Accreditor to Offer New Model That Looks Into Corporate Practices of For-Profit Colleges

Chronicle of Higher Education

May 24, 2011

Accreditor to Offer New Model That Looks Into Corporate Practices of For-Profit Colleges

By Eric Kelderman

Officials from the U.S. Department of Education and Democrats in Congress have been pressing accreditors to ensure that the drive to improve profits at proprietary colleges does not shortchange students or taxpayers.

Now, a national accreditor is developing a process it says will look more intensely at the corporate structure of proprietary institutions and require safeguards against the kinds of abuses that critics allege are rampant.

The Accrediting Council for Independent Colleges and Schools, which assesses more than 850 career-oriented colleges, is set to introduce an optional category of accreditation that will require the corporations that own these institutions to demonstrate that they have adequate policies to prevent misbehavior and to enforce them.

During the past year, U.S. Sen. Tom Harkin, Democrat of Iowa, has focused several Senate hearings on alleged abuses by for-profit colleges, including findings from a 2010 federal investigation that accused the colleges of widespread fraud and deception in recruiting practices. The Education Department has also designed several new regulations to increase oversight of proprietary colleges, including a controversial proposal, not yet released, that could eliminate federal financial aid for programs where high proportions of students are not repaying the principle on their student loans or end up with excessive debt loads for the salaries they can earn.

The accrediting council's new model for highly centralized for-profit colleges is not a direct response to recent Congressional scrutiny—the council has been developing the system for about two years—but council leaders believe it may ease some of lawmakers' concerns.

As the for-profit college industry has grown, control of academic quality as well as policies on recruitment and financial aid has shifted from the campus to the corporate headquarters, said Thomas H. Wickenden, deputy executive director of the council. But accreditors have largely not adapted their practices to deal with that change, he said: "We've always ignored the corporation."

Under the new model, which is now being piloted by two institutions, the council will primarily evaluate the policies and practices that are set by a for-profit college's corporate parent. That will include looking at the company's strategic and financial planning, and especially at how it plans to keep up with anticipated enrollment growth without letting the quality of the education decline.

The council, in turn, will now visit half of a company's campuses, or a minimum of three, instead of sending teams of accreditors to every college in a system—more than 100 campuses, in some instances. The corporate parent will be required to demonstrate how it monitors compliance with the company's policies as well as federal regulations, and campus visits will focus on evidence that policies are being carried out consistently.

For-profit colleges rely on financial incentives to motivate their employees, and only an accreditor that looks at the effects of those incentives can decide whether they are appropriate or not, said Anthony S. Bieda, director of external affairs for the council.

Although nearly all of the council's members are for-profit colleges, only about 35 percent would qualify for the new accreditation model, which is limited to institutions that have only one main campus and at least three branches. It's not clear how many additional colleges will agree to follow the new standards when they are finalized later this year, but early signs are that several of the council's largest members are interested, said Albert C. Gray, executive director of the council. The reason is that the new system will be more efficient than the traditional accreditation model and bring consistency to the peer-review process, he said.

At least one large institution, ITT Technical Institute, will be going through the new accreditation as part of the pilot program. ITT has more than 80,000 students at 125 campuses in 38 states and online. But Mr. Gray acknowledged that the new level of scrutiny and disclosures might deter some companies from participating.

One much smaller company that is testing the new system through the council is Harrison College, formerly Indiana Business College, which enrolls about 6,000 students online and at 13 campuses in Indiana and Ohio.

Harrison officials say the new process will help them improve both their practices and their reputation.

"Ultimately it's not so much about the stamp of accreditation as the improvements that come out of that," said Dennis A. Trinkle, Harrison's provost and chief academic officer.

Parents and students may not fully understand the accreditation process, he said, but they look for the kinds of things that accreditation can improve, such as how easily credits will transfer to other institutions, student retention and graduation rates, and figures on job placement.

Going through the new accreditation process may improve Harrison's reputation with another, potentially more important entity: the Higher Learning Commission of the North Central Association of Colleges and Schools, one of the nation's six regional accreditors, and the entity that approves most of the nation's largest for-profit colleges.

Harrison, which has applied to be accredited by the Higher Learning Commission, must relinquish its membership in the council if it is accepted by the regional accreditor. Mr. Trinkle said, however, that piloting the commission's new standards and applying to the commission are both meant to improve the college.

"They both shine a spotlight on the institution," he said.