- The Education Department stripped ACICS, a school accreditor, of its federal status.
- The agency was scrutinized over signing off on major for-profits, like ITT Tech and Corinthian.
An agency that signed off on dozens of for-profit colleges and left students with big debt loads just got stripped of its federal status.
On Friday, President Joe Biden's Education Department announced that the Accrediting Council for Independent Colleges and Schools (ACICS) — an accreditation agency — will no longer be recognized as a entity that can approve schools to hand out federal financial aid, like student loans, to students.
As Under Secretary of Education James Kvaal wrote in a blog post, while accreditation is a "safeguard" to protect taxpayers and students, "there are recent examples of schools that have continued to be approved by their accrediting agencies even if they have misled or defrauded students, provided students with a poor education, or closed suddenly without appropriate preparation and supports for students."
ACICS accredited now-defunct for-profit schools like ITT Technical Institute and Corinthian Colleges, both of which were found to have defrauded students and loaded them up with debt, and U.S. Deputy Secretary of Education Cindy Marten officially decided to terminate federal recognition of the agency.
"Recognition by the Department must be reserved for agencies that adhere to high standards, just as accreditation by agencies must be reserved for institutions and programs that adhere to high standards," Marten wrote in her decision letter. She said ACICS has been found "noncompliant" since 2016, and its "continuing failure to reach full compliance with this criterion alone is a sufficient basis to terminate ACICS' recognition."
Currently, ACICS accredits 27 schools that enroll nearly 5,000 students. During a Friday press call, Kvaal explained that the decision to strip ACICS of its federal status "is not grounded in ACICS' history or reputation, but rather its continued long standing inability to come into compliance with the minimum standard expected of accreditation agency over the course of years." Those standards, he said, included adequate resources, staff expertise, and the ability to monitor at-risk institutions.
While ACICS is no longer federally recognized, the Education Department said it will continue to allow the institutions it accredited to participate in federal student aid programs up to 18 months from today. This will give those schools time to get accredited from a different agency.
For students enrolled at one of those schools, the department said they should reach out to the school for specific information on any changes they might see within the 18-month timeframe and prepare for the possibility the school might choose to close. If that's the case, the school is required to make plans for students to complete their degree elsewhere.
The troubled history with ACICS
In 2016, former President Barack Obama's Education Department moved to end federal recognition of ACICS following the major for-profit chains it accredited — ITT Tech and Corinthian — shutting down. But in 2018, former President Donald Trump's Education Secretary, Betsy DeVos, reinstated the agency after concluding it could improve compliance within a year, and later launched an investigation in 2020 into its practices.
When schools like the for-profits that ACICS accredited shut down, it can often leave students with debt but no degree. That dilemma gave rise to the borrower defense to repayment under Obama, which are claims students can file if they believe they were defrauded by a school, and if approved, the department would discharge their remaining student debt. Under DeVos, borrower defense claims ran up a backlog, which is why Biden's department has taken steps to approve borrower defense claims broadly, most recently wiping out billions of dollars in debt for remaining ITT Tech and Corinthian students.
The for-profit fraud also drew lawmakers to scrutinize ACICS. In 2018, Massachusetts Sen. Elizabeth Warren and some of her Democratic colleagues called on DeVos to rescind ACICS' reinstatement, writing in a letter that there were "major and ongoing falsehoods" surrounding DeVos' decision for reinstatement. In 2020, USA Today found ACICS had accredited a school that appeared to be fake, with no student enrollment, and following that investigation, Biden's department in 2021 moved to strip the agency of its federal status.
"ACICS has rubber-stamped the worst for-profit colleges to suck down taxpayer dollars for useless degrees. I pushed for @usedgov to pull the plug on ACICS in 2016 and again when DeVos reinstated them," Warren said at the time. "I'm glad we're one step closer to firing ACICS for good."
The agency appealed the decision last year, and Friday marked the end of that process. ACICS wrote in a statement on its website that it's "disappointed" by the department's decision.
"We believe it is deeply flawed and that ACICS has been in substantial compliance with any objective, consistent, and reasonable interpretation of the recognition criteria," it said. "We are evaluating all of our options and how best to serve our institutions, including any decision to appeal the Deputy Secretary's decision in federal district court. We will provide further details as they become available."