Canary in the College?

Posted on October 1st, 2012, by 1 Comment

While it may just be a matter of coincidental timing, the recent announcements in the last week of retrenchments at both Bridgepoint Education Inc. and Kaplan Education (two of the largest for-profit higher education institutions) may be an augur of what is to come for the for-profit sector, at least for the near future. Interestingly enough, it appears that both moves were driven in no small part by concerns about accreditation. With respect to Bridgepoint, it appears that the cuts in admissions are focused on dealing with addressing student success problems that lie at the heart of a challenge to its accreditation while in the case of Kaplan, the decision to close campuses evidently stems from the threat of loss of accreditation at several campuses. In both of these instances, of course, the underlying importance is that the accreditation agencies function as gatekeepers for federal financial aid dollars (a role which has its problems, as CCAP points out in our report on accreditation, but that is a topic for another day), so a lose of accreditation would place these institutions in a difficult financial posture. It will be interesting to see if these trends in cutbacks continue or if other companies will take similar action or if these measures that have been taken will be sufficient and adequate.

  • Glen S. McGhee, FHEAP

    Accreditation is self-regulation. It is a mistake, I think, to ascribe too much autonomy and discretion to what is, in every sense, a peak association of the dues-paying membership. Even the so-called standards are “collegial,” i.e., there are no bright line minimum standards.

    With this firmly in mind, we are free to interpret these moves highly politicized, as brand-burnishing and image polishing: accreditors know that their days may be numbered, they know that Frontline exposes of online diploma mills hurt ALL their members, and they will therefore act to address that threat.

    This is, clearly, driven by self-interest. As I said, accreditation is self-regulation.

    Importantly, this is a direct response to recently enacted “gainful employment” requirements by US DOE, which limit how poorly schools can perform before they are denied financial access by the department — which would pre-empt the accreditors if the department acted first.

    In this sense, US DOE prodding has resulted in these relatively trivial moves by accreditors. If the gainful employment regulations are about to hit some schools, accreditors have nothing to lose by turning on their poorly performing members, however tentatively this may be.

    Kaplan and Bridgepoint, for their part, probably see the writing on the wall — they can tell which units will not meet the new federally enforced gainful employment and student loan default requirements. These are bright-line standards that the accreditors have been unwilling an unable (they are their membership) to enact.

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