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Federal Government Deals Another Blow to For-Profit Colleges

ITT Technical Institute Canton, Michigan campus (Dwight Burdette via Wikipedia)
ITT Technical Institute Canton, Michigan campus (Dwight Burdette via Wikipedia)

The Department of Education has dealt another blow to for-profit colleges by terminating recognition of the nation's largest accreditor of for-profit schools.

Last Thursday, the department agreed to a June recommendation by the National Advisory Committee on Institutional Quality and Integrity, a federal panel that provides recommendations regarding federal education accrediting agencies. Accrediting agencies monitor the academic quality, financial structure and administrative policies of postsecondary institutions such as colleges and technical schools to ensure they meet federal, state and regional requirements.

The federal panel urged the government to pull the approval of the Accrediting Council of Independent Colleges and Schools (ACICS), a national accreditor overseeing 245 colleges with nearly 600,000 students enrolled. It also oversees more than 700 GI Bill approved programs at colleges nationwide.

In 2015, schools accredited by ACICS were given more than $4.76 billion in federal student aid. Withdrawing federal approval means that eventually schools accredited by ACICS will not be eligible for any federal student aid, including the GI Bill.

However, ACICS has appealed the decision. If ACICS loses its appeal and after any legal challenges are settled, ACICS' member colleges would have 18 months to find a new accreditor or lose access to all federal financial aid.

Students enrolled in schools that do not find a new accreditor within 18 months of the final decision could lose all their progress toward a degree and still be on the hook for their student loans.

Under current law, GI Bill students would lose their benefits on the date approval is withdrawn. Veterans may lose any progress toward a degree and be unable to get back any GI Bill funds already used.

Congress recently passed legislation allowing veterans using the GI Bill at schools that lose accreditation to continue to receive the GI Bill for up to 18 months after the federal approval is withdrawn like other students using federal financial aid. The legislation is expected to be signed by President Obama.

Several thousand veterans were left out in the cold following the closing of ITT Tech last month. The VA has not said if the pending legislation would help those students retroactively.

ACICS came under fire in 2015 after the collapse of the for-profit Corinthian College chain. Twelve state attorneys general requested that the Department of Education withdraw ACICS approval at that time.

ACICS was also the accreditor for ITT Technical Institute.

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