Trust Busting Higher Ed

Feigning outrage that college is too expensive is a bipartisan pastime, so it’s refreshing to see a presidential candidate taking the cost-drivers seriously. Senator Marco Rubio is highlighting an obscure network of higher-ed busybodies known as accreditation agencies, and more politicians should study up on how to reform this racket.

“Our higher education system is controlled by what amounts to a cartel of existing colleges and universities, which use their power over the accreditation process to block innovative, low-cost competitors from entering the market,” Sen. Rubio said in a speech this summer. Last week he introduced a bill with Sen. Michael Bennet (D., Colo.) that would test a voluntary certification process for vocational and nontraditional education.

Six regional accrediting groups deputized by the Education Department determine whether a college is eligible to receive federal aid dollars, and a coterie of outfits bless specific programs like, say, engineering. The regional agencies appeared in the 19th century to distinguish rigorous institutions from diploma mills, but since the 1960s have morphed into wardens of billions in handouts and subsidized student loans.

These quality-assurance teams evaluate colleges periodically by asking questions such as: How many books does the library house? There’s no useful benchmark on what students learn, and by the way, a majority of four-year college graduates don’t learn enough to compare viewpoints in newspaper editorials, according to Education Department research.

Nothing but the accreditor’s up or down verdict is available to the public, but we know it’s harder to flunk than a sex-education course. In 1987 Southeastern University posted a 42% student-loan default rate, but the Middle States Association of Colleges and Schools didn’t revoke its accreditation until 2009. The six agencies that approve more than 1,500 four-year colleges have in the past 15 years revoked accreditation for, wait for it, 18.

Then there’s grade inflation. Faculty and administrators from neighboring institutions perform the visits. They know the staff at the school they’re evaluating might soon check up on them, and so there’s a disincentive for intensive review. Add to this self-dealing that colleges pay dues to their accrediting organization—again, the one that decides if an institution qualifies for federal subsidies.

What do students get? Higher tuition, as colleges plow time and money into the process and pass on the costs. Stanford University said it spent $850,000 in 12 months of a multiyear process, and Duke University reported blowing $1.5 million over two years. Accreditors recommend changes—trimming faculty course loads, hiring more Ph.D.s—that drive up expenses without improving educational outcomes.

Most pernicious is that the cartel stifles innovation. Students can’t use federal aid at colleges that aren’t accredited, yet a school usually must serve students for years before winning approval. Accreditation amounts to monopoly enforcement, which is why in 2013 the Higher Learning Commission of the North Central Association of Colleges and Schools swatted down an online program at Tiffin University.

Entrepreneurs have put the value of regional accreditation at $10 million, and those that finagle the seal are forced to operate like traditional colleges. The Western Association of Schools and Colleges, for instance, requires a detailed report months in advance for any proposed “substantive change.” Not exactly a start-up mentality.

Sen. Rubio’s legislation would allow the Education Department to add accreditors for innovations like boot camps where students learn to write code. The outfits (probably industry groups) could only bless programs at or above the 60th percentile in a basket of metrics— such as graduation rates, loan repayment stats, employment figures.

The bill also lays out avenues for nascent offerings, and puts authorizers on the hook for 25% of federal student-loans in default. Students would use Pell grant money for tuition, which means the proposal is geared toward low-income students.

Though an excellent start, the measure wouldn’t dismantle the gang of six lording over traditional colleges, where most students are educated, and the broader priority should be untangling aid and accreditation. Colleges submit detailed financials to the feds and could post independently audited statements online, as the American Council for Trustees and Alumni suggested in 2013, as well as program-specific, annually updated data about completion, default and more. This isn’t extra federal meddling; it’s streamlining what already exists.

Simple, clear standards would make it easier to revoke funding from schools junking their numbers, and accreditation agencies could return to their origins as voluntary self-improvement groups. That would foster competition, let consumers decide what’s valuable—and cross off one reason why we’re all worried that education costs too much.