DeVos’s Education Dept. Relaxed Rules for For-Profits Under Accreditor That Closed

As a controversial accreditor of for-profit colleges sought new federal recognition, the Department of Education relaxed requirements for institutions affected by its loss of that recognition.

The Accrediting Council for Independent Colleges and Schools, or Acics, was stripped of its federal recognition in late 2016, after reports of shoddy oversight and a department analysis that found the accrediting council had failed to comply with more than 20 areas of federal regulation.

Without federal recognition, the council could no longer serve as a gatekeeper for federal student aid. And the colleges that it accredited had just 18 months to find a new accreditor or they would also be unable to accept federal Title IV money from their students.

To receive federal money during that 18-month period, the colleges that lost accreditation when Acics was stripped of its recognition signed an agreement that called for compliance with a handful of requirements, including an on-campus visit with their new accrediting agency to assess compliance, regular notification of lawsuits or settlements, and reporting of outcome data, among other stipulations.

In a letter dated last August that was obtained by The Chronicle, the department outlined for Northwest Suburban College, in Illinois, how it would provide “further flexibility” for institutions, and in some cases “fully or partially relieve institutions from having to comply with certain conditions.”

The department extended a December 31 deadline for a site visit to February 28. “As noted in the department’s prior communication, the 18-month deadline for obtaining new federally recognized accreditation is statutory and the department has no authority to extend it,” the letter read. “The department has nevertheless determined it would be appropriate to further relax the site-visit deadline.”

Institutions that cannot meet the February 28 deadline can notify the department within 10 days and may be eligible for a further extension of the deadline. Decisions must be made by June 12 on institutions’ applications for new accreditation.

The letter also relieves institutions of having to regularly report lawsuits or arbitration agreements against them, and removes a requirement to report all known investigations, as had previously been the case. Last week one such college chain, Florida Technical College, reached a $600,000 settlement following allegations that employees had submitted false federal financial-aid claims.

Further, the institutions are no longer required to submit information to a third-party auditor regarding outcomes such as cohort-default rates and loan-repayment statistics, or financial-responsibility metrics and retention rates. They are still required, however, to post a notice on their websites about the loss of accreditation.

Elizabeth Hill, an Education Department spokeswoman, responded to an inquiry from The Chronicle about the letter. “All Acics member institutions know about the June 2018 deadline for finding a new accreditor. Their provisional PPAs with the department require all Acics institutions to post a notice to its public-facing website about its loss of recognized accreditation,” she said in an email message. “Moreover, institutions that failed to submit an application with a new accreditor by June 12, 2017, are not eligible to receive or disburse any Title IV funds for students who enroll after that date. So there was and continues to be a clear incentive for schools to find a new accreditor.”

Still, critics worry that by relaxing the requirements, the department is putting institutions’ interests ahead of students’.

“The whole point of ED’s original conditions was to make sure a school could not continue receiving federal aid for months without any serious effort to find accreditation elsewhere,” said Ben Miller, a senior director for postsecondary education at the Center for American Progress, a liberal think tank. “It’s especially fitting that the department felt like it wasn’t important to know about complaints or investigations months before yet another Acics school settled a lawsuit around allegations of wrongdoing.”

The department’s actions have raised the prospect that it may decide to restore the embattled accreditor’s eligibility. The council is currently applying to have its recognition restored, and is slated to go before the National Advisory Committee on Institutional Quality and Integrity, which will make a nonbinding recommendation to the department.

Read the full letter here:

Eric Kelderman contributed to this article.

Adam Harris is a breaking-news reporter. Follow him on Twitter @AdamHSays or email him at adam.harris@chronicle.com. Eric Kelderman writes about money and accountability in higher education, including such areas as state policy, accreditation, and legal affairs. You can find him on Twitter @etkeld, or email him at eric.kelderman@chronicle.com.