Slippery Slope: The Subcommittee on Distance Learning and Educational Innovation and Fear of the “Race to the Bottom” in Accreditation Standards

The Department of Education (“Department”) conducted its first negotiated rulemaking session on January 14-18, 2019. The Committee on Accreditation and Innovation (“Main Committee”) met on January 14th and 15th. The Subcommittee on Distance Learning and Educational Innovation (“Subcommittee”) met on January 16th and 17th with the goal of reviewing certain language in 34 CFR 600, 602.3 and 668 and making recommendations to the Main Committee regarding the Department’s proposed revisions to these code sections.

One of the goals of the Department’s revisions, as expressed in its “Rethinking Higher Education – Accreditation Reform” white paper of December, 2018, was to free institutions and accreditors from the “regulation-induced conformity” imposed by the current regulatory scheme and to allow accreditors to pursue innovative, creative solutions. To that end, the Main Committee was asked to review revised language from the Department which significantly reduced barriers to entry and oversight of accreditation agencies. The Main Committee, in general, expressed serious reservations about the effect of liberalizing the Department’s regulation on the accreditation landscape during its committee sessions.

The Subcommittee expressed similar reservations regarding the expansion of competition in the area of accreditation. The members of the Subcommittee struggled with the idea of what exactly “competition” would mean in the accreditation space. In looking at the desirability of one accreditor over another, members of the Subcommittee pointed out that, while students look for schools that are accredited rather than schools that are not, the students’ analysis ends there; accreditors are not brands or marks of quality in the judgment of the students, and, in the eyes of a student, there is little to differentiate one accreditor from another. The members of the Subcommittee pointed out that institutions, and potential bad actors in particular, will look to the accreditor with the most relaxed standards, and thus the liberalization of the accreditation space will create a “race to the bottom” in accreditation standards.

The Subcommittee’s concerns about a race to the bottom were sharpened by the Department’s proposed revisions to the definition of a credit hour. According to the Subcommittee, the Department’s revisions shifted the responsibility for defining a credit hour from the Department itself to the institution and its accreditor. Since the credit hour is the currency of financial aid and inter-institution transfers, the Subcommittee worried that should there be a race to the bottom amongst accreditors, lax accreditors could devalue that currency by defining credit hours to maximize institutional profitability and flexibility.

The Subcommittee expressed similar concerns with the Department’s proposal to allow a Title IV eligible institution to use ineligible entities to provide 100% of a degree program. An institutions’ use of ineligible entities would be subject only to the limitations placed on the institution by the accreditor, and would not be supervised by the Department. The Department’s goal with this revision was to allow schools greater freedom to use ineligible entities to provide their graduates with the skills necessary for the workplace. The Subcommittee members pointed out that the value of the program would then be entirely dependent on the quality of the accreditors overseeing it. Under the revised rules, an ineligible institution could contract with a distressed Title IV eligible institution as a shell to package their Title IV ineligible programs. In that way, a bad actor could defraud students who, attending a Title IV school expecting a university level education, would instead receive a repackaged ineligible program.

The Subcommittee acknowledged that the current definition of the credit hour presents issues for nontraditional institutions, and that the current skills gap between what employers require from entry level employees and what schools provide is a problem for all of higher education. However, the members of the Subcommittee found that the sweeping changes proposed by the Department would make it too easy for students and taxpayers to fall prey to fraudsters and other bad actors. As negotiated rulemaking moves forward, the committee members and the Department will need to reconcile the need to allow innovative solutions with the consumer protection functions of the regulatory triad.