Count the Department of Education among those who want torevoke recognition for the Accrediting Council for Independent Colleges and Schools (ACICS), one of the gatekeepers of federal student aid dollars. ACICS has accredited troublesome institutions such as Corinthian Colleges and ITT Educational Services, but the body does not have a monopoly on approving substandard colleges.Accreditation failures are the natural result of the system’s bad incentives and lack of market discipline ; ACICS is not solely responsible.
“Amending the law would be insufficient to change accreditor incentives, and congressional micromanagement of college standards would likely present its own set of problems.”
In a previous column, I described how the accreditation system functions. To gain access to taxpayer-funded student aid, all colleges (for-profit, non-profit and public) must gain accreditation from one of several bodies. However, accreditors seldom take action against schools with poor outcomes—just 0.8% of all colleges had their accreditation terminated over a five-year period. To make matters worse, the Department of Education is inept at responding to accreditor sanctions; over one-third do not elicit any reaction from the Department at all.
Any reasonable look at the data will tell you that college accreditors are not doing their jobs. Accreditors place very little emphasis on student outcomes at colleges; one analysis by the Government Accountability Office found that among for-profit colleges, schools in the top quartile of student outcomes were 30% more likely to receive an accreditor sanction than schools in the bottom quartile.
So what metrics do accreditors take into account when deciding whether to sanction schools? Measures of financial health are the strongest predictor of whether a school will receive a sanction, particularly for accreditors which mostly recognize for-profit colleges. A school at the tenth percentile of financial health is ten times more likely to receive a sanction than a school at the ninetieth percentile.
While finances are certainly important, it does not seem to correlate with student outcomes. Additionally, an overemphasis on financial health may dissuade colleges from taking risks to improve quality, or encourage them to raise tuition to make their financial situation appear stronger.
Why do accreditors place so much emphasis on financial characteristics, when student outcomes are arguably more important? The law is one reason. Accreditors are required to have standards in financial areas, but do not have to consider student outcomes when making decisions. There is a reference in the Higher Education Act to “student achievement in relation to the institution’s mission,” but this is too broadly- defined to have much meaning.
However, amending the law would be insufficient to change accreditor incentives, and congressional micromanagement of college standards would likely present its own set of problems.
In addition to the legal mandate, accreditors have many other reasons to overemphasize financial metrics relative to student outcomes. First, they want to avoid the embarrassment a major bankruptcy can bring, such as that of Corinthian Colleges last year. Low graduation or job placement rates, while quite telling with regard to institutional quality, rarely make headlines.
Second, financial metrics are more objective and easier to measure than student outcomes. The Department of Education itself calculates one widely-used measure, the Financial Responsibility Composite Score. A metric such as graduation rate, by contrast, might be held down by a high transfer-out rate (as is the case with many community colleges). Post-graduation student earnings take years to measure, and many colleges argue that their students’ earnings a few years after enrollment do not represent the full lifetime benefits of a degree.
These deficiencies aside, a holistic analysis of student outcomes will generally reveal whether a college’s accreditation is worth keeping. In my previous column, I identified 139 colleges which fail on four different measures of student success. Nevertheless, many de-accredited schools will try to explain away poor student outcomes, and sue accreditors to have their recognition restored.
One such institution was Sojourner-Douglass College, a Maryland nonprofit which had, among other things, a graduation rate of 21%. The college sued its accreditor last year after its accreditation was revoked for financial reasons. (The lawsuit is ongoing, but the campus remains closed.) Accreditors that start terminating schools based on student outcome characteristics, which are admittedly less objective than financial ones, can expect a deluge of lawsuits from de-accredited schools.
Some tweaks to the accreditation system may be in order. But the long-term solution must be more market discipline in the form of an expanded role for the private sector in student lending. Private lenders, with their own money on the line, will have a powerful incentive to weed out poor-quality colleges. Colleges will need to improve outcomes in order to gain access to funds, rather than having them automatically granted by the Department of Education. Students should also be more proactive—in the age of Google, it is ever easier to find out which colleges to avoid.
High-profile accreditation failures such as the case of Corinthian Colleges and ACICS make headlines. But the whole system has problems, not just a handful of for-profit schools. Students and taxpayers deserve better.
This piece originally appeared on Forbes
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Preston Cooper is a policy analyst at the Manhattan Institute's Economics21. Follow him on Twitter here.
This piece originally appeared in Forbes