What to Know After a School's Accreditor Loses Recognition
The Department of Education announced that it was denying the Accrediting Council for Independent Colleges and Schools' appeal to overturn the department's September decision to cease recognition of the agency. The initial decision came after the National Advisory Committee on Institutional Quality and Integrity, a federal panel, recommended shutting down the accreditor following strong criticism of ACICS' poor oversight. . The body accredited the now-defunct for-profit Corinthian Colleges, which closed last year, among others, such as the also recently closed ITT Technical Institute.
Since schools must be accredited by a Department of Education-recognized accrediting agency to receive federal financial aid funding, this decision will cause some upheaval with the 200-plus schools that ACICS currently accredits. If you are a current or past student at an ACICS-accredited school, here are answers to six key questions you may have right now.
[Consider school accreditation when determining a college's value.]
1. How do I know if my school is accredited by ACICS? Most schools post their accreditor on their website and marketing materials. If you're still not sure, you can check the ACICS database. The Department of Education is also requiring schools to issue disclosures to existing students regarding the schools' ACICS accreditation status.
2. Since my school is ACICS-accredited, will it now have to close? Probably not. When an accreditor loses recognition, its accredited schools have 18 months to find a new accreditor. The Department of Education has asked ACICS-accredited schools to indicate their plans to find new accreditation within the next 10 days.
If the schools do not find new accreditation within that 18 months, that does not automatically mean they will close, but it does mean that they will no longer be allowed to participate in federal student loan or other federal financial aid programs. If that happens, students will need to transfer to an accredited institution if they want to continue to use federal financial aid.
[Here's what to know if your college loses federal funding.]
3. What if my school does close? If a school closes within 120 days of your attendance and you were unable to complete your degree or certificate either at that school or by transferring to another school, you are eligible for discharge of your federal student loans.
The school may also assist you in the form of a teach-out, which is an agreement with another institution to accept the existing credits and help you complete your degree or certificate. The Department of Education requires all ACICS-accredited schools to submit teach-out plans now to ensure that students have these plans available if any affected schools do close.
[Learn about the three times college closings can affect student loan repayments.]
Note that you cannot both receive a discharge and transfer your credits -- you must choose one or the other. The Department of Education has recently clarified that those who cannot use their credits for the same or a comparable degree are eligible for discharge. This is because those who choose to pursue a substantially different major or educational focus would unlikely be able to use the majority of their credits from the prior degree attempt.
While discharging your loans may seem like an attractive option, it's important to understand that there's no way to recover the time or out-of-pocket expenses you have invested in your education up to this point. Transferring your credits and completing the degree or certificate may be a better investment than discharging the loans, starting over and possibly incurring the same amount or even higher debt to do so.
4. Are degrees and certificates from ACICS accredited schools still valid? Yes, an accreditor losing recognition has no effect on existing degrees or certificates.
5. Can I still get financial aid or use my veterans education benefits if my school loses accreditation? Most forms of financial aid require the school and program to be accredited, so if you school does not succeed in obtaining a new accreditor, you will no longer be able to receive most forms of aid.
If you are receiving veterans benefits, most, but not all, of these will also cease if the school loses accreditation. With that said, there are some nonaccredited programs that are allowed under these benefits. You can find more information regarding eligibility for veterans benefits on the Department of Veterans Affairs website.
6. Are my loans from an ACICS accredited school dischargeable? No. An accreditor losing recognition by the Department of Education does not in and of itself qualify your loans for discharge. You can find all the reasons for student loan discharge on the Federal Student Aid website.
Keep in mind that this situation remains somewhat fluid, particularly since ACICS is expected to file suit against the Department of Education to try and overturn the decision. Unless and until such a suit is filed and only if the court stops the clock during the proceedings, students can expect the steps outlined above to move forward.
While an accreditor losing recognition is a rare occurrence, the Department of Education has put several safeguards and plans in place to ensure that affected schools and their students are impacted the least amount possible. With that said, it's always a good idea to understand the impact that such a situation will have on you and know the best course of action to ensure your long-term academic and career success.
Betsy Mayotte, director of consumer outreach and compliance for American Student Assistance, regularly advises consumers on planning and paying for college. Mayotte, who received a B.S. in business communications from Bentley College, responds to public inquiries via the advice resource "Just Ask" and is frequently quoted in traditional and social media on the topics of student loans and financial aid.
