Another Accreditor Faces No Consequences for Failing at Its Job

NACIQI sounds a bit like a Marvel villain name, but it is actually the acronym for the federal National Advisory Committee on Institutional Quality and Integrity, which reviews higher education accrediting agencies (accreditors). Accreditors are the organizations responsible for ensuring colleges and universities provide students with a high-quality education and, in the process, act as gatekeepers to billions of dollars in federal financial aid.

During NACIQI's recent February meeting, the oversight panel reviewed the performance of the Council on Occupational Therapy (COE). COE appeared before NACIQI to answer questions about its failure to spot repeated fraud and abuse at Florida Career College (FCC). FCC’s documented abuses and predatory recruitment practices resulted in the Department of Education (ED) terminating the school's access to federal financial aid, along with other sanctions.

ED’s investigation into FCC discovered various abuses at the school, including using false job placement data to persuade students to enroll, as well as falsifying ability-to-benefit tests that allow students without high school diplomas to show they can succeed in college. These abuses went on for years. FCC’s predatory behavior left many students mired in debt, with no credentials, and no better job prospects than before they started.

How Does NACIQI Work?

Accreditors who seek federal recognition must be reviewed by NACIQI every five years. The committee reviews reports from ED’s accreditation group on each agency under consideration, asks questions of the accrediting agency staff, and recommends whether to continue federal recognition of the agency or not.

NACIQI can recommend withdrawal of recognition, renewal of recognition for five years with no conditions, or renewal for a shorter period while requiring the agency to submit a compliance report showing that it has fixed issues of concern. The committee's recommendation is provided to a senior official at ED, usually a political appointee, who makes the final decision on whether to renew recognition.

The last time COE came before NACIQI for recognition, ED’s accreditation group and NACIQI members raised concerns about the agency. The primary focus of those concerns was that the agency was failing to properly oversee FCC, including missing issues that indicated the school was committing fraud. As a result, COE’s recognition was renewed for a limited time to allow it to show it had improved its practices. The resulting compliance report and reviewing whether COE had done an effective job of ensuring that FCC was providing students with a high-quality education was the focus of this meeting.

What Did the Council on Occupational Education Miss at Florida Career College?

FCC moved its accreditation to COE after ED withdrew federal recognition from the Accrediting Council for Independent Colleges and Schools (ACICS), the accreditor notorious for giving its seal of approval to multiple predatory for-profit colleges. COE quickly approved FCC, apparently unconcerned that many ACICS-accredited schools had engaged in fraud and abuse.

FCC’s abuses included multiple predatory recruiting practices documented by the Republic Report. These included: providing prospective students with false job placement rates, enrolling students with felonies that would bar them from employment in the field they were training for, and using food to entice homeless people to enroll at the college. FCC staff who spoke to the Republic Report noted that homeless enrollees often struggled to keep up with the work and would drop out, but only after FCC had captured federal financial aid dollars from them.

The most blatant fraud was helping students without high school diplomas cheat on Ability to Benefit (ABT) tests. Students without a high school diploma or GED can take an ATB exam, to prove they can succeed in a post-secondary program. Students who pass become eligible for federal financial aid like Pell Grants and federal student loans.

ED’s investigation found that FCC consistently and repeatedly interfered with ATB tests to ensure students passed. Nationwide in the 2021/22 award year, 14,516 students became eligible for federal financial aid through ATB tests. 74 percent of those students were enrolled at FCC campuses. All told, almost half of the students FCC enrolled every year qualified for federal financial aid by taking an ATB exam.

More than half of the FCC students who took ATB tests to qualify for aid withdrew before completing a certificate. Most of those students still used limited Pell Grant dollars or took on student loans while gaining no benefit from their program of study.

The only response from COE to these abuses was to place FCC on a “Notification of Apparent Deficiency” in July 2020. This status is the lowest level of sanction that COE employs, and simply requires the institution to respond to the agency showing that it has fixed the problems highlighted in the notification. COE took no further action against FCC over the next three years, leaving FCC in this status until the school voluntarily withdrew from accreditation as it prepared to close.

Following its investigation and withdrawal of FCC from Title IV programs, ED reached a settlement with FCC’s parent company, International Education Corporation. The settlement agreement imposes strict rules on other schools owned by FCC’s parent company, International Education Corporation (IEC), and requires the resignations of the CEO and CFO of IEC. Additionally, IEC was required to provide ED a $6 million letter of credit that can be used to pay for any liabilities or loan forgiveness for students required as a result of the misconduct.

Given the extensive evidence that COE failed to provide meaningful oversight of Florida Career College, why did the Department of Education and NACIQI recommend them for continued approval?

Why Did NACIQI Recommend Continued Recognition of COE?

The compliance report’s staff findings, which recommended renewed recognition, suggests that the accreditation group at ED continues to focus too much on whether accreditors are meeting process requirements and too little on whether an agency has effective standards and is effective at implementing them.

The staff analysis notes in multiple places that COE had standards in place and followed the procedures it has established for reviewing colleges when there are reports of problems. However, little to no consideration is given to whether COE’s procedures are or were effective. The focus on process over substance allows poorly performing accreditors to continue receiving ED’s seal of approval when evidence suggests ineffectiveness.

The staff analysis says, “The agency’s compliance report must demonstrate that it has meaningfully engaged with its obligations under section 602.20 to enforce its accreditation standards with respect to complaints of fraud and criminal activity at Florida Career College (FCC)”. It is hard to see how placing FCC on the lowest level of warning and taking no further action for three years is evidence of “meaningful engagement.”

The compliance report makes it clear that ED’s accreditation group’s primary focus is on whether COE conducted an investigation of Florida Career College, not whether that investigation was effective. Given the Department’s recent efforts to consider the effectiveness of accreditors' standards, it is imperative that the accreditation group and NACIQI focus more on accreditor effectiveness and less on box checking pro forma investigations.

Accreditor policies are only as good as their implementation. Agency effectiveness relies on robust implementation, and COE’s implementation was deeply flawed. FCC is also not the only college where COE has missed significant problems. Vista College closed in the middle of the semester in 2021 with no notice to students, while having a clean bill of health from COE.

It makes no sense for one arm of the Department to say that a college has so many failings it can no longer participate in Title IV programs while another says the agency overseeing that institution is doing its job effectively.

Only two members of NACIQI voted against recognizing COE for the rest of its five-year term. Members who voted to recommend COE’s continued recognition said it would be dangerous to focus on one example of failure when COE appears to be doing a good job overseeing other institutions. This approach misses the reality that oversight functions, including accreditation, are meant to catch the worst actors and minimize the amount of harm they can cause.

If COE cannot spot problems at an institution when they are this obvious, egregious, and ongoing, it cannot be trusted to protect students by spotting and preventing smaller problems at the colleges it oversees. COE’s failure’s are all the more damning because it took over accreditation of FCC from ACICS, with full knowledge that ACICS was notorious for poor oversight of colleges. Any school moving its accreditation from ACICS should have been under close scrutiny.

COE should have had its recognition withdrawn or, at a minimum, been re-approved for a shorter time with another compliance report to show that it is actively working to improve its effectiveness as an agency.

NACIQI’s decision to recommend COE for continued federal recognition sends the signal to other accreditors that so long as they check off the right boxes, it does not matter whether they are ineffective at protecting students from bad schools and programs. ED’s accreditation group and NACIQI both need to show they will hold accrediting agencies to higher standards, or more students will be harmed by predatory schools.