Education Department Pushes To Terminate College Watchdog

The Department says the controversial accreditor has made "egregious and irreparable mistakes" that have harmed many students.

A controversial college watchdog is facing a dire threat to its existence after the Education Department said this morning it would push to terminate the agency, a move that is unprecedented in its size and scope and would have serious repercussions for many colleges.

ACICS has been considered by some to be "too big to fail": It has given its stamp of approval to more than 900 campuses nationwide, directing a flow of almost $5 billion in federal financial aid dollars last year. If ACICS is terminated, losing its ability to accredit schools, hundreds of colleges would face closure themselves if they cannot find a new accreditor within 18 months.

The Education Department's recommendation does not immediately spell doom for ACICS. The agency will go before an independent panel next week that will make its own recommendation, which will be considered alongside the department's. The decision ultimately rests, however, in the hands of senior department officials.

The Education Department trusts independent accrediting agencies like ACICS to oversee colleges on the government's behalf, providing a stamp of approval that allows schools to collect federal financial aid. But ACICS has racked up a history of giving that approval to troubled schools, like Corinthian Colleges, which collapsed last year. Critics say the agency has long ignored signs of serious problems, like faked job placement data and abysmally low graduation rates.

A senior department official told reporters that the Accrediting Council for Independent Colleges and Schools, or ACICS, was guilty of "egregious and irreparable mistakes" that had done serious damage to students.

If ACICS is terminated, it will likely be a steep task for some schools to find a new accreditor. ACICS approves 17 institutions that have faced state and federal investigations, including ITT Technical Institute, which is being sued by the Consumer Financial Protection Bureau and investigated by the Justice Department. Other accrediting agencies are likely to be wary of offering approval to schools like ITT, experts say.

Other ACICS-approved schools may also struggle to meet the standards of other accreditors. Reports have found that ACICS has some of the country's most lax requirements for colleges, allowing schools to scrape by with lower graduation rates and worse student outcomes.

Ahead of its renewal hearing this month, ACICS has been scrambling to make last-minute changes, putting in place a temporary freeze on new members and a slew of new rules meant to hold schools to higher standards. In a statement last week, it said the organization "recognizes the need for internal reform in order to better protect and serve students."