For-profit college watchdog fighting to stay alive

The nation's largest accreditor of for-profit colleges faces a vote Thursday that could lead to its demise, leaving hundreds of thousands of students at risk of losing access to federal financial aid.

The Accrediting Council for Independent Colleges and Schools, a group that oversees about 900 campuses, is under scrutiny for lax oversight of its schools. If the council is stripped of its federal recognition, those institutions could lose their ability to participate in federal financial aid programs. The council's schools received $4.7 billion in federal aid last year for its students.

On Thursday, an independent advisory committee to the Education Department will make a recommendation on whether to continue to grant recognition to the council as an accrediting agency. Already, department staff has recommended that the council be shut down.

As IBJ reported June 15, the accreditor's demise would likely be a big blow to struggling Carmel-based for-profit educator ITT Educational Services Inc., which relies heavily on federal funding made possible by ACICS.

Here are some key things to know about the committee's review:

SEAL OF APPROVAL AT RISK

The Accrediting Council for Independent Colleges and Schools is up for a routine review by the National Advisory Committee on Institutional Quality and Integrity, an advisory board to the Education Department. But the review, this time around, is anything but routine.

Advocacy groups, lawmakers and others have complained that the council isn't doing its oversight job. It's been accused of continuing to accredit schools under investigation for falsifying job placement rates and claims for federal aid, illegal recruiting practices and misleading marketing claims.

The council had allowed Corinthian Colleges, one of the largest chains of for-profit colleges, to continue to receive accreditation even as it was being investigated for fraud. Corinthian sold many of its campuses, closed others, and filed for bankruptcy protection last year.

Last week, a staff recommendation from the Education Department proposed withdrawing recognition of the council, effectively shutting it down. "Its monitoring regime appears insufficient to deter widespread misconduct regarding placement, recruiting and admissions," the report said.

"Department staff is concerned about the accuracy of job placement rates because … there is documentation of a widespread problem with ACICS-accredited institutions providing unverifiable or false data in their annual reports to ACICS," said the recommendation to deny renewal.

WHAT SENIOR ED OFFICIALS ARE SAYING

Education Undersecretary Ted Mitchell says many accrediting agencies are working hard to evaluate the quality of colleges. But some are not, he told the meeting of the advisory panel in a speech on Wednesday.

"When we see schools provide extremely poor outcomes for students — or even commit fraud — while maintaining accreditation, that is a black mark on the entire field," said Mitchell. "The unfortunate reality is that not all institutions have students' best interests at heart or are investing their resources in ways that maximize student success. Accreditors should be the failsafe in these instances."

WHAT THE COUNCIL SAYS

On the eve of the vote, the Accrediting Council for Independent Colleges and Schools on Wednesday announced the formation of a "Blue Ribbon" advisory committee to conduct an in-depth review of its standards, practices and accreditation processes. ACICS Council Chair Lawrence Leak said in a statement that the independent members of the committee will "recommend changes to our organization that will put students first" by focusing on student achievement, including student retention rates, job placement, and pass rates for license and certification exams.

The council also has tried to take action against some of its schools, including California's Bristol University and ITT Tech, in recent months.

WHAT HAPPENS NEXT

The advisory committee will make its recommendation for renewal, or to withdraw renewal, after hearing from more than two dozen scheduled speakers on Thursday. The committee's recommendation will be forwarded to a senior official at the Education Department, chief of staff Emma Vadehra, who will then have 90 days to review and make her decision on whether to recognize the Accrediting Council for Independent Colleges and Schools. The council has 30 days to appeal to Education Secretary John B. King Jr. after Vadehra announces her decision. The decision also could be challenged in court.

WHAT ABOUT THE STUDENTS

Students will have some time before their financial aid could be threatened.

If the department decides to withdraw recognition of the council, then the schools it has accredited will have 18 months to find a new accreditor for its programs. Financial aid during that time would not be affected. Some students may be able to complete their certificates or degrees in that time. However, federal aid would cease after the 18-month deadline if affected schools don't get a new seal of approval from an accreditor. Students caught up in the mess also might be able to transfer their credits to new schools.