We write to request you immediately rescind the issuance of a civil investigative demand to the Accrediting Council for Independent Colleges and Schools (ACICS) and halt any other planned investigatory actions regarding accreditors or the accreditation of institutions of higher education. This action is an unprecedented overreach by the Consumer Financial Protection Bureau (CFPB) and raises serious concerns regarding jurisdiction given the CFPB’s limited enforcement authority that does not in any way include the higher education accreditation process.
Institutions are eligible to participate in federal student aid programs authorized by Title IV of the Higher Education Act if they are (1) accredited by an accrediting agency recognized by the Department of Education; (2) authorized to operate by a state; and (3) certified as eligible by the Department of Education. Accreditors review the quality of the education or training provided by institutions to ensure federal funds flow to institutions that meet or exceed the agency’s standards of accreditation. These accreditors have no experience, expertise, or purview with regard to any financial product or financial service that may or may not be offered by an institution of higher education. They also do not offer any consumer financial product that would trigger the jurisdiction of the CFPB.
Furthermore, an accreditation review of an institution has no direct and immediate impact on the financial activity of a consumer with an institution. Receiving accreditation by an accreditor recognized by the Department of Education affirms an institution offers education or training that meets a standard of quality sufficient to provide eligible students enrolled at the institution access to federal aid. However, given that a consumer eligible to receive federal student aid has the option of choosing from over 6,000 institutions of higher education, it by no means forces or coerces a consumer toward a particular institution.
Under the Higher Education Act, Congress has set up a robust process for the Department of Education to recognize accrediting agencies. Led solely by the Department of Education, this process ensures only those accrediting agencies that act as a reliable authority of educational quality and meet the required criteria laid out in the law are recognized by the Secretary. Federal law is clear about the role and responsibilities of accrediting agencies, as well as the role and responsibilities the Department of Education plays in recognizing accrediting agencies. Nowhere does the law authorize a role or responsibility for the CFPB.
To read the full letter to Director Cordray, click here.
