Following the spectacular implosion of Corinthian Colleges, the accrediting agencies are beginning to find themselves under the microscope a bit more. The Corinthian College mess has revealed some questionable decisions on the part of the accreditation agency that allowed the school to keep going.
The agency took no action to pull Corinthian’s accreditation even after the Department of Education took away the for-profit school’s access to federal student loans and grants. The Obama administration came to that decision after it become known that Corinthian falsified its numbers regarding graduation and job placement rates.
Unfortunately, the school was allowed to keep accreditation even after it was facing lawsuits for years related to fraudulent actions and lying to students. Now, after years of allowing Corinthian students to rack up billions in loans, taxpayers will be handed the bill since Corinthian’s collapse.
Accrediting agencies are still failing to take more assertive action to prevent for-profit schools from taking advantage of students. Critics that warned of Corinthian’s impending doom say that there are other colleges accredited by the same agency that show similar warning signs.
The Center for American Progress (CAP) released a study that shows one in five student debtors at schools that were accredited by the same agency as Corinthian defaulted on their loans after less than three years. That’s a rate 50 percent higher than the national average. Also, the study revealed that debtors at those particular colleges tend to borrow more than others in order to pay for their education.
Accrediting agencies are supposed to be responsible for conducting thorough investigations into the quality of these schools, but have fallen woefully short of that task. The CAP study shows that at best, the accreditation agencies are incapable of providing an objective and reliable evaluation of these colleges.
Regarding the situation, Sen. Elizabeth Warren said: “Accrediting agencies should not be allowed to certify schools’ eligibility for billions in federal dollars, and then walk away when those schools defraud their students or leave students with huge bills for useless degrees.”
Student debt continues to rise; as of now it’s up to $1.3 trillion. The students at for-profit schools like Corinthian make up about 11 percent of all student borrowers, but their debts account for almost half of all student loan defaults.