For one federal department investigating fraud in higher education, the task became more difficult.
The Consumer Financial Protection Bureau cannot investigate the accreditors of for-profit colleges, a federal judge ruled, according to Inside Higher Ed.
In recent months, given the failure of the Department of Education to monitor colleges for fraud, the CFPB has fined for-profit colleges for deceptive practices. The Department of Education audits colleges for financial violations, but not fraud.
The federal ruling limited the government’s power, but students now lack a watchdog that has investigated college malfeasance.
The CFPB attempted to obtain information from the Accrediting Council for Independent Colleges and Schools to determine its practices for approving for-profit colleges, Inside Higher Ed noted.
That was outside its power. The CFPB has latitude to investigate potential violations of consumer financial laws, but not a mandate for anything tangentially related to that purpose.
“Although it is understandable that new agencies like the CFPB will struggle to establish the exact parameters of their authority, they must be especially prudent before choosing to plow head long into fields not clearly ceded to them by Congress,” U.S. District Judge Richard Leon wrote in his decision.
College accreditors aren’t a well-known part of higher education. The Department of Education does not accredit any colleges or college programs. Instead, the department essentially accredits the accreditors. They review the agencies and determine whether they are “reliable authorities as to the quality of education or training provided by the institutions of higher education … they accredit.”
If a college doesn’t get accredited, they aren’t eligible to receive federal funding, including student loans. The process, however, has been criticized as ineffective.
“Even though it is a de facto requirement for colleges, accreditation does not guarantee academic quality. Indeed, it is granted largely on the basis of the inputs a college reports to the accrediting agency,” Lindsey Burke, a fellow at the Heritage Foundation, noted.
The ruling limits the power of the executive branch, but unless the Department of Education gets more serious in evaluating college outcomes, students might be left alone to judge program quality and value.
