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Practically all the school problems described in these articles, in fact, developed at accredited schools.

The basic problem: industry accrediting groups are neither inclined nor properly equipped to act as policemen despite the regulatory responsibilities they've had delegated to them. "Accreditation," said William A. Fowler, National Home Study Council executive director, "is not really designed for day-by-day enforcement of individual rules."

"We would rather be helping schools to upgrade their programs," explained Dana Hart, executive secretary of the Association of Independent Colleges and Schools' accrediting panel, "than telling them what not to do."

To consumers and other outsiders, a school either is or isn't accredited. From the vantage point of the accreditors, however, matters are less clear-cut.

Stipulations Apply

Bernard H. Ehrlich, counsel for both the home-study and trade-and-technical groups, said many schools are accredited "with stipulations" conditions, based on sometimes serious deficiencies, which they are told they must satisfy to stay accredited. "If you try to explain this to the public," Ehrlich insisted, "how would the public understand?"

All three groups have procedures, both formal and informal, for handling problems that arise with accredited schools. If a complaint from a student or one of the school's competitors seems minor, an accrediting-group official may try to work things out with a phone call or letter. When the problem appears serious, particularly when the Office of Education wants action, the accrediting commission may launch a formal and confidential investigation.

Investigations typically include inspecting the problem school with a team comprising officials from other schools and an accrediting group rep. resentative. Depending on the team's makeup and other circumstances, such inspections may be searching or superficial.

A federal official who accompanied one National Home Study Council team's visit to a problem school on the West Coast last year reported finding the team inadequately briefed on what to look for, one member arriving hours late, the school's required self-evaluation report "totally inadequate." and the inspection's five-hour duration insufficient.

Many months may elapse from the time an accrediting commission launches an investigation until its final decision to withdraw a school's accreditation. The Home Study Councils commission, for example, decided to investigate Technical Education Corp. in May, 1973, after learning from the Office of Education-which had sus

pended insuring its students' loans that the St. Louis school was in trouble.

Inspection Team

But commission procedures allowed Technical Education time to prepare and submit its self-evaluation report and pay the inspection fee. Hence, the inspection team's visit wasn't scheduled until October.

It was too late. The day before the visit, Fowler recalled, the Home Study Council got a phone call from St. Louis: Technical Education - out of cash

had collapsed. (Two days later, at a hastily called meeting, the accrediting commission accepted the school's resignation from accreditation to prevent further, delays in decisionmaking.)

At least the home study accreditors' investigatory wheels had been turning. Wilham A. Goddard, executive director of the trade and technical schools association which also accredited Technical Education, said he hadn't been aware that the school was in trouble before it closed.

"The last financial statement we got from them was not the strongest," Goddard said, "but it indicated the school would last... This was one of the schools we thought we knew."

The three accrediting groups, while relied on by the Office of Education to regulate their schools, are nonetheless private agencies subject to all sorts of legal constraints. This was dramatized four years ago when Macmillan, Inc. (then Crowell Collier and Macmillan) sued the Home Study Council.

The giant publishing concern claimed that the council had violated due process by denying reaccreditation to its six correspondence schools-among them LaSalle Extension Universityand by publicizing the denial. Macmillian also challenged the Office of Education for rceognizing and delegating duties to a trade association.

The case was settled out of court. Macmillan set about upgrading its educational programs, while the Home Study Council agreed to continue the schools' accreditation and revise its own procedures. Though the council and its accreditors were thus spared prohibitive legal costs, the public lost a chance for court rulings on some basic issues.

Macmillan Suit

The Macmillan suit, other legal challenges to accreditation and pressure from the Office of Education led all three accrediting groups to build more due process into their decision-making. They developed provisions for school owners to respond to charges, for hearings, for appeals-and for bans on pub. licity until a final decision to withdraw a school's accreditation.

These provisions, as followed today, tend to protect school owners from illconsidered decisions, protect accrediting groups from more frequent law. suits, protect the Office of Education's continued reliance on private accreditation and leave student consumers

more in the dark than ever. over longer periods of time, about serious school problems.

"If we were free from legal liabili ty," said Richard A. Fulton, executive director of the Independent Colleges and Schools Association, "we would be delighted to run up the flag and say we're investigating the problems of X, Y and Z schools." Fulton conceded. however, that his group has never sought such immunity.

Even when an accrediting body does withdraw a school's accreditation, it holds publicity about the decision to a minimum. "It's not up to us," Fulton insisted, "to put the scarlet letter on the forehead of a school."

Often schools which have their ac creditation withdrawn have already gone out of business anyway. Opinions differ on whether withdrawal can be atal to those still operating, but cer tainly schools heavily dependent on federal student aid are hard hit when withdrawal costs them their eligibility. In any event, accreditors generally appear more inclined to prod away at a school in hopes it will eventually clean itself up, than to use their ultimate weapon and kick it out of the club.

If the accrediting groups could be more aggressive in protecting the consumer, so could the Office of Education. In its statutory role of "recognizing" individual accrediting groups, the Office of Education occasionally has shown as much tolerance toward their shortcomings as they have shown toward accredited schools.

The federal agency's accreditation staff, while well-intentioned, is short of people and overwhelmed with paper. work. It must screen applications for initial or renewed recognition, provide staff services to a committee advising the education commissioner, and try as best it can to monitor some 50 recog. nized accrediting bodies.

Handling Complaints

Practical necessity, then, as well as legislative authority has led staff director John R. Proffitt and his aides to depend heavily on the accrediting groups to handle complaints against individual schools and enforce standards generally.

While the Office of Education has prodded an accrediting group to remedy lapses in performance-such as a serious conflict-of-interest episode in the Association of Independent Col. leges and Schools-its dependence is such that it has never used its power to revoke a group's recognition.

One well-versed critic has called this symbiotic relationship an "unholy mar. riage, dangerous to both parties, failing adequately to protect the public and student interest while endangering the independence of accrediting agen


Down the hall from Proffitt's staff. the Division of Insured Loans has also mixed good intentions with mediocre performance in protecting student borrowers. Division officials have become increasingly concerned over the past

three years about accredited profitseeking schools which have abused the insured-loan program at students' expense.

At the outset. these officials understood that so long as the schools kept their accreditation they remained necessarily eligible for insured loans. To remedy that, Congress in 1972 gave the Office of Education authority to audit schools and to limit, suspend or revoke their insured-loan eligibility.

Yet nearly two years later the Of fice of Education still hasn't published the regulations required to exercise that authority.

Suspended Insurance

Meanwhile, federal officials have resorted to several ad hoc devices to curb predatory recruiting. wrongful withholding of refunds or other school abuses. For one, they have suspended some schools' authority to make insured loans to their own students.

For another, they have gone further and suspended insurance on loans from any lender for students at a given school. Intended to force the school owner to clean up his operations, this device in some cases has dried up the school's cash flow and driven it out of business-stranding students with unfinished educations and no hope of refunds, yet still with loans to repay.

According to Technical Education's Johnson, it was the Office of Education's suspension of loan insurance which "broke us."

Federal insured-loan officials had a more promising approach going for awhile. When a school's recruiting tactics aroused suspicion, they would send questionnaires to individual student loan applicants the school was enrolling. In numerous cases, the applicants, if they replied at all, proved ineligible, unaware that they would be going into debt, or misinformed about their eventual repayment obligations. Many would cancel their loan applications and pull out of the school.

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Office of Education's insured loans division said his staff was working on a fresh questionnaire and would seek proper clearance to use it. More than six months later, that project was still hanging fire.

For their part, various spokesmen for the profit-seeking school industry criticized the Office of Education for being inconsistent, confusing, uncommunicative or even devious-as when, they assert, loan applications submitted for insurance approval mysteriously "get lost in the computer."

Elsewhere in the government, the Federal Trade Commission has been relatively aggressive in policing the school industry. Two years ago, after extensive hearings, the FTC laid down "industry guides" defining what it considered unfair or deceptive in advertising, recruiting and related school practices. About the same time, it issued proposed complaints against some industry giants-Lear Siegler, Control Data and Electronic Computer Programming Institute.

Last August, the FTC launched a nationwide media campaign to help consumers recognize and escape school abuses. And in hopes of laying out further rules-on refund policies for example-it has continued investigating industry problems.

Still/ when it comes to enforcement activity, the FTC's investigations have been necessarily tedious, its proceedings ponderous, and its penalties limited. While its case against Lear Siegler is still pending, for example, the company for unrelated reasons, officials say-has nearly finished selling off all its schools.

The Veterans Administration, responsible for the multibillion-dollar GI Bill program, is required by statute to delegate most supervisory duties to "state approval agencies"-which vary considerably in staffing, other re sources and diligence.

While VA supervises as well as subsidizes these state-level surrogates, and spot-checks schools to some extent it, self. there is little evidence that "Approved for Veterans" protects com sumers any better than accreditation.

State governments, for their part, have school licensing or approving agencies of their own. They, too, and whatever laws they have to enforce, are a study in contrasts. Some states, like Florida and Texas, aroused by past profit-school scandals, provide relatively effective regulation. Others such as California have laws flawed by loopholes, and still others have practically no regulation at all.

The Education Commission of the States sponsored a task force's development of model state legislation last year. It hoped to encourage a more even and effective level of state-by state regulation. But Indiana's Joseph A. Clark, who heads the new National Association of State Administrators and Supervisors of Private Schools, said his group would come up with a different and better bil.

Regulatory Crazy Quilt with Washington Post interviews federal, state and accrediting-group officials throughout the existing regulatory crazy quilt repeatedly encountered disagreements, distrust and m tual criticism: Office of Education officials who look down on VA's state ap proving agencies, FTC officials who find the Office of Education paperbound and lethargic, state officials who scorn the accrediting groups while resenting FTC incursions on states' rights, accrediting officials who consider the Office of Education incon sistent or indecisive, and the like.

Such discord, among people supposi edly sharing to some degree the same broad objectives-good schools, satisfied students and well-spent tax money -dramatize the political obstacles to improving the system.

Improvements, however, are badly needed. While specific remedies are open to debate, the general needs include these:

A far higher priority, among all concerned, for protecting student con


More aggressive, methodical moni toring of school marketing practices, financial stability and other matters in which consumers have a stake.

• More timely and effective enforcement of government regulations and accrediting standards-and in the case of the accrediting commissions, open rather than secret proceedings.

• For correspondence schools, a requirement that GI Bill bènefits be spent on educational essentials rather than extravagant color television sets and other window-dressing.

• And for the insured loan program, relief from debts when student borrowers have been defrauded or shortchanged.

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By Douglas Chevalier-The Washington Post

John R. Proffitt: a heavy dependence on accrediting groups.

Senator PELL. Now, before getting into these questions of abuse, we want to find out what the system is. I want to educate myself and my colleagues a little more on it.

As I understand it, accreditation has traditionally been used as a measure of the educational quality of an institution.

Now, do you feel that as an adequate basis for eligibility of Federal programs that quality alone be thought about, or should other factors, such as fiscal stability, or responsibility be cranked into the judgement on an equal basis?

Mr. HERRELL. Let me ask Mr. Proffitt to answer that, Senator Pell. He is directly involved with this particular subject.

Senator PELL. The question I am talking about is: should an institution, when it is on its last legs, and about to collapse, be permitted to enroll students under Federal assistance programs when it realizes those students probably will not be able to finish out the year?

Mr. PROFFITT. Senator, this is a point that is really very central to many of our problems. I think you have identified a very important issue here.

The matter of fiscal stability of institutions is reviewed by all accrediting agencies that do accomplish institutional as opposed to programmatic education. We try to keep track ourselves of any rumors or rumbles or earthquake vibrations regarding fiscal stability of institutions.

We often pick up soundwaves directly through our own sources. We often pick them up from the accrediting agencies. When we pick them up from channels outside of the accrediting mechanism, we then contact the accrediting agency involved to see if they have heard of the same kind of problems.

So fiscal stability, financial viability, is very much in the picture. The problem here is that an institution's financial distress is not presently a cause for our being able to terminate the eligibility for funding participation of that institution. Rather, eligibility is contingent upon an institutions accredited status, and OE cannot withdraw eligibility until the accrediting agency gives notice of having removed the accredited status of the institutions.

Now, of course, once that takes place, and there is a procedure that the accrediting agencies have to move within, which usually takes longer than we would like to see of it, but once the accrediting agency does act, then the institution will close its doors and go out of business generally.

What often also happens is that once the institution which is in financial trouble becomes aware that both the Office of Education and the accrediting agency knows of this matter, they will then close their doors and often walk off with whatever assets they have in their pocket.

What would be very needed here would be something which we do not have, and that is direct Federal ability to address this matter directly, rather than necessarily going through the accrediting agencies.

Senator PELL. I think you already have this authority for the guaranteed student loan program. Under section 438, Public Law 92-318, the commissioner is authorized to issue such regulations as may be necessary to provide for fiscal audit of an eligible institution, the establishment of reasonable standards and financial responsibility,

and the appropriate institutional capability, and elimination and suspension of eligibility under this part of any otherwise eligible institution.

You do have this authority for guaranteed student loan.

Mr. PROFFITT. Yes, sir. Those regulations should, as Mr. Herrell mentioned, receive their first publication within the next 30 days. What we have under consideration is the possibility for broadening that ability so that we can apply it to other funding programs as

far as student aid is concerned.

Senator PELL. Is that not rather a long time? It has been more than 2 years since this law was passed.

Mr. HERRELL. Mr. Chairman, as you know, the Education Amendments of 1972 was a massive piece of legislation, which included a section requiring that regulations be forwarded to the respective committees for all programs in the Office of Education.

So it was our determination that it would be better to get the regulations out for those programs for which money was made available, and put this one in lower priority, not that it was not Mr. HERRELL. As we indicated in the letter to Senator Brooke, that had to be done during this period of time.

It is quite true that we are late, and for that I apologize.

Senator PELL. Because this is one that would protect both students and the taxpayers and the Government, which I think is just as much of a priority as getting the money out, because it provides for the protection of the students.

Would you like to see this regulation, or this section of law enlarged to include all the programs? I should think that would be helpful.

Mr. HERRELL. As we indicated in the letter to Senator Brooke, that was one of the legislative areas which should be considered, whether to broaden the existing authority to limit, suspend, or terminate eligibility of a participating school in the guaranteed student loan program to encompass other Federal aid programs.

The question, Senator, is one whether or not we want the Office of Education to become a regulatory agency, and that is the question that has to be answered, because as you know, under the General Education Provisions Act we cannot interfere with the administration, et cetera, of education institutions.

I think that these recommendations that are going to be sent up in reference to 438 (a), the guaranteed loan program, will be very controversial, and there will be a lot of comment. We intend to have a series of meetings throughout the country during the 45-day-comment period.

Senator PELL. Right. I appreciate that.

My own reaction, or view, is that after we have had these hearings, with the conclusions that are being derived from them, we ought to crank this authority up to a wider basis for all the Government student aid programs, in the next rerun of higher education, which, alas, is coming on in a year. So we will try to enlarge it then.

What role did OE play in the development of the consumerprotection regulations concerning proprietary schools that the FTC recently circulated?

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