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This report contains a correction.

In February 2018, a U.S. Department of Education advisory committee gathered in a dimly lit Washington, D.C., hotel ballroom to consider the fate of the four organizations that oversee the majority of America’s colleges and grant access to nearly 60 percent of the roughly $120 billion in federal financial aid awarded each year.¹ These four private nonprofits under review were accreditation agencies that determine which colleges are of sufficient quality to participate in the federal aid programs.²

However, it wasn’t much of a review, particularly since the Department of Education had already concluded its own evaluations, finding no problems—not even minor ones—with the four accrediting agencies. While the advisory committee serves as a check and balance on the department’s review and makes its own independent recommendations, it lacks the power to ask for further evidence or to participate in the months-long review process. As a result, over two days, the advisory committee spent only about five of a total of 12 hours of meeting time examining these four agencies. In each case, committee members voted unanimously for the most favorable outcome for each accreditor: recognition for five years.³ It is telling that the committee discussed the Higher Learning Commission—the country’s largest accreditor, overseeing more than $33 billion in federal aid each year—for about an hour and 40 minutes.⁴ Reviews of small agencies that approve midwifery, physical therapy, and nursing programs, which represent just a drop in the bucket of federal student aid, receive a similar level of attention.⁵

Despite ongoing national concerns about poor outcomes at America’s colleges—including high debt, defaults, low repayment, and a spate of for-profit colleges that have defrauded students—many of these accreditation agencies are not receiving much scrutiny. The reviews by the Education Department illustrate that accreditors alone are not to blame for the problem; the federal government is also culpable for having failed to fulfill its role in ensuring that accreditors are effective at their job.

Last year, an investigation by the Department of Education’s Office of Inspector General (IG) found that the department does not exercise adequate control over the evidence agencies submit and that it fails to effectively monitor agencies to ensure that they are fulfilling their responsibilities.⁶ As a result, the Education Department is not meeting requirements to evaluate accrediting agencies for federal recognition and ensure that they are reliably evaluating the quality of education in the schools they accredit.

The federal government’s failure to conduct adequate oversight of accreditation agencies raises the risk that students enroll and draw on billions in federal funding—often in the form of loans—to pay for low-quality schools without receiving the educational or financial rewards that should come with a higher education.

For current and prospective students, accreditation acts as a safety seal of approval signaling that a college has been vetted by an expert. This seal matters, since enrolling in college may be one of the biggest investments that students can make in their future. The federal government’s relationship with accrediting agencies was intended to protect students and taxpayers from poor-performing institutions. Yet accreditors were not supposed to perform this oversight role on their own; Congress gave responsibility to the Department of Education to make sure agencies fulfill the job. Unfortunately, the department has, in many ways, failed this duty.

This report lays out a vision for redesigning the federal process of reviewing accreditation agencies to ensure that the Education Department conducts thorough investigations that accurately assess whether these agencies are demanding good student outcomes from the colleges they accredit. Today, the Department of Education is far less focused on student success than it is on whether accreditors comply with arcane compliance rules, such as submitting board member resumes, which is why the review process is sometimes derided as mere “box-checking.”⁷

The report begins with an overview and history of the Department of Education’s recognition, or approval, process of accrediting agencies. It then discusses challenges and provides recommendations for addressing them, including:

• Focusing the Department of Education’s efforts on institutional accreditors that serve as gatekeepers to the vast majority of taxpayer funds and federal student aid
• Conducting thorough, open-ended investigations that take into account all pertinent information at the department’s disposal—particularly data on student outcomes, risk factors such as weak institutional finances, lawsuits, and investigations
• Making better use of the department’s ability to limit agency recognition
• Better incorporating the National Advisory Committee on Institutional Quality and Integrity (NACIQI) into the federal recognition process by providing them with proper training and resources, empowering them to make decisions, and requiring that their recommendations operate as a floor that the Department of Education must honor in final decisions

The recommendations in this report are informed by an extensive review of Department of Education documents, as well as interviews with former department officials, accrediting agency representatives, and members of NACIQI—an advisory board that participates in accreditor reviews and makes recommendations on recognition of agencies to the secretary of education. The author conducted interviews with more than a dozen of these experts to gain a deep understanding of the recognition process and how it might be improved. There was general consensus that the department should expand beyond a box-checking exercise to fully assess the quality and success of agencies’ work.

Using public records requests and publicly available information, the author also reviewed hundreds of pages of accreditor applications for recognition; Department of Education staff reports; NACIQI transcripts; the accreditation handbook, which provides guidance to agencies filing applications for recognition; and other background materials.⁸

Unfortunately, at a time when better oversight is needed, the Department of Education is engaged in a rewrite of the rules that would weaken both what is expected of accrediting agencies and the department’s ability to hold accreditors responsible when they fail.⁹ It is the Department of Education’s responsibility to ensure that accrediting agencies are fulfilling their duty to keep low-quality educational providers from tapping into federal financial aid dollars. The changes proposed in this report would help to ensure that students are attending quality institutions and that taxpayers’ investments are sound.

The government’s reliance on accreditors

The Department of Education currently recognizes 62 accreditation agencies that can approve colleges for access to financial aid or other federal programs. This includes 37 agencies that serve as a link to federal financial aid,¹⁰ 16 that serve as a link to other federal programs such as health education programs under the U.S. Department of Health and Human Services (HHS),¹¹ and 9 state agencies that approve either nursing or vocational education—some of which may also provide a link to federal student aid.¹² Of the 37 agencies that serve as gatekeepers to federal aid, 17 are institutional accreditors that oversee entire institutions and 20 are specialized or programmatic accreditors that approve programs or institutions of a certain category—for example, religious institutions.¹³ (see Table 1)

While some accrediting agencies long predate the first federal student assistance programs, they were officially brought into the federal aid system with the passage of the Veterans Readjustment Assistance Act in 1952, following concerns that unreliable education providers were taking advantage of students served by the 1944 GI Bill.¹⁴

While the federal government tapped accreditors to verify which colleges merited access to federal aid, it did not have a thorough process for determining which agencies could be relied on as judicious approvers. Instead, the government recognized agencies primarily based on the membership list of a national association of regional accrediting agencies; moreover, it adopted much of that organization’s criteria for membership into its own standards.¹⁵

However, as legislation expanded the amount of aid available and the types of eligible institutions, it became obvious that accreditors needed oversight as much as colleges. Fraud, waste, and abuse plagued the aid programs, and student loan defaults skyrocketed, particularly at for-profit schools.¹⁶ This crisis came to a head in the late 1980s and early 1990s when for-profit institutions had almost four times the default rate as traditional schools. Over a period of six years, loan defaults at these institutions increased by 338 percent—to 39 percent, compared with a 10 percent default rate for four-year public and nonprofit schools.¹⁷

In response to these concerns, the 1992 reauthorization of the Higher Education Act laid out a much clearer set of requirements for accreditation agencies to serve as a link to federal aid. This included greater specificity about how the Department of Education should oversee these organizations.¹⁸

The Department of Education’s historical role in oversight

The Higher Education Amendments of 1992 required the secretary of education to conduct a comprehensive review and independent evaluation of the performance of accrediting agencies in order to ensure that they are meeting federal criteria.¹⁹ This federal review must consider information collected from sources other than the accreditor, also known as “third-party information”; include site visits to the agency and the schools it accredits; and take into account any other relevant information. The law also required that agencies have standards in 10 core areas, including student achievement, fiscal and administrative capacity, and curricula.

The bulk of the accreditor recognition process that exists today is informed by the Higher Education Amendments as well as a 1994 Department of Education statutory and regulatory framework that enables it to make a thorough and independent analysis that does not rely “solely on written submissions from the accrediting agency or on announced visits to the institutions the agency accredits.”²⁰

However, very little of what was outlined in the goals of the 1994 rule-making was ever incorporated into the current process, and the department still relies almost entirely on written submissions from accreditors and announced visits. The broad vision of a Department of Education as an independent quality check on accrediting agencies has not come to fruition.

The recognition process

In order to gain federal recognition, an accrediting agency must submit an application at least once every five years, providing evidence that it meets federal recognition criteria. These criteria address 10 core areas, including student achievement, fiscal and administrative capacity, and curricula. The Accreditation Group within the Department of Education’s Office of Postsecondary Education then evaluates the evidence to determine whether the agency meets federal standards.²⁵

The application process typically starts one year before the agency’s recognition is set to expire. Several months before the final decision, the department asks for public comments on the agency. Those comments and the information submitted by the agency are then reviewed by the Accreditation Group. The group’s work typically includes at least one site visit to watch the accreditor review a college and another visit to observe the accreditor’s decision-making board. The department has authority to include information collected by third-parties, information directly related to institutions or programs the agency accredits, and observations gathered during announced or unannounced site visits to the agency or any of the institutions it accredits.

The Accreditation Group sends the accreditor a draft report, including a draft recommendation to which it has the opportunity to respond. The Accreditation Group then uses the agency’s responses to write a final report and makes a recommendation on recognition to a senior Department of Education official, which is then made public.

To provide one example of how this process works: Federal criteria require accrediting agencies to have clear and effective controls against conflicts of interest on their boards, commissioners, reviewers, and staff. To address these criteria, agencies typically must submit their conflict of interest policies, signed conflict of interest forms, and evidence of recusals in cases of conflict of interest. Figure 1 shows the type of evidence an accreditor would submit to the Department of Education, as well as the department’s analysis.

At this stage, an independent bipartisan group known as NACIQI gets involved in the process. NACIQI is an advisory body tasked with making recommendations to the secretary of education on individual accrediting agencies’ recognition applications, on accreditation more broadly, and on institutional quality. The body consists of 18 members who serve six-year terms. Six members are chosen by the secretary, six are chosen by the House of Representatives, and six are chosen by the Senate. Among members chosen by the House and Senate, half are nominated by the minority and half are nominated by the majority, to ensure a partisan balance.²⁶

NACIQI receives the department’s final report and supporting documentation. One week later, it conducts a public meeting where it reviews and questions the accreditation agency, before voting on its recommendation. That recommendation, along with the recommendation and information from the Accreditation Group, is submitted to a senior department official, who makes a final decision on recognition. Both NACIQI and the Accreditation Group can recommend full approval, limited approval, or continued approval pending the results of a 12-month compliance report—assuming the accreditor does not meet the federal requirements. Limiting recognition would involve a limited approval, for example, prohibiting an agency from accrediting new institutions until it comes into compliance. Yet the Department of Education has not typically taken such an action.

While both NACIQI and the Accreditation Group review the accrediting agency, their findings are only considered recommendations, which can be overruled by the senior department official. This official makes the final recommendation, which must then be approved by the secretary.

The Department of Education’s recognition process is plagued with challenges that prevent it from adequately assessing an accrediting agency’s success as a reliable authority of quality. These issues, evident in both interviews and the IG report, include limitations within the Accreditation Group; a bureaucratic review process that is narrowly focused on documentation and whether an accreditor has a standard but that neglects actual results; failure to use authority to differentiate between accreditors; and an advisory committee with limited ability to play a constructive role in oversight, which creates tension and confusion in the recognition process.

Challenge 1: Limited capacity to conduct in-depth reviews

One challenge to proper oversight is limited staffing and high workload within the Accreditation Group, which oversees 62 accrediting agencies that must undergo review at least once every five years.²⁷ Moreover, the group must conduct additional reviews when agencies do not meet standards and when they want to expand their scope to include new degree types or delivery methods. On top of that, the Accreditation Group oversees accreditation standards on medical education for foreign countries that have submitted applications to allow U.S. citizens access to federal student loans to attend an institution outside of the United States. It does all of this with a staff of just eight—six analysts, one support staff, and one director—amounting to a workload of roughly 10 accreditors per analyst.²⁸

While the Department of Education and NACIQI review 62 agencies at least once every five years through the recognition process, significantly fewer accrediting agencies are responsible for the majority of federal financial—or Title IV—aid. Only 14 agencies authorize 99 percent of total federal financial aid.²⁹ For example, the National Association of Schools of Dance, which serves as the Title IV gatekeeper to just two colleges that receive about $1.5 million combined in federal aid each year, gets roughly the same amount of scrutiny from both the department and NACIQI as the Higher Learning Commission, which accredits 941 schools and authorizes access to more than $33 billion in federal aid per year.³⁰ While reviews do vary for institutional and programmatic accreditors because some criteria only apply to agencies that accredit entire institutions, each agency is evaluated for much of the same criteria over the same time period.³¹

As a consequence, reviews sometimes get bogged down by issues that are largely irrelevant to the federal role of the agency under review. For example, during a 2016 NACIQI meeting where the American Psychological Association (APA) was up for review, a significant amount of time was spent discussing required standards of internship programs for psychological students;³² however, the APA does not serve as a gatekeeper to any federal student aid, and the issue of internship standards has no bearing on federal recognition.

In response to concerns and recommendations made by the inspector general, the Office of Postsecondary Education pointed to limited staffing as a barrier, stating that it did not believe the agency was sufficiently staffed to perform routine monitoring.³³

Solution: Focus resources on agencies that represent greater risk

The first step in improving the recognition system is devoting more time and resources to the accreditors that serve as gatekeepers for the most federal student aid. While it would be ideal for the Accreditation Group to hire more staff and expand capacity, even with its current staffing level, it could more effectively vet accreditors simply by reducing oversight of those that have little to no impact on federal financial aid dollars. The Accreditation Group already does this to a small extent. Some criteria for recognition only apply to agencies that accredit entire institutions, which include substantive change requirements and state authorization.³⁴ However, these agencies are still reviewed once every five years for most of the same criteria as institutional accreditors.

And to expand capacity, recognition of non-Title IV accreditors should be moved to other decision-making bodies. For example, programs requiring approval for health education funding under HHS could be moved to review by the agency providing the funds—particularly when these programs already exist at an institution approved by a federally recognized accreditor reviewed by the Department of Education. In many cases, the department is essentially doing twice the work, reviewing the accreditor that oversees the institution as well as the accreditor that oversees an individual program within the institution. However, adjusting the review process would require a change in other federal laws outside of the Higher Education Act that require the Department of Education to review these programs.

Another way to build capacity would be to increase the time in between reviews for agencies that serve as links to low levels of federal student aid or non-Title IV accreditors. For example, there are 23 accreditors recognized for Title IV purposes that grant access to less than $200 million in federal aid each year. (see Table 1) Rather than reviewing these agencies every five years, the Accreditation Group could extend recognition to every seven or 10 years. This would, however, require a change in federal statute.

Moving review of non-Title IV accreditors to other agencies and lengthening time in between reviews for agencies that pose less risk would significantly increase the capacity and focus of the Accreditation Group so that it can spend more time on what matters most and the Department of Education can conduct more in-depth reviews and additional routine monitoring.