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For-profit college accreditor loses federal recognition

WASHINGTON (AP) — The Department of Education has rescinded its recognition of an accrediting agency that primarily oversees for-profit colleges, jeopardizing the survival of schools that serve about 5,000 students.

The decision prohibits colleges certified by the Accrediting Council for Independent Colleges and Schools from participating in federal student aid programs unless they can obtain approval elsewhere. Schools will have 18 months to find a new accreditation.

Twenty-seven colleges will be affected, Education Undersecretary James Kvaal said Friday, although three are already in discussions with other agencies. Ministry officials did not provide the names of the schools.

The department’s action is the culmination of a years-long effort to bankrupt ACICS that began under the Obama administration. Several top agency-approved colleges had misled students about placement rates, and ACICS had failed to fulfill its watchdog role, the Department of Education determined. But Betsy DeVos, education secretary under President Donald Trump, restored the agency’s federal recognition.

The reprieve from the accreditor was short-lived. In 2020, an investigation by USA Today showed the group endorsed a college in South Dakota that lacked evidence of students or faculty. The Department of Education began another review of ACICS and announced on Friday that Assistant Secretary Cindy Marten had rejected the accreditor’s final appeal.

At any given time, ACICS has accredited more than 240 institutions which, in 2015, received a combined federal aid of $4.76 billion and enrolled more than 600,000 students.

In a press release published on its website, the ACICS said it was disappointed with this decision. “We are evaluating all of our options and how best to serve our institutions, including any decision to appeal the Deputy Secretary’s decision in federal district court,” the statement said.

Accrediting agencies serve as gatekeepers for the federal government, ensuring the legitimacy and quality of colleges. If a college is approved by a recognized accrediting body, it may receive federal funds, such as student loan repayments or Pell grants. This money is crucial to the survival of many universities, especially ACICS-approved for-profit colleges.

“ACICS is known for accrediting some of the most infamous colleges like Corinthian Colleges and ITT that have engaged in wrongdoing on a massive scale,” Kvaal said. “The cost of these wrongdoings to students and taxpayers is still being calculated.” Just this week, the Department of Education canceled nearly $4 billion in debt for more than 200,000 former ITT Tech students. Their college credits and degrees were of questionable value after the school closed.

Similarly, the Biden administration in June canceled federal student debt for hundreds of thousands of students who had attended Corinthian Colleges. Once one of the largest for-profit university companies in the country, Corinthian closed in 2015 amid numerous fraud discoveries.

Kvaal said the decision was not made because of ACICS’ history or reputation, but because it failed to meet the minimum standards required of accrediting agencies. These duties include oversight of colleges whose finances or practices put them at risk of closure while students are in the middle of their degrees.

Students at the 27 ACICS-accredited schools will not immediately lose their financial aid. Their schools will receive interim certification that will allow them to participate in federal financial aid programs while they seek new accreditation.

“Unless a court orders otherwise, the ministry has a responsibility to enforce accountability in the accreditation system and ensure that students and taxpayers are protected,” Kvaal said.

The ministry’s decision requires affected schools to submit “educational” plans for students to complete their studies in case the college has to close. Colleges will also be prohibited from admitting new students to programs that cannot be completed in 18 months and from adding new programs or locations eligible for federal aid.

Thompson reported from Denver.

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