Changing Accreditation Rules for For-Profit Colleges

In 1965, the Higher Education Act was signed as an attempt at strengthening higher education and increasing student achievement. The law has evolved over time, currently requiring that students attend an accredited institution in order to receive financial aid from the U.S. government. However, there is a lot of debate as to whether accrediting agencies are ensuring that students get the most out of their education. In particular, online and for-profit educational institutions have come under scrutiny, according to a recent article in the Chronicle of Higher Education. With low retention and graduation rates, online colleges and universities have developed a poor reputation, causing the U.S. Department of Education (USDE) to establish new regulations for accrediting bodies. The hope is that accrediting institutions will fix the increasing number of problems that have developed within online institutions.


Enrollment in online education has increased over time, with as many as a third of all higher education students recorded as enrolled in an online course in 2009, according to a Sloan Consortium report cited in the Chronicle article. Though online education attracts a large number of students, it also loses a large number of students to drop-outs. The USDE has therefore begun to question whether online schools are working hard on student retention, assisting students in the development of the self-discipline skills necessary for success within online education, or if these schools are too focused on drawing a profit to put tuition money to use. This is of particular concern to the government because almost 90% of the money received by online institutions comes from federal financial aid.

The USDE wants accrediting bodies to strengthen their regulations on business practices. The goal is to prevent the abuse of profit, which will thereby ensure that students are getting the most out of their money. However, accrediting institutions have traditionally been assigned the job of making sure students learn, not with monitoring the flow of money within colleges and universities. As accrediting institutions are made up of volunteers with more knowledge of higher education than of the functions of a business, it may be unrealistic for the government to expect accrediting institutions to work as regulators. It is not legal for accrediting institutions to wield legal authority and conduct actual investigations, thereby making it difficult for them to fulfill the task of scrutinizing a school’s business practices.

Despite the limitations of accrediting institutions, someone needs to pay close attention to how colleges and universities use the financial aid they receive, it’s just a matter of whose lap into which that responsibility will fall. In 2013, the USDE will reauthorize the Higher Education Act, and in doing so, attempt to settle the "gatekeeper" issue that exists between schools and their access to federal aid.

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