Education Secretary John B. King Jr. (Susan Walsh/AP)

Education Secretary John B. King Jr. on Monday rejected an appeal from the Accrediting Council for Independent Colleges and Schools, one of the largest national accreditation agencies, to remain the gatekeeper between colleges and billions of dollars in federal financial aid.

King is siding with his staff and an independent advisory board that deemed the council incapable of rectifying years of lax oversight of troubled for-profit colleges. Advocacy groups, lawmakers and state attorneys general have accused the accrediting agency of letting schools accused of fraud or with abysmal graduation rates receive millions of dollars in federal loans and grants, despite the risks to students and taxpayers.

The council has responded to the criticism by increasing the frequency of its on-site evaluations, removing board members with conflicts of interest, bringing in new leadership and stepping up enforcement actions. Its threat to revoke the accreditation of ITT Technical Institute set in motion a chain of events that ultimately led the for-profit schools to shut down. Still, the council’s efforts have not quelled objections to its participation in the federal student aid program.

“We are deeply disappointed in this decision as we believe it will result in immediate and meaningful harm to hundreds of thousands of students currently enrolled at ACICS-accredited institutions,” Roger Williams, ACICS interim president, said in a statement. “We believe the department’s decision-making process was flawed and potentially unlawful as it did not take this significant progress into account.”

Williams said the accreditation agency plans to file a lawsuit seeking an injunction. That will leave the schools the council accredits in a holding pattern until a final court ruling.

At stake is the future of nearly 300 colleges with 600,000 students. They will ultimately have 18 months to find a new accreditor to prevent students from losing access to government loans and grants. Other accreditation agencies might reject colleges accredited by the council, such as the Art Institutes, which would be the death knell for some. Even if council schools are able to find an accreditor willing to work with them, getting approval could be a long and arduous process.

For the time being, the department will allow schools accredited by the council to continue participation in the federal student aid program through what’s known as provisional certification. That certification may last up to 18 months from the date of the Secretary’s decision and requires schools to comply with additional oversight.

“The federal government needs to trust that accreditors will act as strong arbiters of quality,” said Ben Miller, senior director for postsecondary education at CAP. “Time and again ACICS failed to do its job, with students and taxpayers suffering as a result. If ACICS is truly committed to its students and schools it should remove any lingering uncertainty and accede to the Department’s decision rather than continuing to use up taxpayer resources in court.”

Distrust of the council emerged after it claimed Corinthian Colleges, a for-profit chain that state and federal authorities said committed fraud, was in good enough standing to get billions of dollars in taxpayer funds. ACICS renewed accreditation for 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. The accrediting agency contended that many of the former Corinthian schools under its auspices were sold to ECMC Group in a $24 million deal blessed by the Obama administration.

Education agency officials, however, became exceedingly critical of the accrediting process in the wake of Corinthian’s collapse. The government has depended on private-sector accreditors to be the stewards of federal financial aid, the lifeblood of colleges and universities, since the early 1950s. Each accreditor sets its own standards, which are reviewed by an advisory board at the Education Department, yet the department has no say in how the agencies do their job. Nevertheless, education officials can strip the gatekeepers of their power.

In the case of the council, its fate has been up in the air since the department first advised that the group be kicked out of the federal student aid program at the start of the summer. At the time, education officials said the council failed to meet 20 criteria used in making the recommendation, including an ability to monitor high-risk schools, ensure the accuracy of graduation rates and enforce actions against troubled schools. That recommendation weighed heavily in the 10-to-3 vote in the National Advisory Committee on Institutional Quality and Integrity in June to deny the accrediting agency the recognition it needs to operate. A senior official at the Education Department stood behind the decision, which ACICS appealed.

“ACICS has not provided any argument or evidence that would compel me to reach a conclusion contrary to that arrived by the” senior department official, King said in a letter to the council. “I find that ACICS is currently out of compliance with the full recognition criteria and not capable of coming into full compliance within 12 months or less.”

It is entirely possible that the incoming Trump administration could reexamine the ACICS case, said Terry W. Hartle, senior vice president of the American Council on Education. If the council is successful in getting a court injunction, the new administration could also chose not to defend the case.

“What we have here is an enormous amount of ambiguity for a very large number of people, certainly for ACICS and all the schools it accredits, and for the students who are enrolled in those institutions,” Hartle said.

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