ED Requiring Additional Hoops for ACICS Schools Looking to Keep Title IV Funding

By Brittany Hackett, Communications Staff

Following Monday’s announcement that the Accrediting Council on Independent Colleges and Schools (ACICS) has lost federal recognition, the Department of Education (ED) will soon inform institutions accredited by the agency of additional conditions required in order for them to continue to participate in Title IV programs.

Education Secretary John B. King, Jr., on Monday denied ACICS’ appeal of ED’s September 22 decision to end federal recognition of the accrediting agency, marking the final action ED can take on the matter. ACICS accredits around 250 institutions that enroll approximately 300,000 undergraduate students who receive federal aid.

In his decision, King said that he determined ACICS “to be out of compliance with numerous agency criteria,” and would not be able to re-enter compliance within 12 months or less, should he renew its recognition. “The interests of students are of foremost concern to me and this Department, but students’ interest are best served by proper application of the recognition criteria,” King said, adding that it is also “required by law.”

In a statement issued Monday, ACICS said that it “will immediately file litigation seeking injunctive and other relief through the courts.” The agency’s interim president, Roger Williams, said in a statement that ACICS is “deeply disappointed in this decision, as we believe it will result in immediate and meaningful harm to hundreds of thousands of students currently enrolled at ACICS-accredited institutions.”

According to a press release from ED, ACICS-accredited institutions can be provisionally certified by the Department for participation in Title IV programs for up to 18 months from the date of the Secretary’s final decision, allowing schools time to seek accreditation from another agency that is recognized by the federal government.

However, ED is requiring additional conditions for ACICS-accredited institutions during the provisional certification, which are “designed to protect students and safeguard taxpayer dollars,” according to the release. The additional conditions must be agreed to before an ACICS-accredited institution can continue offering federal student loans and Pell Grants. The schools must also continue to follow requirement previously enforced by ACICS.

The conditions include additional monitoring, oversight, transparency, and accountability measures, such as:

  • Submitting within 30 days teach-out plans for students who wish to complete their education at another institution in the event of a closure;
  • Submitting information about recent and ongoing investigations so ED is made aware of any risks;
  • Providing students with enhanced disclosures about the potential loss of federal student aid eligibility;
  • Limiting the enrollment of new students;
  • Submitting monthly students rosters and a plan for record retention; and
  • Posting a letter of credit to protect taxpayer losses that result from a school closure.

According to the release, these additional 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.”

The provisional participation agreements will be sent to schools by the Federal Student Aid office, at which time the schools will have 10 days to respond affirmatively to the agreement or lose eligibility to participate in the federal student aid programs.

In a blog post addressed to students at ACICS schools, ED Communications Director Matt Lehrich writes that students can expect to receive a notice from their school on whether an application with a new accreditor has been accepted within 120 days, or four months. Students who choose to transfer institutions regardless, or whose school closes rather than finding another accreditor, will have the option of pursuing a teach-out or a closed school discharge for their federal student loans, if eligible. According to Lehrich, students can expect to receive additional information from their institutions as decisions are made.

Reactions From the Hill, Higher Education Groups

The ACICS decision has received mixed reactions among policymakers and higher education advocates.

Betsy Mayotte, director of consumer outreach at American Student Assistance’s Center for Consumer Advocacy, praised the move, saying in a statement that it is “crucial to restore integrity to the accreditation process.”

“As a consumer advocacy center working on behalf of existing and prospective student loan borrowers and other students, we support all efforts to ensure accreditors are fulfilling their oversight responsibilities in a way that ensures fairness and transparency, and gives students the appropriate sense of security that that degree they are paying for will be worth more than the paper it’s written on,” Mayotte said.

“For years, ACICS looked the other way when schools were defrauding students and resisted calls for change,” Sen. Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, said in a statement. “The Department has sent a strong statement that we must protect our nation’s students and accreditors must fulfill their responsibilities. Additionally, the Department has taken critically important actions to protect students and safeguard taxpayer dollars during this time of transition.”

Republican leaders on the House Committee on Education and the Workforce, however, were critical of the decision, accusing the Department of overreaching and potentially harming students.

Committee Chair John Kline (R-MN), who is retiring at the end of this Congress, said while the decision “is certainly unprecedented, it comes as no surprise. This administration has led a continued and coordinated attack on career colleges and universities with little regard for the consequences of its actions.”

“The department’s decision will disrupt the education of students across the country, and it will hurt low-income and minority students the most,” Kline said. “There was another path that would have protected taxpayers and students, without disrupting hundreds of thousands of lives. Unfortunately, the secretary decided not to follow it.”

Rep. Virginia Foxx (R-NC), who will take over as committee chair in the next Congress, said that the decision “will hurt hundreds of thousands of students who have been working hard to earn a postsecondary education, and those students will find themselves in an incredibly difficult situation. … The accreditation process must provide students and taxpayers the highest degree of accountability, and that includes identifying and correcting concerns before hundreds of thousands of students are harmed.”


Publication Date: 12/14/2016

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