These colleges' fates could change now that ACICS has its federal recognition back
Education Secretary Betsy DeVos restored federal recognition of the Accrediting Council for Independent Colleges and Schools (ACICS) in late November, but the for-profit accreditor and the colleges it oversees still have a tough road ahead.
For one, ACICS has shed about two-thirds of its member institutions since 2016, when it lost federal recognition required to issue federal financial aid. The Obama administration stripped the accreditor of its recognition after the high-profile collapses of two ACICS-accredited for-profit chains, Corinthian Colleges and the ITT Technical Institute.
DeVos's Education Department has focused on rolling back Obama-era regulations of the for-profit sector, but a new Democratic majority in the House of Representatives could stymie those efforts. Several presumptive committee leaders have voiced opposition to DeVos's agenda and said oversight of efforts to loosen regulations on for-profits will be a top priority.
As of July, roughly 85 institutions remained with ACICS as they weren't able to find a new accreditor, according to the Center for American Progress (CAP). While some appear healthy, at least one for-profit operator has already announced its closure since ACICS regained recognition.
The following institutions are among those that were still accredited by ACICS as of the Education Department’s announcement and are either adapting to survive in an ever-shifting higher education and political landscape or closing their doors permanently.
Education Corporation of America (ECA)
One of the largest for-profit operators, ECA, announced in early December that it was shutting down entirely after ACICS suspended accreditation for several of the campuses under the chain’s banner.
ECA runs Virginia College, Brightwood College and the Golf Academy of America. Altogether, its students accounted for nearly half of enrollment at ACICS-accredited institutions, CAP noted in July. The New England College of Business, which is owned by ECA but not accredited by ACICS, will keep its doors open, according to a college official.
ACICS pulled accreditation for Virginia College and several Brightwood campuses a day before the operator announced its closure, citing concerns over “student progress, outcomes, student satisfaction, certification and licensure, and staff turnover.”
In October, ECA had attempted to avoid bankruptcy by filing lawsuit in a federal district court against the Education Department and DeVos that has since been tossed out. The complaint requested the Ed Department to appoint a receiver to oversee its assets while it restructured and completed teach-outs at some of its campuses so it could retain access to federal student aid. According to the lawsuit, ECA had generally stopped making payments on its debts and faced evictions on some campuses due to a financial squeeze from declining enrollment.
The abrupt closure sparked criticism.
“Sudden closures are the worst moments for our sector,” wrote Steve Gunderson, president and CEO of Career Education Colleges and Universities, in an emailed statement to Education Dive. “They provide no time for students to transfer; and no time for staff to prepare. Thoughtful planning and communications can avoid such challenges."
Before ECA’s closure announcement, both Virginia College and Brightwood had attempted to find new accreditors. The Accrediting Council for Continuing Education and Training denied Virginia College’s application because of its poor student outcomes and high faculty turnover, and the agency deferred a decision on Brightwood until this month.
Florida Technical College
The for-profit Florida Technical College has six locations across the state that enrolled nearly 4,000 undergraduate students last fall. In February, the Florida Technical College became an academic arm of National University College, which is accredited by the Middle States Commission on Higher Education, though it retained its ACICS accreditation.
Increased scrutiny over the for-profit sector has dealt a major blow to such colleges in Florida. More than 100 for-profits in the state closed between 2014 and 2017, and enrollment at such schools dropped from 380,000 in 2010 to 221,000 in 2017, according to the Sun-Sentinel.
In January, the college reached an agreement with the Justice Department to settle a lawsuit for $600,000 that alleged college employees falsified student documents to get more federal financial aid, the Miami Herald reported. The U.S. Attorney's Office for the Southern District of Florida stated Cutler Bay, Florida, campus employees submitted documents that indicated 27 students had graduated from high school or had an equivalent program when they had not.
The for-profit college, which enrolled nearly 2,000 students across its seven campuses in the fall of 2017, has had a spate of closures in recent years. It finished teach-outs at two of its locations earlier this year and has closed most of its campuses.
The college took a financial hit in recent years when it agreed in 2015 to pay $1.2 million in restitution to 3,500 former students and forgive $11 million in student debt in order to settle a consumer protection lawsuit, the Lexington Herald-Leader reported. The lawsuit, brought by the state attorney general, alleged the college misled its students about their ability to transfer credits to other colleges, hired unqualified faculty and staff, and accepted students who failed the Daymar's admissions test.
The college had been seeking a new accreditor since the end of 2016, but stated in February in a letter to students that it would be forced to close if it didn't find one by mid-June. DeVos temporarily restored federal recognition of ACICS in April against the recommendations of her own staff ahead of that deadline.
Art Institute of Las Vegas
Of 31 Art Institute campuses across the U.S. listed online, the only remaining ACICS-accredited branch not publicly slated for closure is the Las Vegas location. The Fort Lauderdale, Florida, Indianapolis and Phoenix branches are still with ACICS but are no longer accepting new students.
In March 2017, the nonprofit Dream Center Foundation bought 31 Art Institute campuses from the now-bankrupt Education Management Corporation — previously one of the largest for-profit operators — and converted them into a body of nonprofit schools. Some have been critical of such conversions, however, saying they let for-profits avoid regulation in the sector by operating under the guise of a nonprofit.
In July, the Dream Center announced it would shut down 18 Art Institute campuses, citing declining enrollment and more demand for online learning programs. The Dream Center offered a 50% tuition discount to students who will graduate before the campuses close in December and a $5,000 grant for students who transferred to a partner institution, The Mercury News reported.
The for-profit college had fewer than 200 enrolled students at its main campus in West Jordan, Utah, and less than 100 at its entertainment arts college in Salt Lake City during the fall 2017 semester.
It is one of the entities affiliated with the Terry Myhre family, which also ran for-profits Globe University and the Minnesota School of Business until both shuttered after the Ed Department cut off their federal aid following a ruling by a district court judge in September 2016 that they used fraudulent marketing and recruiting practices.
Globe University looked like it would make a comeback last year after Broadview received permission from the Ed Department to reopen four of Globe's former campuses in Wisconsin. Broadview quickly reversed course, however, issuing an announcement that it would close three of the former Globe locations citing "the low unemployment rate and unique challenges in higher education," Inside Higher Ed reported. The remaining campus, in Madison, Wisconsin, is listed as closed by the Education Department.
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