If you can tear your eyes away from the Brexit drama, some major news has broken in the higher education field. The National Advisory Committee on Institutional Quality and Integrity, an oversight body, recommended the termination of the Accrediting Council for Independent Colleges and Schools (ACICS), one of the gatekeepers of federal student aid. ACICS has approved taxpayer funding for several troubled institutions, notably Corinthian Colleges.
What does this mean for ACICS-accredited schools? According to the Department of Education, these institutions will retain access to federal student aid for 18 months while they attempt to find a new accreditor. After that, colleges which have not found new recognition will lose access to federal funds.
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In a vacuum, the de-recognition of ACIS is probably warranted. As I wrote last week, ACICS-accredited schools have worse student outcomes along a number of dimensions than any other major accreditor. These schools throw up more “red flags”—signals of a poor educational environment—than other accreditors’ institutions. ACICS has let quite a few bad actors slip by over the years.
However, the decision to terminate ACICS underscores many of the flaws in the accreditation system itself. For starters, not all ACICS schools are poor quality. The de-recognition of the accreditor in its entirety means better schools are at risk of losing their access to federal student aid alongside worse ones. Granted, the better schools should be able to find another accreditor, but the blanket action will mean a good deal of uncertainty for the colleges and their students over the next 18 months. The accreditation system means regulators must punish many good colleges along with the bad ones.
Further, the Department of Education’s oversight council only decided to terminate ACICS after the collapse of Corinthian made headlines and several high-profile politicians, including Senator Elizabeth Warren, called for the accreditor’s head. While the termination of ACICS may have been justified under the circumstances, it seems that unfavorable headlines and political necessity drove the council’s decision more than an impartial look at the evidence. As the Wall Street Journal has pointed out, other accreditors who engaged in questionable conduct remain recognized by the government. That is no way to make decisions—but the high-profile, top-down workings of the accreditation system are nevertheless vulnerable to such pressures.
Finally, the incentives for accreditors are all wrong. Like Wall Street ratings agencies prior to the financial crisis, the bodies face little inducement, other than reputational, to make good decisions. However, accreditors could face lawsuits if they terminate poor-quality colleges. This gives most accreditors a bias in favor of maintaining recognition for questionable institutions, unless public pressure compels them to do otherwise.
If we must maintain the status quo, then ACICS’ termination was warranted. But policymakers should instead seize this opportunity to rethink whether accreditation is the best way to encourage colleges to improve. Under the current system, the destination of hundreds of billions of taxpayer dollars are controlled by agencies which pay little to no price for being wrong. The survival or termination of a single accreditor is not the biggest issue here—it is whether the whole system can function properly.
Preston Cooper is a policy analyst at the Manhattan Institute. You can follow him on Twitter here.
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