than $85 million in federal student aid dollars in a single fiscal year. The actions of FCC should have given COE cause to initiate a swift process of close scrutiny; similarly, COE’s inability to act more swiftly in FCC’s case should itself have triggered COE’s own review by the department.
While COE may be considered a high-risk accreditor due to its failure to effectively monitor and evaluate FCC, there are several other accrediting agencies which haven’t drawn the ire of the federal government or the public. While the Department of Education recognizes several “programmatic” nursing and nurse education accrediting agencies, five state agencies and accrediting bodies are also recognized for the approval of nurse education. Institutions and programs cannot use their accreditation by a state agency for the approval of nurse education to establish eligibility for participation in federal student financial aid programs. Nursing boards differ from other accrediting agencies in that their focus is on public protection and enforcement, which also gives them certain powers including the ability to investigate and close programs independent of any other body. With state agencies generally drawing fewer complaints or public comments during NACIQI and the fact they do not serve as gatekeepers for federal student aid, state nursing agencies would certainly qualify as low risk.
The Department of Education is also looking to protect students at institutions undergoing substantive changes; that is, those institutions looking to add a program, campus, or degree level. Under the department’s proposal, institutions on probation—one of the most serious sanctions—would face a stricter review when they want to make substantive changes, taking away the ability of the accreditor alone to sign off on the changes.
Over time, institutional and programmatic compliance has come to consist of a series of checklists instead of a nuanced system where acceptable levels of student success and other performance metrics are prioritized. A new model for review should include measures of institutional or programmatic improvement as well as student learning outcomes and the external factors that affect them. During the peer evaluation process, institutions with poor outcomes and the accrediting agencies that oversee them are the ones that need a more careful (and critical) review than accreditors with stronger track records. Likewise when accreditors are seeking continued recognition from the department, they should be evaluated based on how effective they are at identifying and assessing risk.
The department and accreditors should use all tools and data available to make determinations about which accrediting agencies receive continued recognition and which institutions have access to the federal aid system. When assessing risk, the department and accreditors should consider student complaints as well as allegations of predatory behavior uncovered through government investigation, litigation, or the press. This includes not just the cumulative number of complaints, which may be indicative of systemic institutional failure, but also the source of those complaints.
Calls for the strengthening of accreditor oversight are not new. A decade ago the GAO highlighted how rarely accrediting agencies impose sanctions on institutions and recommended the department incorporate accreditor sanctions into annual risk review as well as suggesting they prioritize sanctioned schools for program review. Still even today, very few institutions receive sanctions, giving the impression that the system is working perfectly with most schools meeting all accreditation standards year after year. Accreditors have been reluctant to penalize institutions that demonstrate that they don’t center students’ interests. And when accrediting agencies do take action, it often isn’t as swift as students or the public would prefer.
When reviewing institutional compliance, accreditors place great emphasis on financial management especially when compared to other standards as fiscal issues are easier to document and more objective. Accreditors are generally willing to take punitive actions like sanctions against institutions with failing financial responsibility composite score indicating a risk of insolvency or schools that have been placed into “heightened cash monitoring status” by the department which indicates a risk of financial insolvency or financial mismanagement. What if accreditors placed as much value on a school’s record of student success and mobility as they do on an institution’s financial solvency? While institutions under heightened cash monitoring and those experiencing financial distress and mismanagement pose a significant risk to students and taxpayers, institutions that overpromise and under-deliver can also leave students worse off than if they never pursued postsecondary education at all.
Looking Ahead
The negotiators’ failure to reach consensus during the 2024 negotiated rulemaking means that the Department of Education has the choice to use regulatory language developed during the negotiated rulemaking or go back to the drawing board before issuing a proposed rule. The department has the ability to introduce proposals ranging from brightlines and minimum standards to regulations about public members.
Given the bipartisan support for increased higher education accountability, the Department of Education would be right to address concerns about insufficient rigor and transparency within the system. As the federal government reevaluates whether existing regulations go far enough in addressing compliance concerns and prioritizing student success, the department must make every effort to reduce harm in higher education oversight. Proposals introduced during the rulemaking such as risk-based review of institutions and accreditors are an important step in the right direction, but the department must use its discretion and authority to implement sweeping reforms that not only rebuild public confidence in higher education but signal an ongoing commitment to quality.
The accreditation system is supposed to protect students from enrolling in underperforming institutions. Unfortunately, under the current accreditation system, simply being accredited does not signal program quality.
Tags: higher education, inside higher ed, higher higher
Improving the Consumer Protection Power of College Accreditation
In March 2024, the U.S. Department of Education concluded a new round of negotiated rulemaking sessions on program integrity and institutional quality. These sessions—colloquially known as “neg reg”—are the process through which members of the department and affected interest groups and communities negotiate the terms of proposed department rules. Few topics drew as much attention during these sessions as the federal recognition of accrediting agencies—the agencies that are entrusted with evaluating and assessing whether institutions and programs meet acceptable levels of quality.
Accrediting agencies play an important consumer protection role in higher education: as part of their evaluation process, accrediting agencies review institutional and programmatic compliance with the standards set forth by the agency as well as by the accredited institutions themselves to determine whether an institution or program is high-quality enough to provide value to enrolling students. Accrediting agencies are further responsible for protecting students and taxpayers by serving as gatekeepers to the Title IV federal financial aid program; failure in this mission would allow low-quality programs and institutions to continue enrolling students using taxpayer funds.
With accrediting agencies holding such responsibilities, it is important that they themselves also be periodically reviewed. And so, at least every five years, the Department of Education evaluates accrediting agency standards and gleans information from site visits and the general public to determine whether the accrediting agency should have continued recognition. Accreditors that demonstrate their ability to consistently apply and enforce standards, including those that focus on student achievement, generally maintain their federal recognition. And when an accreditor fails to meet the operating procedures as outlined in the Higher Education Act, they risk losing their federal recognition.
This year, the Department of Education presented at the neg reg several proposals to improve the consumer protection aspects of college accreditation. Unfortunately, the negotiators failed to reach consensus on any of these proposals, leaving it up to the department to draft a Notice of Proposed Rulemaking (NPRM) that appropriately addresses student achievement standards, protects students from underperforming institutions and programs and safeguards taxpayers.
What Was Discussed during the Negotiated Rulemaking on Accreditation?
The Department of Education is statutorily required to convene stakeholders to provide ideas and opinions on proposed rules before it can revise federal regulations. Constituencies represented among negotiators during the 2024 rulemaking included consumer advocates, veterans, civil rights groups, financial aid administrators, legal assistance organizations, state officials, student loan borrowers, representatives from two- and four-year institutions, representatives from accrediting agencies, and more.
In recent years, the Department of Education has made increasing the rigor of accreditation a key priority. Calls from stakeholders for stronger institutional accountability and robust consumer protections have grown louder, and to address them, the department introduced a slate of proposals aimed at strengthening accreditation. The 2024 rulemaking included significant discussion about how accreditors should treat schools that face sanctions from an accreditor, such as probation, when the school is undergoing a “substantive change” such as adding a new program, location, or degree level. The rulemaking sessions also reignited longstanding debate over the legislative intent and definition of terms such as “effective” and “enforce” in the regulatory context. Across the three sessions, the department revised proposed regulatory text based on insight from the negotiations. For example, in the final session, the department proposed changes that would require agencies to set their own minimum expectations for student achievement measures.
Several of the topics addressed in the proposed regulatory text mirrored policy and process recommendations proposed by a bipartisan National Advisory Committee on Institutional Quality and Integrity (NACIQI) subcommittee in August 2023. These included addressing conflicts of interest and increasing transparency, strengthening student achievement standards, and introducing risk-based review of accreditors and institutions.
Proposals to Increase Transparency and Address Conflicts of Interest
One of the challenges the Department of Education attempted to address during the negotiated rulemaking was the need for greater transparency into the accreditation recognition process to increase the public’s understanding of and trust in the accreditation process. For example, one way the Department of Education seeks to preserve transparency and the public interest is by requiring public members to serve on accrediting agencies’ governing boards. Public members offer unique insights and perspectives particularly because they are meant to be unaffiliated with the institutions or programs overseen by the accreditor. In this way, they can play a key role in democratizing the accreditation process. Advocates have long held that the existing regulatory restrictions on conflict of interest are too vague and, as a result, a number of people, including consultants and individuals who previously represented schools on commissions, may still be considered public members. This is significant, because public members should contribute unbiased perspectives with a mind on consumer and public interest. Public members should bring with them fresh views and new ideas so the same continuous improvement accreditors want to see from institutions exists on their own boards as well.
The Department of Education proposed revisions to current regulations that would enforce stricter requirements for accrediting boards’ public members. Public members could not be: current or former employees, members of the governing board, owners, shareholders of, or consultants to accredited, preaccredited, and applicant institutions or programs; current or former members of any trade association or membership organization related to, affiliated with, or associated with the agency; current or former employees of, or consultants to, the accrediting agency; or members of the program integrity triad (state authorizers, accrediting agencies, and the department).
The proposal prompted discussion about whether this restriction was overly broad and whether it should apply just to the persons falling within the aforementioned categories or their families as well. Some negotiators expressed concerns that imposing such limits would unintentionally erode board quality by barring those with the most experience in or knowledge of higher education. Given the complexity of accreditation, it can take significant time and training to understand, making it difficult for boards to recruit members that represent the public interest.
Thankfully, it is not necessary to sacrifice independence for knowledge of the higher education ecosystem. Public members with a strong background in educational advocacy and those from private industry, for instance, can help to eliminate blindspots and reduce groupthink among accrediting boards. For example, one accreditor, the Accreditation Council for Pharmacy Education (ACPE), which oversees all Doctor of Pharmacy programs in the United States, has a board composed primarily of representatives not affiliated with the accredited schools.
The Department of Education’s proposal also included a measure to increase transparency by addressing long-standing concerns about the lack of information available to the students and taxpayers. Under the proposed rule, accreditors would be required to post materials that they submitted to the department for review to their own websites so that the public can see them. This greater transparency would not only build public trust, but also would help researchers, regulators, consumer advocates, and the media better understand the accreditor recognition process and identify bad actors. Greater access to information would also improve students and families’ decision-making by presenting data on agency policies, investigations, and applications. More accessible data, coupled with additional department proposals that would improve the reliability of student success data institutions use during accreditation reviews, would go a long way in supporting students and building a culture of true accountability.
Proposals to Strengthen Student Achievement Standards
Over the years, many advocates across the higher education landscape have increasingly called for the use of student success metrics to gauge institutional success, including metrics such as completion rate, retention rate, earnings for completers and non-completers, and federal student loan default rate. Some accreditors already use such metrics. Among programmatic accreditors, for example, an institution’s failure to meet certain multi-year licensure examination passage rates can result in sanctions. Several large accrediting agencies including the former regionals1 also collect data on and set standards related to student outcomes, but this information isn’t always considered when evaluating whether an institution should be accredited.
At the same time, many advocates have also raised concerns about how using student success metrics measures can inadvertently harm institutions that are simply trying their best to educate and support students in any way they can. For example, community colleges may report low graduation and high transfer rates as a result of students completing prerequisite courses and transferring to bachelors degree granting institutions without first completing an associate degree. Some have similarly pointed out that the focus on repayment and default rates as value indicators may be more difficult given the prevalence of forbearance, deferment, and repayment program options.
While some outcomes, such as cohort loan default rate have become a less reliable barometer for institutional performance and return on investment, other performance data can be used to help accreditors determine a program’s value. For example, accreditors could set thresholds for institutions regarding their graduates’ federal student loan debt as a percent of earnings.
During the 2024 negotiated rulemaking, the Department of Education proposed a requirement that accreditation agencies set minimum performance standards, or, if they are unable to, explain why minimum expectations are not required and identify other means of enforcing standards. The department is constrained by statute from setting outcome metrics for agencies to use. Entrusting the accreditation agencies to set their own standards enables each agency to conceptualize student achievement in a way that makes sense for the agency and its approved institutions. Accreditors could even consult institutions across sectors to create individualized student achievement standards for each institution based on their previous performance and student population. These alternate measures would also assuage concerns from specific sectors and institutional types about how outcomes-focused accreditation could unintentionally penalize them for forces out of their control. Above all else, the department should establish common definitions for student achievement and improve the quality of data collection and its reporting among accrediting agencies.
For decades, higher education researchers have struggled to establish common definitions and appropriate measures for student achievement, and so discussions of this topic during the session were particularly fraught with disagreement. Questions around the reliability of data and whether efforts to impose strict standards would create a race to the bottom continued to plague both sides of the aisle. While accreditors are required to consider the mission of an institution in applying student success and outcomes standards, there are no limitations on their ability to be innovative in their quest to ensure educational quality. Accrediting agencies could, for example, set an individual student achievement threshold per institution. Attempts to impose even minimum standards faced fierce opposition, and the rulemaking committee failed to reach consensus on the proposed accreditation regulations with institutional and accreditor representatives voting against them.
Proposals for Risk-Based Review of Institutions and Accreditors
The Department of Education recognizes more than sixty institutional and programmatic accrediting agencies. These agencies undergo review by department staff and NACIQI members at least every five years. Unfortunately, the department’s process for evaluating and recognizing accrediting agencies does not adequately assess how well accreditors ensure quality and protect students and taxpayers. As a result, the department sometimes maintains recognition of accreditors despite their failure to address consistently low retention and graduation rates and patterns of predatory behavior or fraudulent activity. One way to strengthen the system would be for the department to allocate more of its time and resources to evaluating high-risk accreditors (for example, accreditors of institutions with poor student outcomes or facing allegations of consumer protection violations) and less of its time and resources on lower-risk accreditors.
At the start of the 2024 neg reg, the Department of Education asked negotiators to consider a new model for accrediting agency review wherein the lowest-risk agencies would be subject to less frequent reviews and more narrowly focused reviews than higher-risk agencies. During negotiations, several representatives of students and consumer protection organizations also proposed that accreditation agencies themselves be required to establish risk-based review policies for their approved institutions. For example, accreditors could be required to investigate an institution following a negative action by a state, the federal government, or another accreditor to see whether they should also act. (The department revised its proposal to include this requirement.)
What constitutes “risk” in “risk-based review”? Accreditors are already well-attuned to tracking an institution’s financial management, but there are many other things that accreditors could consider as well, including poor student outcomes, weak academic performance, and bad actors in the form of college operators that place profit over people—all of these things pose significant risk to students and taxpayers, and so institutions that have red flags in these areas should be subject to swifter and closer scrutiny. And, just as institutions with weaker student outcomes warrant a more careful review than schools that consistently produce strong returns for students, accrediting agencies who count a large portion of underperforming institutions among their ranks, or that represent the greatest risk to taxpayers because of their large portfolio of institutions participating in the student aid programs, should also face heightened scrutiny. Accreditors should be evaluated on how well, if at all, they protect students and taxpayers by examining their response to concerning outcomes and institutional behavior. A risk-based accreditation review process would ensure that the Department of Education could allocate more considerable time to examining those accreditors responsible for underperforming programs and poor student outcomes. Determining which agencies warrant a full review could be fairly straightforward, with accreditors that receive high Title IV volume, have high rates of compliance issues, or a disproportionate number of complaints relative to their size undergoing more frequent or more extensive review than lower-risk accreditors.
One example of the kind of accreditor that might warrant more exhaustive review under a risk-based review system is the Council on Occupational Education (COE), which is responsible for accrediting institutions with over 500 locations and more than 120,000 undergraduate students. COE was required to submit a compliance report at the February 2024 NACIQI meeting based on its failure to meet standards and investigate allegations of fraud at Florida Career College (FCC). (COE would eventually place FCC on “Apparent Deficiency” status—the lowest sanction the accreditor offers—but this action proved too little, too late.) It should be noted, that accreditors have very little incentive to assign the harshest penalty, loss of accreditation, to the institutions they accredit because these institutions are paying members and when the institution loses its accreditation, the agency loses that institution’s membership dues in addition to opening themselves up to potential litigation and the related legal time and costs.
Several comments from NACIQI members and the general public cited the COE’s failure to provide adequate oversight of FCC as a reason the agency should lose Department of Education recognition. Accrediting agencies that lose federal recognition leave the institutions or programs they accredit without access to federal student aid, potentially depriving them of the funding needed to continue operating. The department conducted its own investigation and found that FCC interfered with ability to benefit (ATB) tests that govern when students without high school diplomas or an equivalency can receive federal student aid to ensure students passed. These violations also constituted a failure to meet the fiduciary standards or comply with Program Participation Agreement (PPA) standards. FCC voluntarily withdrew its accreditation and subsequently closed in February 2024. While FCC engaged in a troubling pattern of abuses, it is far from the only institution with serious deficiencies that received low level or no sanctions from their accreditor. Not only did this behavior go unchecked, the failure to withdraw accreditation or otherwise sanction FCC allowed the college to take in more than $85 million in federal student aid dollars in a single fiscal year. The actions of FCC should have given COE cause to initiate a swift process of close scrutiny; similarly, COE’s inability to act more swiftly in FCC’s case should itself have triggered COE’s own review by the department.
While COE may be considered a high-risk accreditor due to its failure to effectively monitor and evaluate FCC, there are several other accrediting agencies which haven’t drawn the ire of the federal government or the public. While the Department of Education recognizes several “programmatic” nursing and nurse education accrediting agencies, five state agencies and accrediting bodies are also recognized for the approval of nurse education. Institutions and programs cannot use their accreditation by a state agency for the approval of nurse education to establish eligibility for participation in federal student financial aid programs. Nursing boards differ from other accrediting agencies in that their focus is on public protection and enforcement, which also gives them certain powers including the ability to investigate and close programs independent of any other body. With state agencies generally drawing fewer complaints or public comments during NACIQI and the fact they do not serve as gatekeepers for federal student aid, state nursing agencies would certainly qualify as low risk.
The Department of Education is also looking to protect students at institutions undergoing substantive changes; that is, those institutions looking to add a program, campus, or degree level. Under the department’s proposal, institutions on probation—one of the most serious sanctions—would face a stricter review when they want to make substantive changes, taking away the ability of the accreditor alone to sign off on the changes.
Over time, institutional and programmatic compliance has come to consist of a series of checklists instead of a nuanced system where acceptable levels of student success and other performance metrics are prioritized. A new model for review should include measures of institutional or programmatic improvement as well as student learning outcomes and the external factors that affect them. During the peer evaluation process, institutions with poor outcomes and the accrediting agencies that oversee them are the ones that need a more careful (and critical) review than accreditors with stronger track records. Likewise when accreditors are seeking continued recognition from the department, they should be evaluated based on how effective they are at identifying and assessing risk.
The department and accreditors should use all tools and data available to make determinations about which accrediting agencies receive continued recognition and which institutions have access to the federal aid system. When assessing risk, the department and accreditors should consider student complaints as well as allegations of predatory behavior uncovered through government investigation, litigation, or the press. This includes not just the cumulative number of complaints, which may be indicative of systemic institutional failure, but also the source of those complaints.
Calls for the strengthening of accreditor oversight are not new. A decade ago the GAO highlighted how rarely accrediting agencies impose sanctions on institutions and recommended the department incorporate accreditor sanctions into annual risk review as well as suggesting they prioritize sanctioned schools for program review. Still even today, very few institutions receive sanctions, giving the impression that the system is working perfectly with most schools meeting all accreditation standards year after year. Accreditors have been reluctant to penalize institutions that demonstrate that they don’t center students’ interests. And when accrediting agencies do take action, it often isn’t as swift as students or the public would prefer.
When reviewing institutional compliance, accreditors place great emphasis on financial management especially when compared to other standards as fiscal issues are easier to document and more objective. Accreditors are generally willing to take punitive actions like sanctions against institutions with failing financial responsibility composite score indicating a risk of insolvency or schools that have been placed into “heightened cash monitoring status” by the department which indicates a risk of financial insolvency or financial mismanagement. What if accreditors placed as much value on a school’s record of student success and mobility as they do on an institution’s financial solvency? While institutions under heightened cash monitoring and those experiencing financial distress and mismanagement pose a significant risk to students and taxpayers, institutions that overpromise and under-deliver can also leave students worse off than if they never pursued postsecondary education at all.
Looking Ahead
The negotiators’ failure to reach consensus during the 2024 negotiated rulemaking means that the Department of Education has the choice to use regulatory language developed during the negotiated rulemaking or go back to the drawing board before issuing a proposed rule. The department has the ability to introduce proposals ranging from brightlines and minimum standards to regulations about public members.
Given the bipartisan support for increased higher education accountability, the Department of Education would be right to address concerns about insufficient rigor and transparency within the system. As the federal government reevaluates whether existing regulations go far enough in addressing compliance concerns and prioritizing student success, the department must make every effort to reduce harm in higher education oversight. Proposals introduced during the rulemaking such as risk-based review of institutions and accreditors are an important step in the right direction, but the department must use its discretion and authority to implement sweeping reforms that not only rebuild public confidence in higher education but signal an ongoing commitment to quality.
The accreditation system is supposed to protect students from enrolling in underperforming institutions. Unfortunately, under the current accreditation system, simply being accredited does not signal program quality.
Notes
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