Higher Ed Watch

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Responding to the Career College Association

Published:  January 7, 2010

Shortly before Christmas, the U.S. Department of Education’s Inspector General called on the Department to consider terminating the authority of the nation’s largest regional accreditation agency because it had accredited a major for-profit university despite knowing that the institution had potentially skirted the law and harmed students.

At issue in this case is the fact that the Higher Learning Commission of the North Central Association of College and Schools gave full accreditation to the Career Education Corporation’s American Intercontinental University (AIU) even though it had found serious problems with the way in which the school was awarding credits for classes taken by its large population of online students. The nature of those problems is still not exactly clear because the IG’s alert memo was heavily redacted. But even the commission’s president, Sylvia Manning, has acknowledged that they were “egregious.”

Over the last several weeks, supporters of the for-profit higher education sector have been working overtime to try and downplay the significance of the issues raised by the I.G. In a blistering response to a blog post we ran last month, Harris Miller, the president of the Career College Association, wrote that the case revolves around “a single accreditation issue affecting one college at one time that is based on a debate, as important as it is, between bean counters and academics.” While there have long been disputes “among academic specialists” about “what constitutes a credit hour” in nontraditional higher education programs, he said, “reasonable people should be allowed to disagree without government investigators jumping into the mix.”

At Higher Ed Watch, we wish we could agree with Miller’s characterization of the case as simply being a dispute “between bean counters and academics.” In reality, the issues that the IG raises in its alert memo and in recent reviews it has conducted of other accreditation agencies’ policies (see here and here) bring up much more fundamental concerns -- about the quality of education being provided by some of the country’s largest chains of proprietary schools and the ability of accreditation agencies to assess these programs and hold them accountable.

For the hundreds of thousands of low-income and working-class students who enroll in these schools, these are not just “academic” questions. These students are taking on enormous amounts of debt to attend these relatively high-priced institutions. They have every right to expect that these schools will provide them with the skills they need to pursue careers in the fields for which they sought training.

In this respect, AIU, and many other schools like it, appear to be failing. At the university’s main campus in Illinois only 16 percent of students who entered the school in 2002 graduated within six years, according to data collected by the U.S. Department of Education. In other words, a whopping 84 percent of students either dropped out or transferred out of the school during that period of time. Meanwhile, less than half of the students who started the program in the fall of 2007 returned to the institution the following year. One would hope that those who remain do receive a quality education. But the IG’s findings suggest otherwise -– that Career Education Corporation’s flagship universities are not meeting minimum federal requirements that aim to ensure that colleges' academic offerings are '“of appropriate content, breadth, length, and rigor" to benefit students.

To be perfectly clear, we are not suggesting that for-profit higher education is bad per se or that there aren’t good players in it. Nor do we mean to suggest that we are not concerned about quality, costs, and the student aid practices of traditional colleges. After all, we were among the first to expose the “pay for play” student loan scandals that involved some of the country’s most prestigious public and private colleges.

But frankly we have always been particularly concerned about the quality of education provided by the giant publicly traded for-profit higher education corporations that, for obvious reasons, are answerable first and foremost to their shareholders and Wall Street. Certainly some of these companies are better than others. And some of the most scandal-ridden ones, such as Career Education Corporation, have taken steps that suggest that they are trying to clean up their act.

But make no mistake, the federal government absolutely has the right and responsibility to investigate whether these schools are providing a legitimate education – not only to safeguard students, but taxpayers as well. Don’t forget that these schools are almost entirely subsidized by the federal government, in the form of federal grants and loans (not to mention generous GI payments). According to Career Education Corporation's latest SEC filings, federal financial aid accounts for about 80 percent of the company's revenue.

The government depends on independent accreditation agencies to distinguish the good schools from the bad and to protect the federal investment. But are they up for the task? This is an issue that we will look more closely at over the coming year. Stay tuned.

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