Tag: Title IV Financial Aid

The process of accreditation is complex for institutions of higher education–and has been changing significantly over the past few years. To get a handle on the process as it is now, you should understand:

• The effects for-profit institutions are having on accreditation
• How the reputational balance between regional and national accreditors is changing
• The implications of the recent ACICS collapse, and what it says about the difficulties of reputation management
• How Title IV funds will be affected by growing student debt
• The importance of tracking and managing student funds resulting from accreditation through a Student Information System (SIS)

The right accreditation can help you validate the value that you offer your students, particularly if you are a less-known institution without an established brand.

Who performs accreditation?

An accreditor is essentially a membership organization made up of the institutions it accredits, and standards are developed by collaboration between the accreditor and the member institutions. It’s more like being a member of a club that cares strongly about its reputation than it is like being supervised by some external agency.

Accrediting organizations must complete a review process overseen by the Department of Education (USDE) and the National Advisory Committee on Institutional Quality and Integrity (NACIQI). The Council for Higher Education Accreditation (CHEA) also reviews accreditors, and its opinion is significant, but the USDE’s approval is key.

Accrediting organizations are either institutional, examining and certifying entire institutions, or programmatic/specialized, certifying particular professional programs.

Institutional accreditation

There are two main types of institutional accrediting organizations

• Regional, accrediting largely academic, non-profit institutions
• National, accrediting largely for-profit institutions, with career-oriented programs, though there are also faith-related accreditors for religious institutions.

National accreditors will accredit non-degree institutions, while regionals will not.

There are six regional accreditors, each with a long history. There also six national accreditors, one of which, ACICS has recently run into instructive trouble.

Because of the difference in emphasis, as well as concerns about less-strict standards for national accreditation, students often find trouble transferring credits from a nationally accredited school to a regionally accredited school.

Increasingly, however, more for-profits are gaining regional accreditation. And as they become members of these organizations, their influence over accreditation expectations and process will grow.

Programmatic/specialized accreditors

These certify particular professional programs. There are nearly 50 of these, with multiple accreditors for some programs. Business education, for example, has three possible accrediting organizations.

Programmatic accreditation is essential for programs such as engineering, nursing, or architecture that require professional licensing in order to practice. Some smaller programs in disciplines such as communications may choose not to seek it.

The accreditation process

To get accredited, an institution must perform an extensive self-evaluation, following the procedures of the accrediting organization. There will then be on-site surveys from the accreditor. Once accreditation is achieved, regular updates will be required, though of less intensity than the original application. All of these functions are supported by a Student Information System (SIS).

Accreditor reputation and the fate of ACICS

In September, the USDE stripped the Accrediting Council for Independent Colleges and Schools (ACICS) of its authority to accredit schools. ACICS was the largest of the national accreditorsand was the accreditor for Corinthian Colleges and ITT Technical Institute, both troubled and now-closed for-profit institutions.

Nearly 250 institutions enrolling over half a million students now face the challenge of finding new accreditation, imperiling access to billions of federal educational dollars.

ACICS appealed this decision on October 21, 2016. No matter what the outcome, this is a sobering event for schools that depend on accreditation to maintain their viability, both in terms of reputation and in access to federal educational funds.

Schools can’t just take for granted that their accreditor is giving the best value. During the financial crisis of 2007/2008, credit rating agencies Standard & Poor’s, Fitch, and Moody’s revealed that they had not been objectively measuring the value of what they were recommending. Investors relying on their ratings suffered financial consequences.

Specific criteria for choosing an accreditor will be covered in a later post in this series.

The benefits of accreditation

In a world of many educational institutions competing for students and their associated federal educational funds, accreditation provides useful institutional discipline, participation in a community of like-minded institutions, and ability to contribute to shaping the future standards for educational excellence.

Accreditation also allows newer and smaller educational institutions who do not have the advantage of strong brand visibility, or who are striving to extend their reach, to gain visibility and validation.

And accreditation ensures the steady and predictable flow of federal education dollars, without which most higher education institutions would be unable to function.

The issue of financial aid money

Accreditation not only certifies the quality and reputation of an educational institution’it also controls the distribution of federal financial aid funds as part of Title IV.

It is impossible to recognize the impact of accreditation without understanding how much nearly every institution depends on these funds, including Pell Grants and other academic grants, Federal Family Education and other loan programs, and Federal Work-Study money. Without this funding, many institutions would need to close their doors.

The average full-time undergraduate student in the U.S. received over $2,000 in Pell Grants alone in 2013. The average student now leaves college nearly $23,000 in student-loan debt.

The impact of accreditation is significant both for each institutionand for each student. Institutions need to pay attention to the funding that comes with their students, both for their own bottom line, and to protect the interests of their students. Both of you have a lot of skin in this game.

How accreditation became as important as it is

Why do accreditors also control the flow of federal funds to post-secondary educational institutions? It’s not necessarily an automatic connection.

Before the 1950s, there were a variety of regional, voluntary membership associations that developed standards for anyone claiming to provide higher education. They cared about their reputationsand the reputations of their fellow institutions. The money involved was private money, or from occasional charitable endowments, and did not need to pay attention to accreditation if they did not choose to.

Then the WWII and Korean War GI Bills brought federal dollars to schools, followed, over the next few decades, by the various Title IV funds previously discussed. There was an increasing amount of money involved, which changed the stakes of accreditation.

Instead of creating some kind of Federal Accreditation Agency, the federal government decided instead to use the existing accreditation system to determine eligibility for these federal educational dollars. The government understood that the flexibility of the private system made it worth keeping. That is still the system in place, though government oversight has grown over time, as the amount of money at stake has increased.

Help when facing the accreditation process

A robust Student Information System (SIS) should support your accreditation efforts. Much of the information you supply to the accreditor will come straight out of your SIS. The reporting requirements are significant. Trying to do it without a good SIS can adversely affect your chances of getting accepted by a reputable accreditor. It’s well worth getting an SIS in place before starting an accreditation process.

If you fail to accurately track the Title IV funds that come along with accreditation, you can find you can find yourself subject to costly fines and lawsuits. An SIS helps ensure that the funds are applied to the appropriate tuition, mandatory fees, and housing charges.

Some of the functions you should look at when considering an SIS:

• Data collection : does the SIS work with your existing business processes to collect and maintain data?
• Reporting: can the SIS generate the reports required by accreditors and government agencies?
• Operation management: will the SIS support you in monitoring student achievement, attendance, and satisfaction?

A good SIS not only supports your business operations, but helps keep your students informed, happy, and high performing. It also makes it possible to keep students up to date on the status of their grants, loans, and other sources of support, as well as recommending possible funding sources.

One step at a time

Accreditation is a long and significant process. We’ll be covering the essential steps here over the next few months, so be sure to check back regularly.

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