Federal Officials Should Get Tougher on Accreditors | American Enterprise Institute

The National Accrediting Commission of Career Arts and Sciences (NACCAS) is on notice. Earlier this summer, an Education Department (ED) advisory panel voted 9-3 to recommend against renewing the accreditor’s federal recognition. NACCAS accredits hundreds of schools, mostly in the beauty industry, and its stamp of approval is the key for those institutions need to unlock access to federal Pell Grant and student loan dollars. NACCAS schools collected over $1 billion in federal funds in 2024.

The federal government relies on accreditors to ensure quality at colleges that draw taxpayer funds. Yet accreditors have often failed to take action against low-performing institutions. The incentives for accreditors to do so are weak: accreditation commissions are stacked with representatives of member colleges, and schools have sued their accreditors for revoking recognition. From an accreditor’s perspective, rubber-stamping schools in the face of repeated poor performance is the easiest and simplest thing to do.

The only remedy is pressure from the other direction—that is, holding accreditors accountable when they fail in their duties of quality assurance. To that end, federal officials need to step up their oversight of accreditors and be willing to take action when the watchdogs fall asleep. ED has multiple opportunities before it to do just that.

Let’s start with NACCAS. Federal regulations require that accreditors set forth standards evaluating their institutions’ “success with respect to student achievement”—yet NACCAS’ standards for graduation and job placement rates are substantially lower than its peer accreditors’. Perhaps as a result, the Office of Federal Student Aid flagged over 700 NACCAS institutions as producing “lower earnings”—that is, alumni tend to earn less than someone with only a high school diploma. What’s more, when NACCAS did place institutions on probation (or take other negative action) for noncompliance with its standards, an ED staff report found that NACCAS often renewed the institution’s accreditation anyway without resolving the negative action—making it appear that the institution had returned to compliance even if the underlying issues remained unresolved. A New America report found that NACCAS institutions frequently led their students to believe that they were in good standing with the accreditor.

NACCAS isn’t the only accreditor with problems. ED’s advisory panel, the National Advisory Committee on Institutional Quality and Integrity, voted 12-0 against renewing recognition for the Council on Naturopathic Medical Education for a host of compliance issues including insufficiently rigorous student achievement standards. ED continued the agency’s recognition but gave it 12 months to clean up its act. Even the American Bar Association (ABA) could be in hot water: ED staff recently recommended terminating the ABA’s federal recognition over several problems, including that its accreditation division is not appropriately “separate and independent” from the broader professional organization. Insufficient separation can create a conflict of interest, as it effectively allows professional associations to raise barriers to entry in their line of work through the accreditation system.

ED officials have not yet made a final decision on NACCAS. Derecognizing the agency, which would force all its institutions to find new accreditation or lose access to federal funds, is a possibility (though ED may be reluctant to take such a drastic step).

Even if ED doesn’t pull the plug, officials can still impose more moderate penalties. Officials could restrict NACCAS’ ability to approve new institutions, prohibit the accreditor from deferring consequences when schools fail to meet its standards, block its institutions from opening new programs or enacting other “substantive changes,” require its institutions to freeze their enrollments, or preemptively demand that schools ink teach-out agreements with non-NACCAS colleges, which would allow students to more easily transfer their credits should a NACCAS institution close. Those intermediate sanctions could turn up the pressure on the accreditor to fix problems without immediately throwing all its schools into limbo.

ED officials should get used to flexing their muscles on accreditation enforcement, because it will only become more important. A proposed regulation would bolster the regulations governing accreditors—requiring them to set tougher student achievement standards, strengthen what it means to be “separate and independent” from related trade associations, and improve oversight of transfer-of-credit policies, among other things. Many of these changes are valuable, but for them to be effective, ED will need to ensure that accreditors adhere to both the letter and the spirit of the new rules. Tougher penalties for accreditors violating the current rules would convince other agencies that ED is serious about reform.

President Trump called accreditation his “secret weapon” for higher education reform. Even those who oppose the current administration, though, can appreciate that higher education’s watchdogs need watching themselves. The time is ripe to develop a toolbox to enforce federal accreditation standards—and cultivate the willingness to use it.