Ed­u­ca­tion sec­re­tary de­nies ac­cred­i­tor

More than 250 for-profit col­leges may face clo­sure

The Washington Times Daily - - NATION - BY JEFF HOR­WITZ

Fed­eral ed­u­ca­tion of­fi­cials are stand­ing by their de­ci­sion to cut ties with the na­tion’s largest ac­cred­i­tor of for-profit col­leges — a rul­ing that will bar hun­dreds of schools from pro­vid­ing fed­eral fi­nan­cial aid and likely force some to close.

The Ac­cred­it­ing Coun­cil for In­de­pen­dent Col­leges and Schools (ACICS), which over­sees more than 250 in­sti­tu­tions na­tion­wide with a com­bined en­roll­ment of 600,000 stu­dents, had ap­pealed a Septem­ber Ed­u­ca­tion Depart­ment de­ci­sion to strip it of cre­den­tial­ing au­thor­ity.

In a state­ment, ACICS In­terim Pres­i­dent Roger Wil­liams said the or­ga­ni­za­tion would “seek im­me­di­ate re­dress from the courts” to avoid los­ing recog­ni­tion as an ac­cred­i­tor.

But should the de­ci­sion stand, it will set off a scram­ble among ACICS ac­cred­ited schools to find a new ac­cred­i­tor and force stu­dents to con­front the pos­si­bil­ity that their school might close.

The schools are el­i­gi­ble to con­tinue of­fer­ing fed­eral fi­nan­cial aid to stu­dents for as long as 18 months while they seek a new ac­cred­i­tor.

But within 30 days, the schools must pro­vide the gov­ern­ment with a “teach-out plan” to pro­vide an or­derly shut­down if nec­es­sary. Schools that don’t ap­pear to be on track to meet the stan­dards of an­other ac­cred­i­tor will face lim­its on their abil­ity to en­roll new stu­dents and will see tight­ened records re­ten­tion re­quire­ments. They also may be re­quired to post a let­ter of credit to cover at least part of the gov­ern­ment’s po­ten­tial losses on failed schools’ loans.

The ac­tion to re­move fed­eral recog­ni­tion of ACICS came af­ter a lengthy review of its op­er­a­tion. Both Ed­u­ca­tion Depart­ment staff and a fed­eral ad­vi­sory panel over­see­ing ed­u­ca­tional ac­cred­i­tors rec­om­mended the ac­tion based on ACICS’ al­leged long-stand­ing fail­ure to com­pe­tently han­dle its over­sight du­ties.

Ed­u­ca­tion Sec­re­tary John King Jr.’s re­jec­tion of ACICS’ ap­peal was the last step. De­scrib­ing “a pro­found lack of com­pli­ance” with fed­eral stan­dards for ac­cred­i­tors, Mr. King dis­missed ACICS’ ar­gu­ment that stu­dents would be hurt by re­mov­ing its ac­cred­i­tor sta­tus.

“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,” Mr. King wrote.

For stu­dents at closed schools, the gov­ern­ment would of­fer for­give­ness of fed­er­ally guar­an­teed stu­dent loan debt.

Among the gov­ern­ment’s con­cerns were the poor em­ploy­ment out­comes among stu­dents at the ACICS in­sti­tu­tions and find­ings of fal­si­fied grad­u­ate em­ploy­ment rates.

Some of the coun­cil’s schools had been in­ves­ti­gated for fraud and other mis­con­duct, in­clud­ing the now-de­funct Corinthian Col­leges and ITT Tech­ni­cal In­sti­tute chains. At Corinthian alone, thou­sands of its for­mer stu­dents are ask­ing the Ed­u­ca­tion Depart­ment to for­give their fed­eral loans, in a tax­payer bailout that could top $3 bil­lion.

The move comes af­ter the high-pro­file fail­ure of ma­jor for-profit col­lege chains amid ques­tions about their busi­ness prac­tices and the qual­ity of the ed­u­ca­tion they of­fered.

In Septem­ber, ITT Tech­ni­cal In­sti­tute an­nounced it was shut­ting down all 130 of its U.S. cam­puses, leav­ing more than 35,000 stu­dents scram­bling across more than 30 states. The chain was banned in late Au­gust from en­rolling new stu­dents who used fed­eral fi­nan­cial aid be­cause Ed­u­ca­tion Depart­ment of­fi­cials said the com­pany had be­come a risk to stu­dents and tax­pay­ers.

Schools ac­cred­ited by ACICS re­ceived $4.7 bil­lion in fed­eral stu­dent aid last year, money that will be cut off af­ter 18 months if the schools do not find a new ac­cred­it­ing agency. Be­cause the over­whelm­ing ma­jor­ity of stu­dents use fed­eral loans to fi­nance their ed­u­ca­tions, ACICS ac­cred­ited schools will need to find new ac­cred­i­tors or shut down in most in­stances.

AS­SO­CI­ATED PRESS

Ed­u­ca­tion Sec­re­tary John B. King, Jr. de­nied the ap­peal of for-profit col­lege ac­cred­i­tor ACICS, sev­er­ing ties with the group that rep­re­sents more than 250 schools.

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