U.S. Reviewing Finances of Reinstated For-Profit Accreditor

The Trump administration is seeking to review the finances of a troubled accreditor that Education Secretary Betsy DeVos reinstated last year, an Education Department official said Tuesday.

The Accrediting Council for Independent Colleges and Schools, an accreditor of for-profit colleges, disclosed in June that it’s facing losses of $2.1 million this year and likely won’t be out of the red until 2023. The accreditor has lost scores of member institutions -- many of them thanks to abrupt closures -- since the Obama administration sought to pull its federal recognition in 2016.

Herman Bounds, director of the Education Department’s accreditation group, said Tuesday at a meeting of the National Advisory Committee on Institutional Quality and Integrity that the department had sent a letter to ACICS asking the organization to explain its finances. Simon Boehme, a member of the NACIQI board, had asked for a review of the accreditor’s financial status but withdrew a motion after the update from Bounds.

Federal regulations give the Education Department authority to review whether an accreditor meets federal standards at any time based on new information. Michelle Edwards, president and CEO of ACICS, discussed the accreditor’s financial challenges at a meeting of the Council for Higher Education Accreditation’s recognition committee in June.

Edwards said in an email Tuesday that ACICS “has submitted information to the department showing that, while there are financial losses, our operating expenditures are covered and we have sufficient funding to fully meet our obligations as an accreditor.”

The Obama administration had targeted ACICS for closure after the shutdown of Corinthian Colleges in 2015 and ITT Tech in 2016. Both for-profit chains had remained accredited by ACICS until their eventual closure. Months after DeVos reinstated federal recognition for ACICS, another for-profit chain it accredited, Education Corporation of America, abruptly closed its doors as well.

Although career Education Department staff raised concerns about the long-term financial health of ACICS in an internal report, Principal Deputy Under Secretary Diane Auer Jones found in a recommendation to reinstate the accreditor last year that it appeared to have "adequate financial resources" considering it now had fewer institutions to oversee. 

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