The federal college accreditation process isn’t exactly a policy area that gets many peoples’ blood boiling, but it is critically important part of the regulatory architecture that determines whether America’s higher education system is nimble and affordable or stagnant and costly. And right now, as the Manhattan Institute’s Preston Cooper writes, the system is a mess:
To gain access to taxpayer-funded student aid, all colleges (for-profit, non-profit and public) must gain accreditation from one of several bodies. However, accreditors seldom take action against schools with poor outcomes—just 0.8% of all colleges had their accreditation terminated over a five-year period. To make matters worse, the Department of Education is inept at responding to accreditor sanctions; over one-third do not elicit any reaction from the Department at all.
Any reasonable look at the data will tell you that college accreditors are not doing their jobs. Accreditors place very little emphasis on student outcomes at colleges; one analysis by the Government Accountability Office found that among for-profit colleges, schools in the top quartile of student outcomes were 30% more likely to receive an accreditor sanction than schools in the bottom quartile.
The solution, as Cooper suggests, and as we’ve written before, is to break the federal monopoly on accreditation. States, localities, corporations, and nonprofits should be allowed to set up rival accreditation bodies that can approve individual courses. A more market-oriented system would increase student flexibility, make more room for innovative new programs, and drive down costs by imposing greater competition.
This more relaxed regulatory environment should be accompanied by a requirement that colleges have skin in the game: that is, if their students are unable to pay back their loans, the institutions should lose money. This would protect borrowers, align colleges’ interests with those of their students, and ultimately represent an important step toward making higher education—and the promise of upward mobility that it brings—within reach for more middle class Americans.