Education Department drops ACICS as a college accreditor, again

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The Education Department has rejected an appeal from the Accrediting Council for Independent Colleges and Schools to remain as a gatekeeper between colleges and billions of dollars in federal financial aid, the agency said Friday.

The federal government relies on accreditors to deem colleges worthy to participate in the federal student aid program. Without an accreditor’s seal of approval, students cannot obtain federal education loans that are critical for many schools, especially for-profit colleges.

In a decision issued Friday, Deputy Education Secretary Cindy Marten sided with department staff and an independent advisory board that said the council was incapable of meeting federal standards, including having adequate staff and financial resources to operate. She said it was unlikely the oversight body, commonly known as ACICS, could rectify years of problems if given more time.

Although the education secretary typically reviews appeals, Marten was given the task after Secretary Miguel Cardona recused himself from the case. The council accused Cardona of being biased against the oversight body after he seemed to back its termination during congressional testimony last year. It took the Biden administration more than a year to hand down a decision on the appeal.

In a statement, the accrediting council said it is “disappointed” by the department’s decision.

“We believe it is deeply flawed and that ACICS has been in substantial compliance with any objective, consistent, and reasonable interpretation of the recognition criteria,” the company said. “We are evaluating all of our options … including any decision to appeal the Deputy Secretary’s decision in federal district court.”

With this final decision from the Education Department, the council can file a lawsuit seeking only an injunction to stop the loss of its recognition. A successful court challenge could leave schools the council accredits in a holding pattern until a final court ruling. But schools are already looking for a new accreditor.

On a call with reporters Friday, Undersecretary of Education James Kvaal said three of the 27 colleges the council accredits have begun the process of switching accreditors. All of the colleges will have 18 months to find a new accreditor to prevent students from losing access to government loans and grants.

“The Deputy Secretary’s decision is not grounded in ACICS’s history or reputation, but rather its continued, long-standing inability to come into compliance with minimum standards expected of an accreditation agency over the course of years,” Kvaal said. “The story with ACICS is long.”

This is the second time the council has lost the recognition needed to operate. The Obama administration cut ties with the ACICS in 2016 after the collapse of Corinthian Colleges and ITT Technical Institute, which had remained accredited by the council despite widespread findings of fraud and dismal graduation rates.

The council was once one of the nation’s largest college accreditors, with nearly 300 schools under its watch. Many of those colleges switched accreditors when the council lost its recognition in 2016, but some of the most troubled institutions remained.

The Trump administration gave the oversight body another chance with the understanding that it would address outstanding problems. Then-Education Secretary Betsy DeVos reinstated the council in 2018 over the objections of her staff, concluding the accreditor could improve within a year.

In January 2021, career staffers at the Education Department said the deficiencies that plagued the council in 2016 remained and new problems had emerged.

Staffers took issue with the council’s accreditation of Reagan National University, a school in South Dakota that a USA Today investigation in 2020 revealed had no students, faculty or classrooms.

The ACICS approved the for-profit university in 2017 but inquired two years later why none of its graduates appeared to have gotten jobs. It then asked the now-defunct school to explain why it should keep the seal of approval. The university instead voluntarily surrendered its accreditation.

Another council-accredited school, Fairfax University of America — formerly known as Virginia International University — was nearly forced to close in 2019 after a state audit criticized its online education program. Education Department staff questioned why the ACICS had failed to step up before state regulators intervened.

“It’s great to see the Department take this long-overdue action to protect students and taxpayers. We are talking about an entity that accredited a school that didn’t even exist and continues to rubber stamp some of the worst for-profit colleges,” said Eric Rothschild, director of litigation at the National Student Legal Defense Network. “Students count on accreditors to validate that the schools where they spend their time and money will meet a baseline level of quality. Today’s determination is an important step in that direction.”

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