Most colleges can’t keep their doors open without an accreditor’s seal of approval, which is needed to get students access to federal loans and grants. But accreditors hardly ever kick out the worst-performing colleges and lack uniform standards for assessing graduation rates and loan defaults.
Those problems are blamed by critics for deepening the student-debt crisis as college costs soared during the past decade. Last year alone, the U.S. government sent $16 billion in aid to students at four-year colleges that graduated less than one-third of their students within six years, according to an analysis by The Wall Street Journal of the latest available federal data.
Nearly 350 out of more than 1,500 four-year colleges now accredited by one of six regional commissions have a lower graduation rate or higher student-loan default rate than the average among the colleges that were banished by the same accreditors since 2000, the Journal’s analysis shows.
“They told me I could build a future there,” says Rachel Williams, 24 years old, who dropped out of Kentucky State University in Frankfort in 2013 because her family couldn’t afford the college anymore and she was losing faith in it. She amassed about $34,000 in federally backed loans.
Kentucky State has a graduation rate of just 18%, and nearly 30% of students who began repaying their loans in fiscal 2011 had defaulted within three years.
The Southern Association of Colleges and Schools Commission on Colleges reaffirmed Kentucky State’s accreditation in 2009. A preliminary report by the reviewers made no mention of loan defaults and praised Kentucky State for plans to improve its graduation rate.
College officials say they couldn’t find the final report and wouldn’t comment on the findings. The accreditation group doesn’t publicly release reports.
Belle Wheelan, president of the Southern Association, which is based in Decatur, Ga., and reviews colleges in 11 states, declines to comment on Kentucky State but says accreditors don’t follow “bright lines” when assessing performance because students enter college with different levels of academic preparation, resources and goals.
Accreditors say their job is to help colleges get better rather than to weed out laggards. Colleges pay for the inspections, which can cost more than $1 million at large institutions.
“You’re not there to remove an institution,” says Judith Eaton, president of the Council for Higher Education Accreditation, a trade group. “You’re there to enhance the operation.”
The government has relied on accreditors as watchdogs since the 1950s. Colleges are evaluated by teams of volunteers from similar institutions, who follow standards set by the accreditation group. For example, colleges sometimes are required to collect student-retention data but given the freedom to set their own goals for those numbers.
The accreditation system was born near the start of the 20th century as a voluntary effort by a small number of colleges to set standards for themselves. The colleges wanted to distinguish themselves from high schools.
The Education Department is barred by law from telling accreditors how to do their job. In 2013, President Barack Obama proposed tying access to loans and grants to a new ratings system that would compare colleges on measurements such as graduation rate, student debt and income after graduation.
Trying an End Run
The proposed changes would essentially make an end run around accreditors. “We are concerned that accreditors are not doing enough to protect students,” says Ted Mitchell, undersecretary at the Department of Education.
Democratic and Republican lawmakers have voiced opposition to Mr. Obama’s plan, citing concerns about inadequate data.
Still, the current accreditation system is drawing more scrutiny as college costs climb farther out of reach for many American families. Outstanding federal student-loan debt has doubled to $1.2 trillion since 2007. In the past decade, the amount of loans and grants awarded annually has jumped more than 50% on an inflation-adjusted basis, reaching $134 billion last year.
The $16 billion sent last year to students at colleges that graduated less than a third of their students was nearly 20% of all the loans and grants to students at four-year institutions.
The overall graduation rate for four-year colleges is about 59%. About 11% of students at four-year colleges who started repaying their loans in 2011 defaulted by the end of 2013.
“It’s a national scandal that we’re pouring huge sums of money into schools with very, very low graduation rates,” says Richard Vedder, an economist at Ohio University and director of the Center for College Affordability and Productivity, a think tank.
At a Senate hearing Wednesday about the accreditation process, Sen. Lamar Alexander (R., Tenn.) said lawmakers have a duty to make sure students spend their federal aid at good colleges. “We need to find a way to make accreditation work better,” said Mr. Alexander, chairman of the Senate committee overseeing higher education.
Schools owned by for-profit college operator Corinthian Colleges Inc. were accredited until the company filed for bankruptcy in May. Corinthian wasn’t part of the Journal’s analysis because it primarily awarded two-year degrees.
The Obama administration said last week it will forgive federal student loans owed by thousands of Corinthian students at a potential cost of $3.5 billion.
“The collapse of Corinthian Colleges shows that we all need to do more for students to ensure that quality is verified, students are protected and taxpayer dollars are well-spent,” said Sen. Patty Murray (D., Wash.) at Wednesday’s hearing.
The six regional accrediting organizations oversee more than 3,000 colleges. In the past 15 years, those accreditors have rescinded the membership of 26 educational institutions, including 18 four-year colleges.
The average graduation rate for four-year colleges that lost accreditation was 35% in the year before their removal. Those colleges had an average student-loan default rate of 9.3%. When accreditation was yanked away from a college, the move usually was for the college’s own financial problems, accreditors say.
To compare colleges that lost accreditation with institutions that still have it, the Journal examined federal data that track students seeking bachelor’s degrees at more than 1,500 four-year colleges accredited by the six regional organizations. Part-time and transfer students aren’t part of the government’s data, and colleges with fewer than 25 entering students weren’t included in the Journal’s analysis.
Through public-document requests, the Journal also reviewed the latest accreditation reports from more than 50 colleges with low graduation rates. Accreditors typically don’t make their reports public or disclose who evaluated a specific college.
At 11 colleges that have an accreditor’s seal of approval, the graduation rate was below 10% in 2013, the latest year for which figures are available. Twenty colleges had a loan default rate of at least 20% from 2011 to 2012, the most recent two-year period that is comparable to the average default rate at schools that lost their accreditation.
David Bergeron, a former acting assistant secretary for postsecondary education in the Obama administration, says graduation and default rates reflect “things that matter in the real world” and a college’s overall value.
The numbers are especially important given the shortage of data about job placement and earnings after college, he adds. Mr. Bergeron now is a vice president at the Center for American Progress, a liberal think tank.
Accreditors say self-oversight is the best way to protect quality in higher education, because academics have the necessary expertise and frame of reference to judge quality. The groups liken their role to unpaid consultants who keep colleges on track to meet their own goals.
A one-size-fits-all, government-driven approach would stifle the diversity that has made U.S. higher education successful, accreditors say.
“I want the federal government not to do this, so I am going to be as rigorous and objective and fair as possible,” says Sandra Elman, president of the Northwest Commission on Colleges and Universities, overseer of more than 150 institutions.
Colleges with some of the worst graduation and loan default rates in the U.S. have received glowing reviews. “Students consistently reported, ‘we love this place,’ ” reviewers wrote about the University of Maine at Augusta in 2007, citing “the caring and supportive faculty and staff.”
The Commission on Institutions of Higher Education of the New England Association of Schools and Colleges renewed the college’s accreditation through this year even though the graduation rate for students seeking bachelor’s degrees hasn’t topped 20% since 2004.
Barbara Brittingham, the accreditor’s president, declines to comment on the review. The University of Maine at Augusta’s interim president, Glenn Cummings, says the low percentage reflects the college’s commitment to low-income, nontraditional students. “America is worse off if you stop investing in people who are fragile but want the opportunity,” he says.
At Bluefield State College in West Virginia, accreditors from the Higher Learning Commission suggested in 2011 that new electronic signs on campus might be difficult for students to read while driving, according to a copy of the report. The report didn’t mention the college’s graduation rate of 25% or less since 2006.
Barbara Gellman-Danley, president of the Higher Learning Commission, declines to comment on the report. Bluefield State President Marsha Krotseng says the numbers “don’t tell the whole story” because transfer students who graduate from Bluefield State aren’t counted toward its graduation rate.
The accrediting panel’s visit to Kentucky State took three days. Faculty members and administrators from other small colleges showed up on behalf of the Southern Association, interviewed teachers and staff members, reviewed reports and concluded that Kentucky State was up to their standards.
That made the historically black public college’s students eligible for federal loans and grants through 2019. Kentucky State students got $21 million in federal aid last year.
A Dropout in Debt
Ms. Williams, who moved to Frankfort from her tough Chicago neighborhood in hopes of a career in law, says the college’s low graduation rate leaves many students with little to show for their investment.
“When I look back on it, I realize they were mostly interested in my money,” she says. Kentucky State wouldn’t comment on Ms. Williams.
Asked if a college with a 10% graduation rate can do a good job, Ms. Wheelan, the Southern Association’s president, responds: “It can be a good school for those 10% who graduate.”
In 2008, Edison O. Jackson, then president of Medgar Evers College in the New York City borough of Brooklyn, led the review of Coppin State University in Baltimore. Coppin State’s graduation rate is 14%, while Medgar Evers has a graduation rate of 15% among students seeking bachelor’s degrees. Medgar Evers offers two- and four-year degrees.
Mr. Jackson says his experience at colleges serving mostly low-income, minority students helps him understand the challenges of similar colleges and provide useful advice about how they can improve. Officials at the two colleges say they are trying to boost the percentage of students who graduate.
Arthur Rothkopf, a former president of Lafayette College, says the relationship between accreditors and schools can be too “cozy.” While he was leading the Pennsylvania college, he was assigned by the Middle States Commission on Higher Education to review the U.S. Military Academy in West Point, N.Y.
Mr. Rothkopf says he was friends with the West Point superintendent at the time, and the two men had stayed in each other’s homes. He is now an adviser to the Education Department and has advocated for breaking the link between accreditation and federal aid.
Elizabeth Sibolski, president of Middle States, says accreditors don’t allow colleges to choose reviewers but do seek advice from the colleges on who is best-equipped to do a peer review. Conflict-of-interest policies prevent reviewers from being assigned to a college where they have close ties, she adds.
In April, a Journal reporter observed an accreditation review at Western Kentucky University in Bowling Green after agreeing not to disclose the content of the discussions. The reviewers were serious and focused, and the atmosphere was collegial.
Western Kentucky delivered souvenir-filled gift baskets to evaluators’ hotel rooms and treated the reviewers to steak dinners. “We didn’t do anything at WKU that I haven’t seen done at other institutions,” said Richard Miller, vice provost at Western Kentucky, where the graduation rate is 50%.
Stephen Roderick, former provost at Fort Lewis College in Colorado, says he now has misgivings about his 2013 review of Glenville State College in West Virginia for the Higher Learning Commission. The review team wrote that the college had a “responsible program” to minimize default rates and “demonstrates a commitment” to evaluating graduation data.
Glenville’s graduation rate is 30%, while about 22% of students defaulted on loans from 2011 to 2013. Both percentages rank near the bottom 10% of accredited four-year colleges. David Millard, assistant to Glenville’s president, says the figures reflect the opportunity offered by the college to students in one of the poorest parts of the U.S.
Mr. Roderick says accreditors are inclined to see the best in colleges like Glenville, but that might not be the best for students. “Sometimes I feel that we’re doing more harm than good,” he says.