Who accredits the for-profit colleges that scam students?

In case you missed it, I have a story on our main site today that takes a look at how the now-defunct for-profit Corinthian Colleges sold many students up a creek, including some North Carolina veterans who are saddled with big debts and worthless degrees and coursework.

In response to the story, one reader questioned on our Facebook page: Who accredited this scam?

That’s a great question.

So—when it comes to accrediting for-profit career colleges like Corinthian, here’s what I have learned.

Accrediting agencies that approve for-profit colleges also receive money from the very schools they are supposed to be holding accountable.

You read that correctly. The two national accrediting agencies that approved Corinthian schools—the Accrediting Commission for Career Schools and Colleges (ACCSC) and the Accrediting Council for Independent Colleges and Schools (ACICS)—each receive their funding in the form of fees from the schools they accredit.

At a congressional hearing in 2013, Kevin Carey of the New America Foundation compared this arrangement to some of the practices that have taken place on Wall Street.

“This is like bond ratings firms giving AAA ratings to mortgage-backed securities sold by the same firms that pay their fees,” Kevin Carey, the director of education policy at the New America Foundation, said at the hearing. “It does not work out well in the long run.”

Accrediting agencies’ boards comprise executives from the schools that they monitor and approve.

According to The Huffington Post, Corinthian execs served on the boards of both ACCSC and ACICS.

And those boards comprise mostly industry executives. In 2013, eight out of 13 board members supervising ACCSC were for-profit execs and 10 out of 15 board members supervising ACICS were executives at for-profit colleges.

“The federal government is being played for a chump,” Sen. Richard Durbin (D-Ill.) told the Huffington Post in 2013. “The for-profit schools’ accreditation agencies are guilty of some of the worst conflicts of interest. They are part of the same industry, and they pat one another’s backs and rub each other’s bellies while students and the taxpayers get cheated.”

North Carolina has a say in which colleges get to receive veterans benefits — to a degree.

Accreditation does matter when it comes to deciding which higher education programs are worthy of receipt of veterans’ education benefits, according to the head of the North Carolina State Approving Agency, Joe Wescott—but it’s one of many factors.

“To get approved, a school has to have offered the program successfully in the state for two years, needs a physical location in North Carolina, and must be properly licensed.”

Wescott says he looks at accreditation more closely if one of those top three requirements are not in place.

And accreditation aside, there’s another loophole that online for-profit schools like Corinthian can sneak through.

“There’s no way to go after them if they offer an online program that provides a terminal degree, is accredited and is approved in another state,” said Wescott—which means for-profit schools that fit those criteria can virtually set up shop and enroll NC veterans using GI benefits without gaining approval from his agency.

Corinthian fits that bill—they have no brick and mortar presence in North Carolina, but they are accredited and approved through other state agencies—so veterans can log onto their website and enroll in their online degree programs—and use their GI benefits to cover the cost of attendance.

And if you take veterans out of the picture and you look at your average student using federal student loans, grants or cash to attend for-profit colleges, there’s no additional gatekeeper for those scenarios aside from the national and regional accrediting agencies.

Wescott, who heads up the National Association of State Approving Agencies, says it’s his mission to fix these kinds of loopholes with the end goal of improving oversight of for-profit colleges to protect the nation’s veterans from scams.

“I’m a veteran too,” said Wescott, who has testified before Congress about strengthening oversight of online for-profit colleges.  “You better believe I’ll do what it takes to make sure our veterans are protected.”

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