Accredited colleges get billions in federal aid no matter how few they graduate

Colleges of all types should be assessed based on academic quality, but the Department of Education often ignores factors like dropout rates or how much students earn after graduation when deciding which institutions deserve accreditation.

That’s because such credentials, which determine whether a school has access to federal aid programs under the Higher Education Act, are typically given and maintained based on financial factors, not academic ones, a Government Accountability Office report found.

The disparity creates a situation in which colleges can continue to rake in federal dollars if they manage the money well, no matter how their students fare in the classroom or after graduation in the job market.

The GAO report follows President Obama’s widely discussed proposal to expand access to community college through tax-funded subsidies designed to make such enrollment free for students.

“For a system that supposedly measures quality to place such a low priority on student outcomes is a bit like rating hospitals without looking at medical errors, in-hospital infections or surgical death rates,” said Dr. Stuart Butler, a senior fellow at the Brookings Institute.

Butler said Obama’s community college plan is “not a good strategy” given holes in oversight of the institutions and the lack of assurances that students attending them are gaining any useful skills.

“As for the president’s proposal on community colleges, he, too, seems to pay little regard to student outcomes — which vary widely among community colleges — in his proposal to subsidize anyone to go to any community college free of charge that will give away C+s,” he said.

“We don’t have very good measures at all of what goes on in the community colleges, but we know there is a very low rate of people getting degrees,” Butler added.

Community college students aren’t included in official graduation rate statistics, GAO said in its report.

Accrediting agencies sanctioned just 8 percent of schools and stripped 1 percent of their credentials between October 2009 and March 2014.

Officially, colleges must meet both academic and financial standards to qualify for access to federal aid programs, which handed out $136 billion in 2013 to help 14 million students pursue their degrees. The vast majority of those students attend colleges and universities that are not-for-profit institutions

But accreditors were much more likely to sanction a school or pull its accreditation based on weak financial characteristics alone. GAO said accreditors seldom exercised the same level of scrutiny over academic standards because “few quantifiable indicators exist.”

“Schools with weaker student outcomes were, on average, no more likely to have been sanctioned by accreditors than schools with stronger student outcomes,” GAO said. “Consequently, schools that do not provide a quality education may be allowed access to federal student aid funds.”

The Higher Education Act compels the Department of Education to conduct its reviews of schools on a systematic basis, which includes prioritizing for review schools that have been sanctioned by accreditors in the past.

But the Education Department did so only on a “case-by-case” basis, often ignoring information compiled by accreditors that could have helped it single out troubled institutions.

“Unclear guidance” may also have contributed to the “lapses in oversight of schools,” highlighting problems with coordinating information between accrediting agencies and the Department of Education.

“Not systematically examining available sanction data deprives the department of a chance to detect problems that may not be apparent using the current recognition process,” GAO said.

The Department of Education also didn’t use the data to see whether the accreditation bodies themselves were performing well.

Officials claimed examining all the accreditors’ information would put a strain on resources, but GAO said such an analysis “need not be time-consuming, as the one that we undertook for all of fiscal year 2012 sanctions involved just over 100 notices that were generally no longer than several paragraphs.”

Butler said there are some schools where less than a fifth of students graduate but that are still receiving federal aid thanks to their accreditation status.

“Accreditation is an almost worthless measure of quality, and is little more than a barrier to entry for competitive new institutions and a protection against competition for some terrible public institutions,” Butler said.

He suggested scaling back reliance on the accreditation system, which he said places too high an emphasis on factors like faculty and facilities over academic results, and instead focusing on certifying the quality of individual courses.



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