Betsy DeVos reinstates controversial for-profit college watchdog

A controversial for-profit college watchdog terminated by the Obama administration officially has the authority to oversee schools once again, thanks to a decision issued Wednesday by Secretary of Education Betsy DeVos.

DeVos restored federal recognition to the Accrediting Council for Independent Colleges and Schools (ACICS) Wednesday, ending roughly two years of limbo for the organization, which began after the Obama administration withdrew recognition from ACICS in 2016. ACICS and other college accreditors require federal recognition in order to operate.

College accreditors like ACICS serve as gatekeepers to billions of dollars of federal financial aid that flow to colleges, particularly those in the for-profit sector.

Though seemingly wonky, the decision has the potential to affect millions of students and the future of the for-profit college industry. College accreditors like ACICS serve as gatekeepers to billions of dollars of federal financial aid that flow to colleges.

Without an accreditor’s stamp of approval, colleges can’t access that money, which is crucial to the financial stability of many colleges, particularly those in the for-profit sector.

In the months leading up to Wednesday’s decision, borrower advocates have worried that allowing ACICS to once again oversee colleges could put students at risk. ACICS maintained the accreditation of Corinthian Colleges, a for-profit chain, which collapsed in 2015 amid allegations the school used inflated job placement and graduation rates to lure students, up until its demise.

In the three years leading up to 2016, 17 colleges facing investigations and overseen by ACICS took in $5.7 billion in federal financial-aid dollars, according to the Center for American Progress, a left-leaning think tank.

“This decision undermines accreditation as a reliable authority,” said Antoinette Flores, an associate director of postsecondary education at CAP. “It’s sending the message to other agencies that there no consequences when you repeatedly make the wrong decision.”

Wednesday’s decision from DeVos comes after years of legal battles over ACICS’s future. The accreditor sued to block the decision to terminate its recognition. As part of that case, the court found that Obama-era officials failed to consider evidence submitted by ACICS and ordered the Department to re-evaluate the case.

A Department staff report released earlier this year — well into the two-year reform period — still found over 50 problems with the way ACICS was run.

At that time, DeVos decided to temporarily restore the accreditor’s recognition. This latest decision restores the Department’s recognition officially.

DeVos’s decision was based on the Department’s “thorough review of the previously neglected documents,” as well as a 77-page recommendation from a senior official at the agency, Liz Hill, a Department spokeswoman, wrote in an emailed statement.

As part of the decision issued Wednesday, DeVos is requiring ACICS to submit reports within 12 months demonstrating it’s in compliance with two recognition criteria it’s currently failing to meet — a provision, which requires accreditors use competent representatives and one which requires accreditors protect themselves from conflicts of interest.

DeVos is also requiring ACICS to submit annual reports on job placement verification and other categories.

Michelle Edwards, the president of ACICS praised DeVos’s decision in a statement, saying that the accreditor’s officials consistently maintained that ACICS met the criteria for federal recognition.

“In the past two years, ACICS has implemented significant reforms designed to address concerns and enhance our ability to hold schools accountable for meaningful student outcomes,” she said in the statement.

But a Department staff report released earlier this year — well into the two-year reform period — still found more than 50 problems with the way the organization was run.

Given ACICS’s history of accrediting troubled for-profit colleges, Flores says she worries that reinstating the accreditor will allow schools to operate with limited accountability. “It sends the message to predatory colleges that they can continue to get away with bad actions,” she said of the decision.

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Jillian Berman covers student debt and millennial finance. You can follow her on Twitter @JillianBerman.

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