Despite collapsed colleges and an evidently fake school, this agency still approves millions in federal aid

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A college oversight agency that signed off several large for-profit colleges accused of defrauding students, and one seemingly without students or faculty, remains in business despite the federal government's repeated attempts to limit its power. 

The Accrediting Council for Independent Colleges and Schools was once one of the nation's largest college accreditors. It approved Corinthian Colleges and ITT Tech, both large for-profit colleges that shut down in the mid-2010s following increased federal scrutiny and fines tied to deceiving students. 

And it also approved Reagan National University, an institution that seemed to be a small for-profit college, but a Paste BN Network investigation revealed had no evident students or faculty. The school withdrew its accreditation days before the investigation ran and someone has since pulled the school's website down.

The U.S. Department of Education launched an inquiry into the agency in 2020 following that story, and the inquiry played a part in the federal government stripping the agency of its power to accredit schools in June 2021.

But ACICS appealed that decision in July 2021 and, absent action from the Education Department, it remains operational. Within the last year, the accreditor continued the accreditation of several universities through 2023.

The lack of action by the Education Department comes at a time when the agency has said publicly it plans to ramp its oversight of predatory colleges that deceive students and benefit from federal money meant to help students. The Education Department even revitalized an office in the department meant to monitor these institutions, and it has forgiven billions in student loan debt for students defrauded by these institutions. 

But college accountability advocates said they have yet to see that sentiment translate to action.

“If the Department believes ACICS is qualified to serve as an accrediting agency, they should issue that determination,” said Aaron Ament, president of the National Student Legal Defense Network, a watchdog group that has sued the federal government over how it's handled debt relief for students defrauded by universities. "By allowing this appeal to rest in limbo, the Department is permitting ACICS — despite its horrible track record — to bless countless other institutions at the expense of more students’ financial and educational futures."

The Education Department declined to offer details about the status of the appeal other than to say it is “conducting a thorough review and the process remains ongoing.”

ACICS didn’t return Paste BN’s requests for comment, but Michelle Edwards, the group’s president, has said she felt the accreditor was unfairly targeted by the federal government. 

“I believe that department staff assumed facts simply not in evidence and ignored relevant evidence,” Edwards said in an address to its membership in June 2021. “And I believe the department staff at times misread, misunderstood or misapplied both the recognition regulations and the ACICS accreditation standards and policies in forming its recommendations.” 

This limbo is familiar to ACICS. The Obama administration-era Department of Education had also stripped the agency of its power in 2016. But following a federal court decision, the Trump administration-era department under then-Secretary of Education Betsy DeVos reinstated the accreditor in 2018.

What is happening with the Accrediting Council for Independent Colleges and Schools? 

Accreditation doesn't normally generate a lot of attention, said Kevin Kinser, a professor of higher education at Pennsylvania State University who studies accreditation and for-profit colleges,

"The people who follow it are, you know, wonky people and it rarely raises to the level that the secretary of education is paying attention to it." 

Accreditors operate independently of the federal government, but their approval by the Education Department allows them to decide which colleges can access federal money, including student loans or Pell Grants. 

Some accreditors oversee hundreds of institutions, including large public universities and prestigious private universities, making them difficult to shut down even if they were out of line with the Education Department's standards, Kinser said.

Or the government may choose to allow a small accreditor facing financial issues to fold on its own. ACICS is novel both for the number of institutions it had represented and the different enforcement actions across three presidential administrations, Kinser said. 

ACICS oversaw 290 institutions in 2016, making it one of the largest college accreditors at the time. Those numbers have dwindled in recent years as colleges sought new accreditors in the face of ACICS’ uncertain future. Its current members include small colleges offering associate degrees in nursing, veterinary programs and massage along with some traditional bachelor's degrees. 

ACICS had about 37 institutions with 48 locations and about 16,000 students, according to federal data presented to an accreditor oversight committee in July 2021. Edwards, however, said in June 2021 that the agency accredited 82 campuses-- one college may have multiple campuses-- with about 40,000 students.

ACICS institutions collectively received about $160 million in federal money meant for financial aid, according to the same federal report. 

It takes a lot of time and effort to strip an accreditor of its federal recognition. Both career staff at the Education Department and a separate oversight board made up of college administrators or those with connections to higher education issue recommendations to the department as part of routine reviews of accreditors. In the case of ACICS, both parties recommended the agency be stripped of its recognition. 

Following those recommendations, a senior department official makes an independent decision. In the letter announcing the decision, Jordan Matsudaira, a deputy under secretary, noted that ACICS was the subject of multiple inquiries about the quality of its oversight and that its “significant and systemic noncompliance with multiple regulatory recognition criteria leaves me no reasonable option but to terminate its recognition, effective immediately.” 

What does an accreditor have to do with student debt forgiveness?

ACICS’s presence can still be felt in the modern college landscape. The federal government recently forgave nearly $6 billion in student loan debt for any student who had borrowed to attend Corinthian Colleges. ACICS extended accreditation to several dozen schools operated by Corinthian Colleges

“Had ACICS done its job, Corinthian would not have been allowed to scam students for so long, leaving taxpayers on the hook for this enormous tab,” Ament said.

The federal government has also been wiping away the debt of many students who attended ITT Tech, which was also accredited by ACICS. In August 2021, the department announced it would make $1.1 billion available to students who had attended the university through a program that clears the debt of students whose institutions closed suddenly. And in a separate action, the department erased the debt of roughly 23,000 borrowers who it found ITT had defrauded. The total debt discharged there is worth $660 million. The agency is also still reviewing claims for debt relief associated with ITT Tech.

ACICS has argued it followed federal standards in reviewing colleges and that it is unfair to blame the agency for the misdeeds of colleges over which ACICS had no control.  With respect to Reagan National, ACICS said the school withdrew from the accreditation process shortly before Paste BN’s story was published and that it appeared to be a functioning school when accreditors visited.

Stripping ACICS of its recognition would send a message to accreditors of for-profit colleges, said Kinser. 

"The implication is, at least under this administration, you can't come back," he said. "That the sins committed in the past were so severe that no penance can make up for it."