Create a free Diverse: Issues In Higher Education account to continue reading

New Analysis Calls for Increased Scrutiny of Accrediting Agency

090915_Corinthian_CollegeThe same agency that accredited the now-defunct Corinthian Colleges warrants additional scrutiny because students at the institutions under its watch default on their student loans at a rate well above the national average.

That is the conclusion of a new analysis released Tuesday by the Center for American Progress, a left-leaning think tank based in Washington, D.C.

The analysis found that one out of every five borrowers at a college accredited by the Accrediting Council for Independent Colleges and Schools, or ACICS, defaults on his or her loans within three years of entering repayment—a rate 50 percent higher than the national average.

Such high default numbers are particularly troubling because students at ACICS-accredited colleges take out student loans at higher rates and in greater amounts than those at colleges accredited by other agencies,” states the analysis, written by Ben Miller, Senior Director for Postsecondary Education at the Center for American Progress.

The analysis states that, while ACICS’ performance is worse than that of its peers, its problems are “emblematic of larger structural flaws that exist in this national accreditation space.”

This is not an arcane policy matter,” Miller states in his paper. “As the gatekeepers to federal student aid, accreditorslax approval standards can open the door to mass fraud that undermines confidence in loan programs and the broader postsecondary education system.”

Though the paper refers to ACICS’ failed oversight of Corinthian Colleges—a for-profit college company that closed and filed for bankruptcy earlier this year amid allegations of fraud and led the federal government to issue billions of dollars in loan forgiveness to its former students—it says the default rates at the agency’s schools point to much larger problems.

An official at ACICS said his agency planned to do a review of Miller’s analysis and release a statement about it in the coming weeks.

Anthony S. Bieda, vice president of external affairs for ACICS, also told Diverse that the analysis provokes interesting questions for accreditors to consider, such as whether accreditors should pay greater attention to student loan default rates, which he said are largely associated with other risk factors, such as being low-income or a first-generation college student.

Is it possible that some institutions that we have reviewed and are demonstrating acceptable or above acceptable rates of quality but have higher cohort default rates should in fact be subject to greater scrutiny?” Bieda said. “Likewise, are there other institutions that we have deemed to have marginal or even below satisfactory quality indicators but have acceptable cohort default rates that we should just leave alone?

That’s the conundrum this type of analysis and review provokes,” he said.

Bieda said ACICS would have to think “long and hard” about whether other quality review standards—such as classroom observation, file reviews and face-to-face interviews with faculty and administrators—should “take a backseat to whether the cohort default rate is higher than average.”

Miller found in his analysis that 21 percent of borrowers at ACICS-accredited schools defaulted on their loans within three years of leaving their respective institutions.

That percentage is the highest of all national accreditors, which—as a whole—tended to have higher default rates than most regional accreditors.

What’s problematic about ACICS, however, is that it not only has the highest rate of defaulters along with one other accreditor but it also has the highest rate of students who borrow federal student loans: 73 percent.

It also has higher average debt and lower completion figures than any other national accreditor,” the analysis states.

Specifically, students at ACICS-accredited institutions tended to borrow an average of $7,960 in a single year, whereas most students at schools accredited by other agencies tended to borrow an average of less than $7,000.

For a sense of scale, the analysis notes that, of approximately 346,000 students at ACICS colleges who entered repayment in 2011, more than 73,000 ultimately defaulted.

This number is nearly one-third higher than the number of defaulters for the Middle States Commission on Higher Education, which had slightly more than 54,000 defaulters despite having 234,000 more borrowers than ACICS,” the analysis states.

The analysis also offers up reasons as to why national accreditors such as ACICS tend to have higher cohort default rates at their schools than those of regional accreditors.

First, students attending nationally accredited colleges tend to be lower income. Specifically, 62 percent of students at nationally accredited institutions receive Pell Grants, versus 38 percent of students at regionally accredited institutions.

Second, 78 percent of the credentials awarded each year at nationally accredited colleges are certificates.

Many of these certificates do not lead to particularly high incomes and provide returns well below the expected results for bachelors degrees, which make up 56 percent of the credentials that regionally accredited colleges award each year,” the analysis states. “Borrowing more for lower-return programs means that students may have more trouble paying off their student loans.”

The analysis notes how national accreditation agencies appear to outperform regional accreditors on completion, but even that does not say much about quality.

This is due to the mostly shorter programs that nationally accredited colleges offer,” the analysis states.

Miller concludes the current accreditation system “does an insufficient job of dealing with quality—at least with respect to the intersection between student debt and borrowersability to pay it back when they enter the workforce.”

Fixing this issue will require addressing several questions, such as which outcomes should be considered when determining quality, who should conduct quality investigations, and what kind of minimum standards need to be in place to ensure quality,” the analysis states. “These are all major issues that must be decided in order to ensure that the postsecondary system actually provides students the results it promises.”


Jamaal Abdul-Alim can be reached at [email protected]. Or follow him on Twitter @dcwriter360.

A New Track: Fostering Diversity and Equity in Athletics
American sport has always served as a platform for resistance and has been measured and critiqued by how it responds in critical moments of racial and social crises.
Read More
A New Track: Fostering Diversity and Equity in Athletics