A shake-up in leadership is underway at the largest national accreditation agency, the gatekeeper between colleges and billions of dollars in federal financial aid, which is facing scrutiny from federal and state authorities for its evaluation of for-profit institutions.
“This council takes the concerns raised by a variety of external stakeholders very seriously,” Lawrence Leak, chair of the ACICS board of directors, said in a statement. “The assurance of quality and integrity of private post-secondary education by ACICS will become stronger and more effective in light of these concerns.”
Leak praised Gray for his “loyal service and dedicated leadership” during difficult times. Other members of the higher-education community had less glowing things to say.
“Gray’s departure is a sign of desperation, an acknowledgement that the agency cannot stand behind its accreditation decisions,” said Robert Shireman, a senior fellow at the Century Foundation and a former official at the Education Department.
It has been a trying time for the council. The organization, which accredits more than 900 colleges, gained notoriety for claiming Corinthian Colleges, a for-profit chain that state and federal authorities accused of lying to students and committing fraud, was in good enough standing to continue to receive billions of dollars in taxpayer funds. ACICS renewed two of the company’s campuses and authorized a new campus a few months before the Education Department forced Corinthian to close or sell its 120 locations.
Even after Corinthian’s stunning collapse, Gray defended the council’s actions and insisted that it found no evidence that Corinthian lied to its students or committed fraud. His defiance did not go over well on Capitol Hill. Sen. Elizabeth Warren (D-Mass.) confronted Gray at a hearing in June, rattling off a list of federal and state authorities investigating Corinthian as his agency continued to give its approval.
“You were aware of these investigations and lawsuits had been filed? You were tracking it, and yet you continued to accredit?” Warren asked Gray.
He replied, “We have our own methods of investigation . . . All of these investigations that you mentioned are just that: investigations.”
In an interview with The Washington Post in September, Gray said the council withdrew the accreditation of four Corinthian campuses that abruptly closed last April without providing refunds, which the council requires. He stressed that many of the former Corinthian schools under his care were sold to ECMC Group in a $24 million deal blessed by the Obama administration.
The council’s handling of Corinthian has drawn the attention of the Consumer Financial Protection Bureau, which sent ACICS an order to testify about its “policies, practices and procedures for accrediting certain for-profit colleges” in August. The order, known as a civil investigative demand, also asks for a list of colleges that the council accredits and the individuals who conduct the reviews.
ACICS petitioned the bureau to either drop or modify the investigation, claiming that the Education Department is its sole regulator. The CFPB denied the request on the grounds that it’s not taking on the role of council regulator; rather, it said, it is trying to determine whether anyone violated consumer-protection laws. The review is ongoing.
In the meantime, a dozen state attorneys general are calling on the department to strip ACICS of the power to grant access to federal funds, accusing the accreditor of poorly evaluating for-profit colleges, such as Corinthian, ITT Tech, Sanford Brown and the Art Institutes. The department is preparing a routine review of the council in June and can decide not to recognize the agency, which would prevent ACICS from doing its job.
“The resignation of Albert Gray is a long-overdue admission by ACICS that it has failed to properly safeguard taxpayer dollars by protecting students from poor-performing institutions of higher education,” said Ben Miller, senior director for post-secondary education at the left-leaning Center for American Progress. “The problems at ACICS, however, cannot be fixed by just one resignation.”
He said there is a “dereliction of duty” by the entire board of directors to set and enforce rigorous standards, as evidenced by the mounting lawsuits and investigations at institutions approved by the council, such as ITT Educational Services.
Miller wrote a report in the fall that found that 1 in 5 borrowers at colleges accredited by the council defaulted on a student loan within three years of entering repayment. That is 50 percent higher than the national average and is especially troubling because students at those schools borrow heavily to pay for college. Other national accreditors, which are mostly responsible for for-profit schools, had similar outcomes, according to the study.
The findings are emblematic of larger problems in college accreditation. There is no uniformity in the way accreditors decide who enters and exits federal student aid programs. And that has led to a system that is at best subjective in the way it assesses quality. While there is consensus among policymakers that the college accreditation process is in need of reform, there is little agreement on how to move forward.
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