Accreditation, the Gatekeeper Nobody Elected That Decides Who Gets Federal Money

Name your senator. Fine, that was easy. Name your representative. Most people can. Now name the organization that decides whether the college down the road can enroll a single student with a federal loan or a Pell Grant. If you came up empty, welcome to the club, which has about three hundred million members and one very quiet rival: the club of people who actually run the thing.

It's a strange fact about American higher education that one of the most powerful gatekeepers in the country is a private membership organization, run by volunteer peers, that no voter elected and few have heard of. Its decisions can open or close the federal money spigot for a college with thousands of students. And the whole arrangement started as a polite club for professors who wanted to compare notes. Let me walk you through how that happened, how it works today, what the critics say, and what a reform-minded conservative might actually do about it.

What a college needs to enroll students on federal aid

Start with the rule. Under the Higher Education Act, a college cannot take part in the federal student aid programs, which means Pell Grants and federal student loans in Title IV of the Act, unless it meets three conditions. This is often called the triad.

1. State authorization. The state where the school operates has to approve it.
2. Accreditation. The school has to be accredited by an agency that the U.S. Department of Education recognizes.
3. Federal certification. The Department itself has to certify that the school meets financial and administrative standards.

Most of the public discussion is about the third, because it comes with a federal seal. The second is the one nobody sees. And the second is what lets a private body decide whether a school is eligible for federal dollars. A college that loses its accreditation, or can never get it, effectively loses access to federal student aid. For most schools, that is the end of the business, since few families can afford a private college with no loans and no grants.

How a club became a gate

The story begins well before the federal government got involved. In the 1880s and 1890s, colleges and secondary schools in various regions formed associations to agree on what a high school diploma meant and what a college ought to look like. The New England association was formed in 1885, and others followed in the Middle States, the North Central region and the South. These groups were voluntary. They had no legal power. A college joined because membership was a mark of seriousness, the way a restaurant joins a trade group.

In the early twentieth century, professions got into the act. The American Medical Association created a council on medical education in 1904, and the 1910 Flexner Report, sponsored by the Carnegie Foundation, pushed medical schools toward the standards we know. Law, engineering and other fields built their own bodies to review programs. This is the origin of what we call programmatic accreditation, which reviews a particular program such as a law school, rather than the college as a whole.

Notice the key feature of the early system. It was private, voluntary and about quality control among peers. Nobody in Washington was involved, and that was by design.

Enter the GI Bill. The Servicemen's Readjustment Act of 1944, the GI Bill, sent millions of veterans to school on the government's dime. That created a problem for the first time. When the government pays tuition, a bad school can make a fortune. The 1944 law left it to the states to approve schools for veterans, and the result was a flood of fly-by-night operations chasing the money. Congress needed a way to tell the good from the bad without building a national school inspectorate.

It found one in the existing private system. In the Veterans' Readjustment Assistance Act of 1952, the law for Korean War veterans, Congress directed the Commissioner of Education to publish a list of nationally recognized accrediting agencies, and the government began relying on those agencies' approval to decide which schools could receive veterans' benefits. That is the moment the private club became a federal gatekeeper. The government did not create the accreditors. It decided to use them.

The Higher Education Act of 1965 locked it in. When Congress created the student aid programs in 1965, it followed the same model: an institution had to be accredited by a recognized agency to take part. As the programs grew into the largest source of college funding in the country, the stakes of accreditation grew with them. The Act's 1992 amendments formalized the triad and created the National Advisory Committee on Institutional Quality and Integrity, the advisory panel known by its acronym, NACIQI, which reviews the accreditors and makes recommendations to the Secretary of Education.

So today the federal government says, in effect: we will not decide whether your school is good, but we will decide whether your accreditor is good enough to decide, and we will fund only the schools the accreditor approves.

How the Department recognizes accreditors

An accrediting agency that wants its schools to be eligible for federal aid has to apply to the Education Department for recognition. The Department, with advice from NACIQI, reviews the agency against criteria set out in federal regulations. These cover things like whether the agency has the staff and resources to do the work, whether its standards address student achievement and curriculum, whether it has fair procedures for appeals, and whether it is independent of the schools it reviews. Recognition is reviewed periodically, not granted forever.

The names of the big institutional accreditors are not household names: the Middle States Commission on Higher Education, the New England Commission of Higher Education, the Higher Learning Commission, the Southern Association of Colleges and Schools Commission on Colleges, the Northwest Commission on Colleges and Universities and the WASC Senior College and University Commission. For most of the last century they were regional, each covering a part of the country. A rule the Department finalized in 2019 ended the formal distinction between regional and national accreditors. There are also programmatic accreditors for fields like law, medicine and engineering, and in some professions graduating from an accredited program is a condition of sitting for the licensing exam.

The power to recognize is also the power to derecognize. In late 2016 the Department withdrew its recognition of the Accrediting Council for Independent Colleges and Schools, an agency that had accredited many career colleges, following the collapse of several large for-profit chains. Whatever you think of that decision, notice what it demonstrated: a decision by a federal official could cut off the federal-aid eligibility of every school that relied on that one agency. That's power.

The case for the system

I promised a fair hearing for the other side, so here is the best argument for the current arrangement.

1. Peers know the subject. A chemistry department can only be judged properly by chemists. A review by federal clerks would be shallow, and a review by politicians would be worse.
2. It keeps Washington out of the classroom. Federal law bars the Department from directing the curriculum or the program of instruction at a school. A private accreditor is one of the ways Congress gets a quality check without a federal curriculum. Conservatives who worry about a federal school board should think twice before trading peer review for a ministry of education.
3. It protects taxpayers and students. Without a gate, any storefront with a catalog could claim federal loans. The collapse of the Corinthian Colleges chain in 2015 and the ITT Technical Institutes closure in 2016 showed that even with gates, fraud finds a way. It is hard to argue that fewer gates would mean less of it.

Those are serious points. A reformer has to answer them.

The conservative critique

Now the other side of the ledger. Here are the objections that conservatives and a good many others have made.

1. The reviewers are the reviewed. Accreditation is peer review, and the peers are college administrators and professors from other member schools, who serve on visiting teams and commissions, while the schools pay the accreditor's dues and fees. Imagine a restaurant inspector who is also a restaurant owner, paid by restaurants, who will be inspected by the people he is inspecting next year. Nobody has to be corrupt for that arrangement to produce gentle reviews. A little mutual courtesy does the job.
2. Quality is hard to find in the standards. Critics say accreditors spend more time on process, such as faculty governance, mission statements and assessment plans, than on results, such as whether students graduate, find work or learn what they were promised. A college can pass with weak outcomes and still be in danger for a paperwork lapse.
3. Mission creep. Some accreditors have adopted standards on diversity, equity and inclusion, or on other matters that have nothing to do with whether students learn. A public university that disagrees with a standard faces a choice between complying and risking its aid.
4. The barrier to entry. Because federal aid depends on accreditation, a new accreditor with a new idea cannot easily break in. Federal rules call for a track record before recognition, and a school is reluctant to leave an established accreditor for an unproven one. The same lock that protects quality also protects incumbents.
5. Nobody is accountable. If a Secretary of Education makes a bad decision, voters can take it out on the president. If an accreditor makes a bad decision, there is nobody to vote out. This is the heart of the title of this post.

What reformers propose

Conservatives have offered several fixes, with trade-offs for each.

• More room for new accreditors. Ease the path to federal recognition for new agencies, including the rules that require an established record, so that schools have real alternatives. The trade-off is that a rushed recognition process could recognize a weak accreditor, and a rival who promises to be easy on schools is not a quality improvement.
• Outcomes over process. Require accreditors to give more weight to graduation, repayment and earnings data. The trade-off is that raw outcomes can punish schools that serve harder-to-educate students, so the data must be adjusted fairly.
• Let states compete. Florida has gone furthest, passing a law in 2022 that requires its public universities to rotate accreditors. States could also take on more of the gatekeeping through their own authorization. The trade-off is a patchwork, and some states are more careful than others.
• Separate the dollars from the diploma. Create other ways for a school to show it deserves federal aid, such as a bonded guarantee or strong repayment results, so accreditation is one path and not the only path. The trade-off is that it hands more discretion to federal officials, which is what the original system was built to avoid.
• Transparency. Require accreditors to publish their reviews, their findings and their finances, so families and legislators can see what the gatekeepers see.

I think the first and last of these are the easiest to defend. Competition among accreditors would put some pressure on the cartel's habits. Sunlight costs nothing.

Why this matters to your family

The reason a parent should care is not abstract. Accreditation affects what your student can transfer, what jobs she can enter, and whether the school she chose will be open in four years. It is also part of the reason the price of college behaves the way it does. A closed gate limits competition, and limited competition is how you get prices that run away from inflation. The argument about how federal aid and prices interact is in Does Federal Aid Raise Tuition? The Bennett Hypothesis Tested, and the mechanics of the loan itself are in How a Federal Student Loan Works and Why the Balance Keeps Growing.

There's a family resemblance to the occupational licensing fights in the license you need to braid hair and the jobs it quietly kills: a gate sold as consumer protection that happens to protect insiders. Some gates deserve to stand. The question is who holds the key. And the history of how Washington came to hold keys it never meant to hold is in The Department of Education, From an 1867 Office to a Cabinet Fight and What the Education Department Actually Does, and What It Cannot. For a school that decided it would rather give up the federal money than the independence, read The College That Turned Down Washington's Money and What It Teaches Us.

The verdict

The accreditation system began as a sensible answer to a real problem and it has aged into something that no one designed. The federal government wanted a quality check without a national school board, and it borrowed one from the colleges themselves. A reasonable idea in 1952 has turned, over seventy years, into a gate with no voter at the door, in which the people being judged help choose the judges.

That does not mean tearing it down. It means opening it up: more accreditors, more data, more sunlight, and a clear rule that the gatekeepers answer to the families whose tax dollars and tuition dollars fund the whole enterprise. If a body has the power to decide who gets federal money, then it should be a body that can be examined, challenged and, when it fails, replaced.

The bottom line

• A college needs state authorization, federal certification and accreditation by a Department-recognized agency to enroll students on federal aid. The accreditor is the least visible part.
• The system grew from private peer review in the 1880s through the GI Bill's 1952 version and the Higher Education Act of 1965 into a federal gate.
• The best defense is that peers know the subject and that it keeps Washington out of the curriculum. The best critique is that the reviewed help choose the reviewers and nobody is accountable.
• Reforms worth supporting include easier entry for new accreditors, published findings, and more weight on student outcomes.
• Before you enroll, look up the school's accreditor on the Education Department's database, and ask what happens to your credits if the school loses its status.