Outsourcing Accreditor Oversight to States: A Bad Idea in the Making

A new proposal—H.R. 4054, the Accreditation Choice and Innovation Act—would allow states to approve and oversee accrediting agencies for higher education institutions operating within their borders. While proponents argue this would provide more localized oversight and foster innovation, the reality is far more complex and potentially harmful to educational quality and consumer protection. Allowing states to recognize accreditors and be responsible for their oversight would mark a significant shift in higher education policy, raising questions about consistency, accountability, and the capacity of states to effectively take on this expanded oversight role. It's important to consider the regulatory functions states already perform—and what it would mean for them to also serve as gatekeepers to federal financial aid through their recognition of accreditors.

The federal government relies on what’s known as the “program integrity triad” to safeguard the quality of higher education and protect its financial investment in students. This triad is made up of three distinct but complementary entities: the federal government, accreditors, and states. For a college or university to participate in federal student aid programs, it must be approved by all three. The U.S. Department of Education provides federal financial aid and sets minimum standards that institutions must meet to be eligible. Accreditors, recognized by the Department, serve as independent evaluators of academic quality and institutional effectiveness—they function as gatekeepers to federal aid by determining whether institutions meet rigorous educational standards. Lastly, institutions must be authorized by the state in which they operate. State authorization requires that institutions comply with state laws and regulations, and allows states to monitor institutional operations and intervene when necessary to protect students and the public interest.

In order for an accreditor to be a gatekeeper for federal student aid, it must be recognized by the Secretary of Education. This formal recognition process was established in 1972 through amendments to the Higher Education Act of 1965 (HEA), when Congress gave the federal government the authority to determine which accrediting agencies could serve as reliable gatekeepers for federal funds. The U.S. Department of Education (Department) holds accrediting agencies to standards outlined in the HEA through this process, with help from a federal advisory board called the National Advisory Committee on Institutional Quality and Integrity, or NACIQI, which was created in the 1992 reauthorization of the HEA. The Department reviews each accreditor every five years and evaluates whether they’re doing their job: making sure colleges actually serve students and meet baseline expectations. That includes looking at whether the accreditor enforces the standards required under the HEA. NACIQI reviews the Department’s analysis and recommendation and then makes its own. Based on NACIQI’s recommendations, a senior Department official decides whether to continue recognizing an accreditor, and therefore allows schools they accredit to access federal student aid. It’s not perfect, but this process is designed to keep accreditors independent, focused on quality, and accountable to the public. And it’s appropriate for the Department to have oversight since the federal government is relying on agencies to safeguard federal dollars.

The Accreditation Choice and Innovation Act proposes a dramatic shift in this framework by allowing states to approve and oversee accrediting agencies that would determine institutional access to federal student aid. While this may sound like a reasonable expansion of state authority to some, it blurs the boundaries between the triad’s roles and risks weakening the system of checks and balances that ensure transparency, accountability, and educational quality. Giving states the power to recognize accreditors could introduce inconsistent standards across state lines, reduce oversight, and open the door to lower-quality institutions—ultimately putting both students and taxpayer dollars at greater risk. Furthermore, there is substantial risk that this could undermine academic freedom and institutional autonomy.

If the goal is to strengthen higher education, before giving states another job, we should first improve their existing oversight role in the program integrity triad. State oversight of higher education is highly uneven, and in many states, it is weak, inconsistent, or largely symbolic—often amounting to little more than a one-time approval with no meaningful, ongoing monitoring of institutional quality or student protections. There are several reasons for this problem: resource and capacity issues, an unwillingness from some states to take an oversight role, and more. Improving state authorization as it is necessary, but there has been little progress in strengthening this role.

Variation in State Authorization Practices

Looking across the states, there is significant variation in how states approach authorization. For one, the standards and requirements for state approval can differ wildly. Requirements can vary depending on the type of institution, such as degree-granting versus non-degree, for-profit versus non-profit, public versus private, or distance education versus in-person institutions—both across states and within states. Some states have one agency overseeing higher education, while others have multiple agencies. In the states with multiple agencies, they usually regulate different sectors of higher education. In many states, private, non-profit colleges have simply been approved to operate by a state, but have no agency overseeing them, or when they do, it is simply a rubber stamp with no active or continual oversight.

These differences are evident in all aspects of state oversight, including the initial authorization of new institutions, reauthorization processes, and the regulation of out-of-state distance education providers. States exhibit a range of approaches, from highly centralized and stringent systems to more autonomous and flexible frameworks, leading to inconsistencies in oversight and consumer protection. The inconsistency in authorization approaches among states contributes to varying levels of disparities in the quality of education and consumer safeguards. Without standardized processes, students may encounter disparities in institutional quality and protections against predatory practices. For instance, some states may have robust mechanisms to prevent fraudulent institutions, while others may lack such safeguards, leaving students vulnerable. ​

Lack of Capacity and Structural Challenges

Part of the problem is structural. Many state authorization agencies operate with limited funding, limited staff, and a reliance on institutional fees rather than stable public appropriations. A recent presentation from the State Higher Education Executive Officers Association (SHEEO) highlights wide variations in how state agencies collect and use data and quotes an authorizer who admitted, “I just look at the documents ... we just don't have the funding.” SHEEO’s research underscores significant concerns regarding the capacity and funding of state authorization offices. These agencies are often under-resourced, operating with limited staff and budgets that are primarily reliant on fees from institutions they oversee, rather than stable state appropriations. This dependency on fees can lead to budgetary uncertainties and staffing constraints, impeding their ability to effectively monitor and regulate higher education institutions.

A History of Avoiding Oversight

While some argue education should be "returned to the states," the idea is misleading. This claim is misleading, as the responsibility for overseeing education already primarily rests with the states. However, it’s a responsibility many states have repeatedly done poorly and refused to strengthenn.

​In the 1980s and 1990s, rampant fraud and abuse in student aid programs, particularly within the proprietary sector, was brought to the forefront of higher education policy conversations. Part of the problem was that states did not regulate for-profit colleges, even after earlier amendments to the HEA massively expanded the types of providers that were eligible to participate in the federal student aid programs. In response, the 1992 amendments to the HEA changed many areas of higher education oversight, including clarifying the states’ role in the triad. One of the key reforms was the creation of State Postsecondary Review Entities (SPREs), in an effort to enhance state oversight and curb these issues.

Under the law, states were tasked with defining acceptable standards for institutions, which had to include indicators of abuse such as high default rates, heavy reliance on federal financial aid, and significant fluctuations in aid levels year-to-year. While states had flexibility in setting these standards, the Secretary of Education held final approval over the criteria. Once a state had established an authority, defined its minimum standards, and received approval, it would conduct reviews of all institutions within its jurisdiction. Institutions failing to meet these standards would undergo a more thorough investigation by the SPRE. If an institution remained out of compliance, the Department could use the SPRE’s findings to revoke its access to federal financial aid.

However, despite their initial promise, SPREs were short-lived. The association representing private, non-profit colleges lobbied hard against the provision of the law creating SPREs, as well as the implementing regulations. States also fought against the creation of SPREs. Some believed they were unnecessary because they did not have schools with high default rates. For others, capacity was the problem as they did not have the number of staff of other states and considered the process too difficult. Some states believed that the SPRE requirement conflicted with their traditional role in higher education policy. Even though the federal government provided funds, this was too big of a mandate to many.

Distance Education and the Rise of Reciprocity

In 2010, the Department of Education sought to clarify the role of states in the triad after California eliminated its state authorization agency for for-profit colleges. To address this, the Department issued regulations that established minimum expectations for what constituted a college being authorized by a state.

But a growing online landscape across state borders required further rethinking the States role in oversight. Instead of strengthening oversight, States chose to outsource it. As more students sought online education, institutions faced the challenge of navigating a patchwork of state laws that required them to seek authorization to offer programs across state lines. States created a reciprocity agreement to provide a streamlined process, enabling institutions to avoid the administrative burden of individually applying for approval in each state. The National Council for State Authorization Reciprocity Agreements (NC-SARA), a non-profit entity established by States, was formed as the governing body and to play the crucial role of ensuring that the system was consistent, equitable, and maintained academic integrity while providing students access to high-quality educational opportunities regardless of where they reside. In practice, it meant that States would agree to not to enforce their own education laws so that schools operating across state lines would be subject to fewer rules. Forty-nine states joined NC-SARA. The agreement even forbade states from enforcing their other higher education laws, like requiring institutions to comply with certain consumer protection laws like refund policies or requirements related to tuition recovery funds.

In 2014, the Department again conducted a rulemaking seeking to clarify the role of state oversight of institutions operating online programs across states. While institutions were always subject to state authorization requirements for their distance education programs, states often ignored those schools without a physical presence in their state. The regulations stated that colleges and universities could meet the state authorization requirements for their online programs through a reciprocity agreement, like the one overseen by NC-SARA, but the regulations said that a reciprocity agreement cannot prohibit a state from enforcing its own laws. States pushed back and the next administration delayed the rule’s effective date and eventually re-regulated, removing that requirement that prevented a reciprocity agreement from superseeding state laws.

The Present Reality: Still Not Ready

These same challenges persist today. In 2024, during the Biden Administration's negotiated rulemaking on state authorization, proposals to enhance oversight of out-of-state distance education providers faced resistance, including from States. A representative of the National Council of State Legislatures, the membership association representing state legislators and their staff, provided comments during the public hearings and stated that the federal government should defer to states when it comes to authorization and other matters of accountability in higher education, rather than impose new requirements (see testimony starting on page 11, here). During the rulemaking sessions themselves, the president of SHEEO, the membership association representing chief executives of statewide governing, policy, and coordinating boards of postsecondary education and their staffs, and an alternate negotiator in the process, voiced strong opposition to the proposed changes, cautioning that increasing federal requirements for state oversight could overwhelm under-resourced state agencies.

When Oversight Fails, Students Pay the Price

We’ve seen what happens when states fail to adequately oversee higher education—and it’s not pretty. In California, the state’s oversight agency had a backlog of more than 1,200 unresolved complaints, leaving students exposed to fraud and abuse. Corinthian Colleges, once one of the largest for-profit college chains in the country, was allowed to operate for years despite mounting evidence of misconduct. The company aggressively recruited low-income students with promises of job placement and quality education, but in reality, many of its programs led to poor outcomes and unaffordable debt. By the time California stepped in, thousands of students had been misled and buried in debt—ultimately leading to $5.8 billion in federal student loan discharges, the largest single discharge in the history of the Department. In Minnesota, Globe University and the Minnesota School of Business issued predatory, high-interest loans and misrepresented programs, but the state didn’t take action until after whistleblowers forced their hand. And a Senate investigation made it plain: weak state oversight and lax accreditation were central to how the problems in the for-profit college sector got so bad in the first place.

These aren’t isolated incidents—they’re warnings. How are states supposed to ensure accreditors are doing their job, when they can’t even do theirs? If we’re going to talk about giving states the power to recognize accreditors, we need to be honest about the track record. Without stronger guardrails, more capacity, and a serious commitment to protecting students, we’re just opening the door to more harm.

State governments are inherently political entities, and entrusting them with the power of overseeing accreditors opens the door to political influence and conflicts of interest. Accreditation decisions—meant to be objective evaluations of educational quality—could be swayed by political agendas, institutional loyalties, or regional economic considerations. That opens the door to inconsistent decision-making and inequitable outcomes, particularly for institutions serving underrepresented or marginalized communities.

We’ve already seen how some states have injected partisanship into areas accreditors are protecting—like academic freedom, shared governance, and curricular integrity. In Florida and Texas, we’ve seen attacks on academic freedom and free speech that directly interfere with curriculum, one of the responsibilities of accreditors. These moves aren’t just rhetorical—they threaten the independence that higher education relies on to pursue truth, challenge ideas, and serve the public good. Handing those same actors the authority to approve or oversee accreditors would erode the neutrality and credibility of the accreditation process.

And this isn’t only about partisanship. Accreditors already face tough decisions—revoking accreditation is one of the most consequential moves they can make, often leading to institutional closure. It’s a decision that requires clear-eyed, evidence-based judgment, and many argue that accreditors hesitate to take action even under current conditions. Now imagine adding local politics to the mix. Would a state be okay with an agency they oversee revoking the accreditation of a struggling public or religious college that employs hundreds of local residents or holds political sway in the legislature? Would they put pressure on that agency to influence the decision? The pressure to prioritize short-term political or economic considerations over long-term educational integrity would be immense—and students would be the ones left paying the price.

This concern isn’t hypothetical. During the 2024 negotiated rulemaking process, a state regulator shared their experience in public testimony, explaining that politics routinely influence oversight:

“It's well recognized that each state has its own framework for this work, but it has been my experience that the lens of this work is seen through politics of consumer protections. Politics directly impact the depth and breadth of protections afforded to students and the resources made available to regulators to facilitate this work. Politics, the threat of litigation, financial resources, and data-sharing laws impact my ability as a regulator to speak forthrightly about my experiences and having the tools to detect many of the consumer protections discussed during this rulemaking process. It has not been my experience that states act intentionally and directly to safeguard Title IV financial aid or have any consistency in minimum consumer protections.“ (See testimony beginning on page 68, here.)

The bottom line: accreditation must remain independent, rigorous, and focused on students. And the appropriate role of accreditor oversight is not the states, but rests with the federal government.

It is also important to consider how a policy change such as this would affect existing accreditors, and therefore the quality of the institutions they approve. The push for having states approve accreditors is part of an effort by some who claim that part of the problem with the American higher education system is that it needs more accreditors. While it is hardly the case that accreditation isn’t ripe for reform, arbitrarily increasing the number of accreditors risks weakening the system altogether.

Chief among these is the risk of a race to the bottom. By creating an environment where institutions can choose from multiple accrediting bodies subject to the rules and oversight of 50 different approval entities, we risk diluting the rigor of standards and thorough reviews in favor of quick, superficial approvals. This competition among accreditors could encourage them to lower their thresholds to attract more institutions, potentially undermining the very purpose of accreditation: ensuring quality education that truly prepares students for success. Worse, such a system would exacerbate inequities in education, particularly for students from marginalized communities who depend on quality assurance to validate the value of their degrees. Ultimately, this approach does not benefit students; it risks setting them up for worse outcomes by fostering a system that prioritizes accreditation quantity over substance.

The challenges within the current accreditation system are already significant, but expanding the number of accrediting bodies and creating new approvers of the agencies would only exacerbate these issues. First, accreditors are often reluctant to take action against underperforming institutions because they fear costly litigation. The legal battles that could result from revoking accreditation are expensive and resource-draining, something many accreditors are ill-equipped to handle. Second, accreditors are member organizations, meaning they depend on fees from the very institutions they are tasked with overseeing. Shutting down a bad school, while necessary, disrupts their revenue stream and complicates their ability to manage the broader accreditation process. If there were even more accrediting bodies, these problems would become more pronounced. A larger pool of accreditors would give institutions more options, increasing the likelihood that troubled schools would simply shop around for a more lenient accreditor. This could create a chilling effect, where accreditors, fearing that their member institutions would leave for a competitor, would become even more hesitant to sanction schools for poor outcomes, further diminishing accountability and worsening the overall quality of higher education.

The notion of states approving accreditors for higher education may be framed as a push for innovation and choice, but letting states approve accreditors is more than just risky—it’s an irresponsible outsourcing of the federal government’s job. It’s the federal government—not the states—that’s on the hook for those dollars. Handing over accreditor recognition to states that already struggle with oversight isn’t just bad policy; it’s asking under-resourced state agencies to police the gatekeepers of billions in federal aid, when they often can’t even manage their current responsibilities.

This isn’t about improving oversight—it’s about weakening it. States would be given the power to recognize accreditors without the same guardrails or public accountability built into the federal process, opening the door to inconsistency, reduced standards, and more opportunities for predatory or low-performing institutions to gain access to taxpayer-funded aid. And let’s be clear: that’s not innovation—it’s deregulation dressed up as reform. Furthermore, giving states another job likely hinder their ability to do their existing oversight job, which as explained is already insufficient.

If we want a higher education system that delivers on its promise, we should be focused on strengthening the roles of the triad rather than short circuiting them: a triad where the federal government ensures accreditors are doing their job, states protect students through meaningful authorization, and accreditors maintain real quality standards rooted in outcomes. That’s how we protect students, safeguard public dollars, and uphold the integrity of higher education—not by handing the keys to the gate over to the states and hoping for the best.