Independently assessing colleges’ financial health is one of the most important things accreditors do. More often than not, however, they keep the assessments to themselves.
That’s the case, a Chronicle analysis shows, even when accreditors are worried that a college’s financial woes may pose a risk to its educational quality. The accreditors may have put colleges on internal watch lists for financial reasons and demanded extra data from administrators—with only an obscure hint, or no hint at all, to anyone checking the accreditors’ Web sites for just that kind of heads-up.
For the analysis, The Chronicle sampled the notification practices of 14 regional and national accreditors, which oversee dozens of institutions where financial concerns have recently been documented.
Several accreditors said they were cautious about publicizing early-stage inquiries, out of concern that doing so may discourage institutions from being candid. They also said public notification could turn a small issue into a big one if the issues aren’t well understood.
But some accreditors, like the Accrediting Council for Independent Colleges and Schools, won’t inform the public that an institution is subject to special monitoring until accrediting officials believe the situation has become dire enough to threaten the college’s accreditation. The commission accredits about 900 institutions, most of them for-profit.
It says at least 10 colleges are now subject to “enhanced monitoring” for financial reasons, including three identified by The Chronicle: City College, in Florida; Schiller International; and Southwest Florida College. But a prospective student or instructor checking the council’s Web site for information “wouldn’t know that from our postings,” said the council’s executive director, Albert C. Gray.
And even among accreditors whose policy is to provide public notification when they’ve initiated financial inquiries, such reporting is often inconsistent, The Chronicle found—or so cryptic as to be indecipherable by anyone not fluent in accreditationspeak.
Frequently such reporting is “opaque,” acknowledges Ralph A. Wolff, president of the Western Association of Schools and Colleges, where The Chronicle‘s analysis focused on three institutions: Cogswell Polytechnical College, Phillips Graduate Institute, and Providence Christian College. The association’s public records on financial monitoring for each of them were months out of date, error-ridden, and confusing, the analysis found.
Mr. Wolff said he couldn’t explain the delays or the errors. He said the information provided by his association and other accreditors should be clearer. “I think people need to know more,” he said. The association, one of six regional accreditors, has just decided to begin disclosing more information about the institutions it accredits.
Indicators of Distress
To test the reporting practices of accreditors, The Chronicle examined publicly available accrediting records for the 30 colleges with the lowest possible scores on the Department of Education’s “financial responsibility” test for the 2010 fiscal year. Scores, which are derived from colleges’ audited financial data, run from a low of minus 1 to a high of 3. For that year, 180 institutions failed to achieve at least a 1.5, the minimum passing score.
Some higher-education associations question the validity of the financial-responsibility scores as measures of colleges’ financial health. But there is little dispute that scores below zero, such as those for all of the institutions The Chronicle examined, are at least indicators of possible financial distress.
“Philosophically, we consider the school’s financial condition the canary in the coal mine,” and the scores are a measure of that, says Randall E. Bell, director of the Commission on Accreditation at the Association for Bible Higher Education. It accredits two of the 30 institutions in the analysis, Horizon College of San Diego and Crossroads College. Both show up on the association’s online directory as fully accredited, with no indication of any issues—even though Horizon is now on probation. That fact that can be ascertained only by a detailed search of the association’s Web site.
“I didn’t realize it was so obscure,” said Mr. Bell. The Web site was redesigned a month ago, and that may account for the failure to list the institution’s probation status in the main directory, he said. The inaccuracies are a concern, he added. “Students and parents depend on us to alert them to a condition of the school.”
Even when the records are accurate, they may not be very informative. The Commission on Accrediting at the Association of Theological Schools accredits three of the 30 institutions. The commission has asked each of the three to provide additional financial data, and one of them, Urshan Graduate School of Theology, has been asked to report by January on its ability to maintain its financial equilibrium. But that would have been hard to know from the language next to Urshan’s name on the commission’s Web site: “Year-month (subject) of next focused visit(s): 2012 (Fall 2012—multiple issues).”
Dan Aleshire, executive director of the commission, said he realized that a “naïve reader” would have a hard time understanding the accreditor’s concerns. But “the public’s not beating down the door to get information from us,” he said. Urshan’s finances are a concern, he said, but the institution is still educationally effective. Since The Chronicle inquired, the association has replaced the phrase “multiple issues” with a more detailed explanation that includes the phrase “financial issues.”
Even if the public were asking for the information, some accreditors wouldn’t necessarily provide it.
The National Association of Schools of Music—which accredits the Los Angeles Music Academy, one of the 30 colleges—"does not offer any information other than the listing of accredited institutional memberships,” a spokeswoman said.
The Accrediting Bureau of Heath Education Schools oversees another of the 30, the Dallas Nursing Institute, but provides public information only when granting, withdrawing, or continuing accreditation.
The Web site of the National League for Nursing Accrediting Commission, accreditor of the Cochran School of Nursing, one of the 30, provided no information about the institution other than that it was accredited. The league did not respond to questions about its notification process.
Among regional accreditors, notifications were generally more forthright, although not always. For example, four of the 30 colleges are in the territory of the Higher Learning Commission of the North Central Association of Colleges and Schools. It sent “letters of concern” to each of them; responses from three satisfied the commission, but that’s not described publicly. The commission’s Web site shows only that the fourth, Kendall College, has been asked to file a financial-recovery plan by December to “address the continued concerns about low financial ratios"—if you knew to click on the name and scroll down to “reports required.”
“We do not typically include a lot of detail in those postings,” said Sylvia Manning, the commission’s president, “since our audience is a general public that is often not well served by a clutter of detail.”
