Exposing The College Accreditation Ripoff

Colleges and universities depend on positive ratings from private accrediting organizations to not only attract students but to be eligible for the federal loans and grants those students receive. But too often, those ratings don’t reflect reality; top ratings go to schools that are actively ripping off taxpayers, and leaving students with worthless degrees and mounds of debt.

That prompted Sen. Elizabeth Warren (D-Mass.) and other members of the Senate Committee on Health, Education, Labor and Pensions on Wednesday to ask sharp questions of a representative of the college accreditation business about the shady practices of the accreditors and their private interests.

The issue is central in the Corinthian College debacle, in which the for-profit chain of colleges went bankrupt after students rang up millions in student debt for degrees that were virtually worthless. About 90 percent of Corinthian’s revenues came from taxpayer cash.

Yet according to the accrediting organizations, Corinthian had been meeting standards on student debt and was adequately preparing graduates for jobs. Because they’ve been deemed “accredited,” Corinthian and similar for-profit scam schools had tapped almost $10 billion in federal aid.

“What is even the purpose of accreditation?” Sen. Christopher S. Murphy (D-Conn.) asked almost rhetorically.

Warren questioned panelist Dr. Albert C. Gray, president and CEO of the Accrediting Council for Independent Colleges and Schools.

“How do these institutions continue with their education? You accredit them right up to the minute they close,” stated Warren.

“We accredit them as long as they comply with our accreditation criteria,” stated Gray.

Exactly what the accreditation criteria is, is a mystery to everyone but the agencies. Thousands of students have been left penniless and jobless due to the hypocrisy of these organizations.

Warren explained, “But you’re [Gray] monitoring them, and they continue to be eligible for federal funding. You know, there have for years been concerns about Corinthian colleges, there were exposés, investigations, lawsuits, and yet the accrediting agencies continue to look the other way. Corinthian enrolled more students, it sucked more federal aid, while the private accrediting associations collected more fees. And now, students and taxpayers are stuck with the bill while there is no accountability for the private accrediting outfits.”

“Well I think you have to understand the accreditation process,” stated Gray.

“Yeah, I’m trying to do that,” huffed Warren.

In recent years, the accreditation process has drawn eerie parallels with the credit rating unions during the 2008 recession. Rating agencies that were being paid by the corporations they were rating offered overly favorable evaluations of insolvent financial institutions and approved risky mortgage-related securities which led to the $12.1 trillion bailout.

Likewise, college accreditation agencies get their money from the very colleges they are asked to rate.

“I think there is very little expectation on the value of the institutions who are being forced to push paper and spend money on this kind of a process,” stated Anne Neal, President of the American Council of Trustees and Alumni at Wednesday’s hearing. “Accreditors are not and cannot be ‘reliable authorities’ as to the quality of education or training offered, as required by statue. They are membership bodies, made up of the very people who benefit from Title IV.”

Title IV is the section of the Higher Education Act that governs the criteria for which institutions receive various forms of federal funding, including Pell Grants, Federal Work Study, Federal Supplemental Educational Opportunity Grant (SEOG), Federal Perkins Loan, and Federal subsidized and unsubsidized Direct Loans.

The Higher Education Act, which was last significantly changed in 1965, is slated for reauthorization by Congress later this year. The current gatekeeping process of accreditation is significantly failing our country and must be changed as part of this reauthorization. “A modern system of quality assurance would… end one-size-fits-all regional monopolies [of accrediting outfits] and let them once again become organizations of peer institutions.” stated Neal.

Without removing accrediting organizations’ role as gatekeepers for federal funding, taxpayers will have to continue shelling out millions of dollars into a system that cheats students and lies to the federal government. Instead of allowing privatized, self-interested accrediting outfits to approve fraudulent institutions, we must move to a system of public and peer reviewed agencies.

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