Who Keeps Billions of Taxpayer Dollars Flowing to For-Profit Colleges? These Guys
Accreditation agencies are supposed to make sure that colleges are putting students in a position to succeed. That’s not happening at schools overseen by one accreditor in particular.
Albert C. Gray, president of the Accrediting Council for Independent Colleges and Schools, during a Senate hearing in June. (help.senate.gov)
For-profit universities have had another rough year, with big players facing federal scrutiny for everything from predatory loans to outright fraud.
Now attention is turning to the schools’ accreditors.
Accreditors are supposed to make sure that schools provide students with a quality education. They are not government agencies, but wield enormous power: Schools need accreditors’ stamps of approval to maintain access to the government’s annual $170 billion in federal student aid.
Losing accreditation would be fatal for most for-profit schools since they rely on federal aid for much of their income. But accreditors rarely crack down, even when students are struggling. One of the areas where students at for-profits face extra burden is debt: While only one-tenth of college students attend for-profit schools, they account for nearly half of all students’ defaults.
What role are accreditors playing? Using recently released federal data, ProPublica analyzed how students are faring under the various accreditors that oversee many for-profit schools.
One accreditor stands out: The Accrediting Council for Independent Colleges and Schools, also known as ACICS. It oversees hundreds of mainly for-profit schools where students struggle at remarkably high rates.
Just 35 percent of students at a typical ACICS-accredited four-year college graduate, the lowest rate for any accreditor. Nationally, the graduation rate at four-year schools is around 59 percent. (Read our methodology for details on how we crunched the numbers for our analysis.)
“If you don’t graduate anyone, you can’t make claims that your program is any good,” said Ben Miller, senior director for postsecondary education at the Center for American Progress.
Students at ACICS-accredited four-year schools also take on more debt than students at other schools with similar accreditors, typically about $26,000 in federal loans.
And then students struggle more to pay off the loans: At a typical ACICS-accredited school, about 60 percent of students were unable to repay even $1 of their loan principal within three years of graduation. That’s 23 percentage points higher than the national average. (Miller also did a study this summer that found that more than one in five students at ACICS-accredited schools default on their loans.)
Anthony Bieda, vice president for external affairs at ACICS, told ProPublica that the organization does hold schools accountable. While ACICS does not track student debt load and loan repayment, it does look at other indicators, such as job placement figures and default rates.
Bieda also says there’s a reason ACICS-accredited schools may look worse: they enroll poorer students. At a typical ACICS-accredited school, 75 percent of students receive federal grants designed for low-income families, a much higher proportion than similar accreditors.
“The primary predictor of whether or not a student will default on their student loan is their economic circumstances, not the quality of the institution that they enroll in,” he said.
Targeting poor students is exactly what regulators are concerned with. Take Corinthian Colleges, for example, which was the second-largest for-profit college chain in the country until it went bankrupt earlier this year. Before it closed down, the for-profit empire faced federal allegations of using deceptive advertising to lure poor students into predatory loans. Last week, a federal district court in Illinois found Corinthian liable for more than $530 million, the entire amount of the predatory loans.
Miller, who previously served as a senior policy advisor at the U.S. Department of Education, said that a student’s socioeconomic background is not the only factor that determines whether loans are repaid. “No one would pretend that there aren’t demographic factors that influence results, but we can’t pretend the schools don’t have any effect too,” he said.
The Obama administration appears to agree. A few weeks ago, the Department of Education announced that it’s about to launch a push for accrediting agencies to focus more closely on student outcomes.
Incoming Education Secretary John King, who will replace Arne Duncan at the end of the year, said in a press briefing on the changes that the focus in higher education needs to Who Keeps Billions of Taxpayer Dollars Flowing to For-Profit Colleges? These Guys - ProPublica:
How do students at accredited schools fare?
Our analysis shows that ACICS-accredited schools fare worse than at schools accredited by other agencies. See how ACICS stacks up compared to its peers.
Graduation Rate
Non-Repayment Rate (Three Years After Leaving School)
Three-Year Default Rate
Median Debt of Students who Graduate (four-year schools)
Source: Department of Education Data; Note: We focused on the five largest national accreditation agencies and this chart only shows data for four-year programs. (See our methodology for more information.)
Credit: Annie Waldman and Sisi Wei/ProPublica
Credit: Annie Waldman and Sisi Wei/ProPublica