Time to Decouple Accreditation from Federal Funding

It often appears as if the country’s six regional accrediting agencies are the federal overseers of all things higher education. It’s time to put an end to their expansive role; doing so would very likely set off a great chain of positive reform. This is especially important now, as Congress is getting ready to update and reauthorize the Higher Education Act, which governs accreditation, in 2014.

The six agencies are the Middle States Association of Colleges and Schools (MSACS), the New England Association of Schools and Colleges (NEASC), the Western Association of Schools and Colleges (WASC), the Southern Association of Colleges and Schools (SACS), the North Central States Association of Colleges and Schools (NCA), and the Northwest Commission on Colleges and Universities (NWCCU).

They provide a seal of approval—accreditation—that indicates schools are meeting minimal industry standards. Primarily, they ascertain that the colleges and universities are financially sound and function as educational institutions and not merely as  “diploma mills.”

The agencies’ main source of power is their ability—granted by the original Higher Education Act in 1965—to determine whether schools are eligible for federal funding, particularly the student financial aid that is the life’s blood for private institutions. That role has permitted the agencies to make the transition from essentially trade organizations intent on cooperatively improving industry practices—as they were originally conceived—to quasi-governmental regulatory bodies with the authority to impose huge costs, policy shifts, and penalties.

Allowing the regional agencies to continue as they are will likely continue higher education’s slide into mediocrity and dogmatic conformity. They currently impose burdensome costs and regulations, stifle innovation, discourage competition and, most egregiously, allow substandard schools to continue operations while sucking up massive amounts of federal aid.

There is growing support for reforming accreditation, although the academic establishment is solidly behind the status quo. Even President Obama has criticized the agencies’ glacial response to the demand for quicker accreditation of online courses and other innovations. He also suggested tying accreditation to such measures as affordability in his 2013 State of the Union address.

The criticism comes from many directions and covers the entire gamut of accrediting agencies activities. “It’s quite clear that this [accreditation] has not been an effective measurement for ensuring quality in higher education,” stated Hank Brown at a conference at the American Enterprise Institute in September centered on a recent report he produced about accreditation. Brown is a former U.S. congressman and senator from Colorado, as well as the former president of the University of Colorado.

A paper Brown wrote about accrediting issues for AEI was the focal point of the conference. Additionally, he heads a campaign by the American Council of Trustees and Alumni (ACTA) to reform accreditation.

The accrediting agencies possess the abusive powers of a cartel, as they are funded by universities and the actual accrediting process is essentially a “peer review,” in which schools are judged by administrators at other colleges and universities. Additionally, they have monopoly power, as schools seeking regional accreditation must be accredited by the agency that controls their geographic location.

Such distortions harm higher education’s advance. At the AEI conference, Ben Wildavsky, director of higher education policy at the Rockefeller Institute, brought up the recent closure of Ivy Bridge College due to accreditation problems. Ivy Bridge was an independent online cooperative effort by Tiffin University in Ohio and the for-profit firm Altius Education; it was recently forced to close its doors by the Higher Learning Commission of the North Central Association of Colleges and Schools because the accreditor wanted Tiffin to have more control than Ivy Bridge.

It was “a classic example of an accreditor thwarting innovation,” Wildavsky said. “It [Ivy Bridge] had a promising model that was popular, and yet, it was outside the box and the accreditor couldn’t handle it.”

The Higher Learning Commission has been especially aggressive toward for-profit education ventures such as Ivy Bridge in recent years. Particularly worrisome is a recent change to its criteria for accreditation. “We felt it was important to make a statement that education is a public good,” said the agency’s president, Sylvia Manning. The change relegates the for-profit motive—and the rights of shareholders—to backseat status.

As egregious as that intrusion into the rights of private businesses is, there are plenty of other issues critics have with accreditors. Brown began his attack at the AEI conference on the regional accrediting agencies’ failure to deal with problems such as poor educational outcomes and mounting debt by students who have little chance of academic success, noting that, “instead of ensuring that federal aid only follows students to quality schools, accreditation allows money to finance low-quality institutions that fail to educate.”

Brown cited as an example Southeastern University in Washington D.C., which did not have its accreditation revoked until 2009 despite decades of exhibiting dysfunctional tendencies, including a student loan default rate that reached 42 percent by 1987 (against a national average of 18 percent) and a six-year graduation rate that reached the low teens.

In a 2010 Washington Monthly article, higher education critic Kevin Carey wrote that, before the accrediting axe finally fell on Southeastern, “overall student pass rates on six exams administered through an allied health program were, respectively, 0,0,0,16, 33, and 40 percent.” For most of its existence, the majority of Southeastern students left school with no degree, little gain in skills, and mired in debt.

Perhaps worst of all, the agencies increasingly act as the middlemen in an unholy alliance with college administrators and Washington educational bureaucrats to decide on issues beyond their legislated reach. Pushed out of their rightful places are the various boards of trustees, regents, governors, directors, and visitors who are supposed to be the overall governing bodies of higher education institutions.

This sort of infringement into the activities of a governing board happened in 2012 at the University of Virginia when SACS placed the University of Virginia on a formal warning status for a year. They did so because the Board of Visitors did not consult the faculty before terminating the school’s president. This was despite the fact that the Visitors are, by law, “appointed by the governor to select, evaluate, and, if appropriate, terminate the president.”

At that time, ACTA complained to the department of Education, stating that “the notion, suggested by SACS, that the board must give the Faculty Senate advance notice of its intention to terminate the president is both ludicrous and in utter violation of the board’s statutory and fiduciary responsibility to serve the public interest.”

Yet, due in part to pressure from SACS, Virginia’s president was quickly restored.

If regional accrediting agencies can run roughshod over basic legal principles of ownership and board governance, what can’t they do? It would not be hard to see a time in the near future when the agencies made rulings on political concerns, such as threatening schools’ accreditation over a failure to meet environmental or diversity standards, or even a failure to promote specific ideas in the classroom.

Of course, one might also ask what will replace the accrediting agencies as the gatekeeper for federal aid? After all, aren’t they a private alternative to the creation of another federal regulator? That was one objection raised at the AEI conference by Judith Eaton, president of the Council for Higher Education Accreditation—that ACTA, Brown and other critics were suggesting a massive increase in federal involvement in higher education by removing the current voluntary institution-supported accreditation process.

Arthur Rothkopf, the former head of the National Advisory Committee on Institutional Quality and Integrity (NACIQI), which is a federal board that essentially oversees the accreditors, denied Eaton’s claim that decoupling the accrediting agencies from their gate-keeping roles necessarily meant more federal involvement in higher education. “We need government to do one thing: define the areas in which data is made available to the consumer and let the consumer and the marketplace operate,” he said.

Brown added that much of the accreditation process could be replaced simply by demanding greater transparency, especially by schools posting online such information as graduation rates, student loan default rates, and various types of student outcomes, including results of licensure tests, value-added assessment tests, job placement rates, and graduates’ incomes.

Another accountability measure mentioned that could help limit the accreditors’ overreach is legislatively ending the explosion of student loans to unprepared and gullible students by insisting on “skin-in-the-game” regulations that force colleges to essentially co-sign a portion of a student’s borrowing. By making schools partly responsible for loans, they become the deciding party for lending, not the accreditors.

Brown also said that NACIQI should permit the proliferation of more accrediting agencies and not restrict schools to seek accreditation from specific regional agencies. In that way, agencies would be forced to be more flexible when it comes to accrediting start-up schools and other innovations.

One promising way to end the accrediting agencies’ stranglehold on higher education without handing the gatekeeper role directly over to federal regulators is to rely on the states. According to Brown, states already “regulate public and private colleges, universities, and occupational schools to protect against fraud and diploma mills.” That solution, along with greater transparency, may be all that is needed to end the disappointing, restrictive, costly, and potentially despotic control of the agencies.