College Accrediting Organizations Lack the Sting to Regulate Predatory Colleges
June 23, 2015

To give their students access to federal loans and grants, many colleges secure the seal of approval of an accreditor. Yet, the approvals granted by these accreditors can be misleading. For instance, many colleges burden their students with immense volumes of student loan debt. But, they often do not meet the claims they made when the student enrolled. Similarly, many colleges have poor graduation rates. Yet, they continue to enroll students without any hindrances. This is typically because accreditors lack uniform standards for assessing loan defaults and graduation rates. As a result, even the worst performing colleges seldom get the boot.

The Accreditation Gimmick – Why Poor Performing Colleges Continue to Enroll Students

Andrea Fuller and Douglas Belkin report that the federal government provided approximately $16 billion in aid to students at four-year colleges in 2014. The Wall Street Journal however, highlights that many of these schools graduated less than one-third of their students in the preceding six years. It is worth noting that this $16 billion constituted about 20 percent of all the loans and grants to students at four-year institutions. Worryingly, the overall graduation rate for four-year colleges is just 59 percent.

The authors highlight that the six regional accrediting organizations together oversee more than 3,000 colleges. After analyzing the latest available federal data, The Wall Street Journal found that one in six regional commissions have accredited over 1,500 four-year colleges. However, nearly 350 of these have a lower graduation rate or a higher student-loan default rate than the average among the colleges that the same set of accreditors banished since 2000.

For instance, Fuller and Belkin cite the example of Kentucky State University. Nearly 30 percent of the school’s students who began repaying their loans in the 2011 fiscal year ended up defaulting within three years. In addition, the university has a graduation rate of just 18 percent. In 2009, The Southern Association of Colleges and Schools Commission on Colleges reaffirmed the accreditation for Kentucky State University. Interestingly, the accreditation report made no mention of loan defaults, choosing instead to laud the school for its plans to improve its graduation rates.

On their part, accreditors clarify that they focus on helping colleges improve, instead of weeding out the laggards. It is worth noting that colleges typically pay for these inspections, with large colleges paying as much as $1 million for each inspection.

What is the College Accreditation System?

The accreditation system originated at the start of the 20th century. At the time, a small number of colleges initiated this voluntary effort in an attempt to set standards for themselves. Keen to distinguish themselves from high schools, these schools created the accreditation system to promote themselves.

Ever since the 1950s, the government has relied on accreditors. As a result, accreditors began playing the role of watchdogs. Teams of volunteers from similar institutions would evaluate colleges that adhered to the standards prescribed by the accreditation group. Unfortunately, the law bars the Department of Education from overseeing the work of these accreditors. Therefore, these accreditors can review colleges and turn a blind eye to their default rates as was the case with Kentucky State University.

Accrediting Organizations Increasingly Losing their Sting

Since 2000, the accreditors have rescinded the membership of 26 educational institutions. This number includes 18 four-year colleges. In the year prior to their removal, the average graduation rate for these four-year colleges was 35 percent. These colleges also had an average student-loan default rate of 9.3 percent.

However, The Wall Street Journal reviewed current data and found that the graduation rate in 11 colleges approved by these accreditors was below 10 percent in 2013. About 20 colleges had a loan default rate of at least 20 percent from 2011 to 2012. Fuller and Belkin highlight these figures given the paucity of data on job placements and earnings after college.

The authors also found that accreditors had given glowing reviews to colleges with some of the worst graduation and loan default rates in the US. For instance, the caring and supportive faculty and staff at the University of Maine at Augusta came in for special praise in 2007. Yet, the school features a stagnant graduation rate of nearly 20 percent for students seeking bachelor’s degrees since 2004. Similarly, the Bluefield State College in West Virginia has a graduation rate of 25 percent or less since 2006. Yet, the accreditors did not refer to this fact in their report.

This is why President Obama outlined a proposal in 2013, whereby the federal government would offer access to loans and grants based on a new rating system. This rating system would typically compare colleges on various parameters such as:

  • Graduation rates
  • Student debt levels and,
  • Income after graduation

The idea behind this proposal is to make accreditors accountable for reviewing colleges more responsibly and objectively. However, Democratic and Republican lawmakers have opposed President Obama’s proposal, as they feel that the data is insufficient to warrant this move. But it’s clear that unless the authorities take measures to empower and regulate accreditors, many colleges will continue to make merry at the expense of their students.