An agency that signed off on fraudulent colleges like ITT Tech that caused student debt to spiral is officially shutting down

  • ACICS, which accredited major for-profit schools, announced it will be shutting down.
  • Last month, the Education Department decided to strip the agency of its federal status.
  • ACICS will not appeal the decision but maintains it had been in compliance with federal standards.

An agency that signed off on some of the biggest for-profit institutions is now seeing its final days.

On Tuesday, the Accrediting Council for Independent Colleges and Schools (ACICS) announced it would “begin an orderly dissolution of the corporation” after President Joe Biden’s Deputy Education Secretary Cindy Marten decided to strip the agency of its federal status last month.

Accrediting agencies approve schools to hand out federal financial aid, like student loans, but over the past few years ACICS had fallen under increased scrutiny by allowing financial aid to flow to for-profit chains like ITT Technical Institute and Corinthian Colleges, which were found to have defrauded students by handing out loans they could not pay back.

While ACICS could have chosen to appeal Marten’s decision, it decided to abide by the department’s ruling but said it maintains “ACICS has been in substantial compliance with any objective, consistent, and reasonable interpretation of the recognition criteria.”

“I am extremely proud of the work we have done, especially in the last five years,” ACICS President and CEO Michelle Edwards said in a statement. “Nevertheless, the time has come to initiate the steps necessary to dissolve the corporation. In its 110 years of service as an accreditor, ACICS has had the honor of working to advance educational excellence at independent, nonpublic career schools, colleges, and organizations in the United States and abroad. We will continue to uphold those principles as we wind down our operations.”

ACICS said it will work with the remaining 44 schools it currently accredits to prepare for the transition, and the schools will have 18 months to find a new accreditor and continue receiving federal financial aid. 

In 2016, former President Barack Obama stripped ACICS of its federal status, but former President Donald Trump’s Education Secretary Betsy DeVos later reinstated the agency after concluding it could improve compliance within a year. She later launched an investigation in 2020 into its practices. In 2021, Biden’s Education Department moved to once again terminate ACICS’ federal status, and Tuesday’s announcement marks the end of that process. 

The for-profit schools that ACICS signed off on helped give rise to the “borrower defense to repayment,” which are claims borrowers can file if they believe they were defrauded by a school. Biden’s department has taken a number of steps to ensure defrauded borrowers get the relief they deserve by approving group discharges for those who attended ITT Tech and Corinthian, along with smaller amounts of relief for other schools found to be fraudulent. The department is also in the process of improving borrower defense through its regulatory rulemaking proposals, set to be implemented next summer.