Minnesota attorney general wants for-profit college accreditor's authority revoked

In a letter to U.S. Education Secretary John King, Swanson and attorneys general from 11 other states say the Accrediting Council for Independent Colleges and Schools, or ACICS, is unfit to oversee higher education institutions and that the government should revoke its accreditor status that is up for renewal.

"ACICS' accreditation failures are both systemic and extreme," the letter says. "Its decisions to accredit low-quality for-profit schools have ruined the lives of hundreds of thousands of vulnerable students whom it was charged to protect." The move comes as the for-profit higher education industry is under intense scrutiny nationwide, including here in Minnesota. In a 2014 lawsuit that went to trial last week, Swanson alleges two ACICS accredited schools, Globe University and the Minnesota School of Business, inflated the value of the degrees they offered to students.

School leaders and attorneys for the two Minnesota colleges have denied those allegations and were unavailable Monday to discuss their institutions' accreditor. ACICS representatives did not return a request for comment.

Steve Gunderson, president and CEO of the Association of Private Sector Colleges and Universities, or APSCU, called the letter politically motivated and said problems at public and nonprofit colleges and universities have not drawn the same attention from state attorneys general. APSCU is a for-profit education advocate.

"As an organization, APSCU has never asked an accreditor to make a political decision regarding an institution of higher education's accreditation," Gunderson said in a statement. "We won't. And neither should politically motivated Democrat attorneys general."

Accrediting agencies are responsible for ensuring that colleges and universities offer quality educational programs and degrees. Most public and nonprofit institutions are regionally accredited and most for-profit schools are nationally accredited.

The letter calling for ACICS to lose its oversight powers said that "even in the crowded field of accrediting failures" the organization stood out. The schools accredited by ACICS have low graduation rates, high student loan defaults and have been sued or investigated by many states for compliance problems, the letter said.

The attorneys general also question whether ACICS has a conflict of interest in allowing representatives of the schools they accredit to serve on the organization's boards and committees. Jeanne Herrmann, chief operating officer of Globe University and the Minnesota School of Business, served as chair of the ACICS board of commissioners in 2015.

Critics of for-profit colleges argue many of the schools' degree programs are more expensive but less valuable than degrees from their public and nonprofit counterparts. For-profit schools nationwide have been investigated and faced lawsuits for providing inaccurate information to students about course credit transferability and job-placement rates.

In the civil case against Globe and the Minnesota School of Business, Swanson alleges the schools purposely lied to students, telling them the schools' law enforcement programs would qualify them for careers as police and probation officers.

Attorneys for the two schools denied the allegations and said any misinformation prospective students might have received came from a handful of rogue employees who were not following school policies. The schools' representatives say most students are happy with the training they received.

Globe and Minnesota School of Business are among 21 campuses in Minnesota that are accredited by ACICS. The organization also oversees ITT Technical Institute and Le Cordon Bleu College of Culinary Arts, according to the organization's website. ACICS was also the accreditor for the now-defunct Corinthian Colleges chain. Those schools were purchased last year by the Zenith Education Group, a nonprofit with ties to Oakdale-based Education Credit Management Corp., or ECMC, a student loan collection agency.

Corinthian went up for sale after the U.S. Department of Education alleged the schools made false claims similar to those Globe and the Minnesota School of Business is accused of making. Corinthian agreed to the sale after the school's 56 campuses nationwide had their access to federal student loans suspended, putting the colleges in financial jeopardy.

A 2014 report from the U.S. Senate found for-profit schools are heavily dependent on federal student loans with 15 publicly traded education companies receiving 85 percent of their revenues from federal aid in 2009. Another 13 percent of those firms' revenues came from state aid dollars, the report found.

If ACICS' accrediting status is revoked when it comes up for review in June, the more than 900 schools it oversees could lose access to federal student loans.