December 06, 2016

Democratic Senators Urge Education Department to Protect Students and Taxpayers Should For-Profit Accreditor Lose Federal Recognition

Senators have been leading critics of deadbeat ACICS which accredited now defunct Corinthian, ITT Tech, and Westwood Colleges

Washington, DC - U.S. Senators Dick Durbin (D-IL), Patty Murray (D-WA), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), and Richard Blumenthal (D-CT) today called on the U.S. Department of Education (ED) to take steps to protect students and taxpayers in the event that the Accrediting Council for Independent Colleges and Schools (ACICS), currently the nation's largest accreditor of for-profit colleges, loses federal recognition. ACICS losing federal recognition would require the approximately 250 schools currently accredited by ACICS to receive new accreditation from a federally recognized accreditor in order to remain eligible for Title IV federal student aid.

"It is likely some of these schools may not seek or may not receive new federally-recognized accreditation, leading to eventual loss of Title IV eligibility and potential closure, which could leave thousands of remaining students in the lurch," wrote the senators in a letter to Under Secretary of Education Ted Mitchell. "Also concerning is the potential for some former ACICS-accredited institutions, while provisionally certified, to attempt to amass as much federal student aid funding as possible to pad the pockets of executives and shareholders without any possibility or intention of continuing once the provisional period has expired."

In September, the Department made a decision to withdraw federal recognition from ACICS following a recommendation from the independent National Advisory Committee on Institutional Quality and Integrity. That decision is now pending appeal to the Secretary.

In the letter, the senators outlined steps the Department can take using its current authority to protect students, families, and ultimately taxpayers in the aftermath of withdrawal of ACICS' recognition. Recommendations include:

Halting new student enrollment at institutions not making progress obtaining new federally-recognized accreditation and placing limitations on institutions that pose substantial risks; 

  • Prohibiting institutional growth and expansion;
  • Requiring teach-out agreements; 
  • Prohibiting the use of mandatory arbitration clauses in student enrollment agreements;
  • Prohibiting bonuses and other excessive compensation;
  • Immediately placing institutions on Heightened Cash Monitoring;
  • Requiring letters of credit;
  • Requiring clear disclosures to students; and
  • Requiring disclosure of a denial of accreditation.

Full text of the letter is available here.