Education Department Establishes Enhanced Federal Aid Participation Requirements for ACICS-accredited Colleges

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US Department of Education

Dec. 12, 2016
Contact: Press Office
(202) 401-1576 or

Education Department Establishes Enhanced Federal Aid Participation Requirements for ACICS-accredited Colleges

Beginning today, the U.S. Department of Education will inform colleges accredited by the Accrediting Council on Independent Colleges and Schools (ACICS) of additional operating conditions required for continued participation in the federal student aid programs. These new provisions will apply to ACICS-accredited institutions and follow U.S. Secretary of Education John B. King Jr.’s final decision to withdraw federal recognition of the accrediting agency. 

Although ACICS is no longer a federally recognized accrediting agency, the Department may provisionally certify ACICS-accredited institutions for continued participation in the federal student aid programs for up to 18 months from the date of the Secretary’s final decision. This 18-month provisional certification period allows institutions to seek accreditation from another federally recognized accrediting agency.  During this period of provisional certification, the Department will require the ACICS-accredited institutions to comply with additional conditions that are designed to protect students and safeguard taxpayer dollars.  These conditions include additional monitoring, transparency, oversight and accountability measures. Only ACICS-accredited institutions that agree to these conditions may continue to offer Federal Loans and Pell Grants.

The Department’s Federal Student Aid office will promptly begin sending provisional program participation agreements (PPAs) to the affected institutions, which will have 10 days to respond affirmatively to the new agreements or will lose eligibility for federal student aid programs.

The additional PPA conditions establish triggers tied directly to milestones in the accreditation process to ensure that institutions not on track to receive accreditation from a federally-recognized accrediting agency within 18 months are subject to progressively stronger student and taxpayer protections. During the term of their provisional PPAs, institutions must also abide by requirements previously enforced by ACICS.

Within 30 days, all ACICS-accredited institutions will be required to submit teach-out plans for helping students complete their academic programs elsewhere if necessary, and submit information about recent and ongoing investigations to ensure the Department is aware of key risks in this new environment of reduced oversight.  

Additional conditions triggered by institutions missing milestones on the path to obtaining accreditation from a federally recognized accreditor include:

  • Submitting teach-out agreements to ensure a path to completion for students in the event of closure;
  • Providing enhanced disclosures to students regarding  potential loss of federal student aid eligibility;
  • Limiting enrollment of new students;
  • Submitting monthly student rosters and a record retention plan; and
  • Posting a letter of credit to protect against taxpayer losses associated with school closure.  

"Protecting and supporting students throughout their education is the Department’s chief priority. When we find that an accrediting agency is not effectively protecting students, and is putting taxpayer funding at risk, we will use every tool we have to hold it accountable—just as Congress requires and families expect,” said U.S. Under Secretary of Education Ted Mitchell. “In this case, that means that we more closely monitor their schools in the absence of a reliable accreditor. During this transition, we will do everything we can to help students continue on the path to complete their programs.”

ACICS No Longer Recognized as Federal Aid “Gatekeeper”

Today, U.S. Secretary of Education John B. King Jr. informed ACICS of his decision regarding its appeal of the Senior Department Official’s Sept. 22 decision to end federal recognition of the accrediting agency.  His determination is consistent with the Department’s accreditation staff recommendation and the recommendation of the National Advisory Committee on Institutional Quality and Integrity (NACIQI), a bi-partisan, independent advisory board appointed by Congress. Secretary King’s decision is the Department’s final action. Effective immediately, ACICS is no longer a federally recognized accrediting agency, and can no longer serve as a “gatekeeper” of institutional eligibility for federal student aid programs.

In his decision, Secretary King noted, “I find ACICS to be out of compliance with numerous agency criteria. Because of the nature and scope of ACICS’s pervasive noncompliance, I further conclude that ACICS is not capable of coming into compliance within 12 months or less, even if I renewed its recognition for an additional 12 months.” He added, “The interests of students are of foremost concern to me and this Department, but students’ interests are best served by proper application of the recognition criteria. This is also required by law.”

As the accreditation staff analysis of ACICS noted, the Department identified significant areas of concern, including insufficient institutional monitoring, failure to meet its Title IV responsibilities, lax enforcement of the agency’s existing accrediting standards, particularly the student achievement standard, and the rigor of the agency’s accreditation and pre-accreditation standards. In accordance with agency recognition renewal procedures, this analysis was shared with NACIQI and informed its recommendation to withdraw federal recognition of ACICS.

ACICS accredits approximately 250 institutions participating in federal student aid programs according to information from the College Scorecard and the Department’s institutional database. These institutions enroll roughly 300,000 undergraduate students who receive federal aid. 

Strengthening the Accreditation System

As part of an ongoing commitment to strengthen the transparency and rigor of accreditation for colleges and universities, the Department has taken a series of steps to promote outcomes-driven accountability, such as:

  • Streamlining the process for accreditors to share information about institutional statuses. Institutional accreditors are now required to submit decision letters when they place Title IV eligible institutions on probation. The Department will soon begin to post online all publicly releasable portions of such letters.
  • Publishing each accreditor's standards for evaluating student outcomes. The Department has published each federally recognized agency's stated student achievement measures, including any specific thresholds. Accreditors are required by statute to set standards for student achievement for schools to maintain their accreditation status. Yet there are significant differences in the form, specificity, and performance levels among accreditors. Under current law, the Department is barred from establishing any criteria for agency standards of student achievement. This allows some accreditors to set low or difficult-to-measure thresholds to maintain accreditation status, and others to rely on reviews of thresholds established by the institutions they accredit. Shining a spotlight on current standards is an initial step toward strengthening them.  
  • Publishing key student and institutional metrics for postsecondary institutions arranged by accreditors. In June, the Department published “accreditor dashboards” based largely on data largely from the College Scorecard, designed to help policymakers, experts, and the public better understand the student outcomes of institutions that are approved by particular accrediting agencies. These dashboards illustrate the performance of all colleges and universities in each accreditor's institutional portfolio relevant to those measures.
  • Promoting greater emphasis on outcomes within current accreditor review processes. Staff in the Office of Postsecondary Education now have access to critical outcomes data, state and federal litigation reports, and other information about each agency's schools prior to conducting their reviews. This information helps Department staff determine which questions to ask accreditors in preparation for reviews, and helps them evaluate accreditor effectiveness, especially with respect to struggling institutions. Through the accreditor dashboards, the Department supplied outcomes information to NACIQI in advance of its June 2016 meeting to support its training and policy development activities, to help it frame a policy agenda regarding the agency recognition process, and for its own evaluation of accreditor standards and processes. In addition, the Department, within the scope of its current authority, has encouraged accreditors, to apply outcomes-directed measures in accreditation and monitoring of institutions that have weak outcomes.

Shared Responsibility in Ensuring Institutional Accountability

Despite the Department’s efforts to strengthen the accreditation system, more work remains. Congress, states, and accreditors must also join in these efforts.

States play an important role in overseeing colleges and universities. And they must take seriously their long-standing role in consumer protection through a robust state authorization and oversight process, as well as ensure active compliance and monitoring of institutions doing business in their states. There is significant opportunity for state attorneys general and state higher education authorizing and licensure bodies to strengthen their coordination and collaboration with one another within and across states in an effort to identify problems, protect students, and hold schools accountable. The Department stands ready to support those efforts.

All accreditors must raise the bar for quality, promote transparency, and renew their focus on student outcomes—not just inputs. And all accreditors must take seriously their responsibility to monitor and take swift action against schools that attempt to defraud their students.

Congress must do more to protect students from unscrupulous institutions that deceive students into taking on debt they will never be able to repay and stick taxpayers with the bill. We must strengthen, not weaken, accountability in higher education. In November 2015, the Department issued a set of legislative recommendations for strengthening accreditation, which include strengthening outcomes-driven and focused review and recognition of accreditors; requiring robust teach-out plans and reserve funds for high-risk institutions; standardizing terminology and reporting of accreditation actions and key outcomes; and increasing transparency on an expanded set of accreditation material and actions.