WASHINGTON — Hundreds of for-profit colleges could close, leaving up to 600,000 students scrambling to find other schools, after the Education Department withdrew recognition of the nation's largest accreditor of for-profit schools.
The Accrediting Council for Independent Colleges and Schools said it would appeal Thursday's decision to Education Secretary John B. King Jr.
In a statement, ACICS interim president Roger Williams said the council would "continue diligent efforts to renew and strengthen its policies and practices" to meet the department's criteria for accreditors.
The accrediting agency has been accused of lax oversight of its schools, which included those once owned by the now-defunct Corinthian Colleges and the recently shuttered ITT Technical Institute.
In a letter to the council Thursday, Emma Vadehra, King's chief of staff, wrote that "ACICS's track record does not inspire confidence that it can address all of the problems effectively."
Vadehra said the department found fundamental problems with the council's work as an accreditor. Her decision followed staff and advisory panel recommendations to sever ties with the council.
If ACICS loses its appeal, hundreds of schools would be forced to find a new accreditor within 18 months or lose their ability to participate in federal financial aid programs, such as student loans and Pell Grants.
While the appeal is pending, ACICS retains its federal recognition and remains determined to fully execute its accreditation responsibilities in a professional manner, Williams said.
The decision was met with praise from Democratic lawmakers.
"Accreditors are supposed to be watchdogs, but this negligent agency rubber-stamped shady institutions like ITT and Corinthian for years, right up until the moment they collapsed," said Sen. Elizabeth Warren of Massachusetts.
But Steve Gunderson, president of Career Education Colleges and Universities, an industry lobbying group that represents for-profits, said the decision will have "horrible ramifications for hundreds of thousands of students, thousands of dedicated faculty and staff, and hundreds of communities and employers that rely on institutions accredited by ACICS."
Advocacy groups, lawmakers and others have long complained about the council. It has been accused of continuing to accredit schools under investigation for falsifying job-placement rates and claims for federal aid, illegal recruiting practices and misleading marketing claims.
The council allowed Corinthian Colleges, one of the largest chains of for-profit colleges, to continue to receive accreditation even while it was under investigation for fraud. Corinthian sold many of its campuses, closed others and filed for bankruptcy protection last year. Thousands of its former students are asking the Education Department to forgive their federal loans, in a taxpayer bailout that could top $3 billion.