Senator PELL. Our next witness is Dr. Harold Orlans, senior research associate, National Academy of Public Administration Foundation.

STATEMENT OF HAROLD ORLANS, SENIOR RESEARCH ASSOCIATE, NATIONAL ACADEMY OF PUBLIC ADMINISTRATION FOUNDATION

Mr. ORLANS. I have a brief statement, Mr. Chairman, and then I will be glad to answer any questions that I can.

The Commissioner's obligation to recognize certain accrediting agencies as "reliable authority" on the quality of training was imposed by the Congress in 1952 in an effort to protect veterans against predatory proprietary schools.

However, accreditation is neither a necessary nor a sufficient condition of a school's approval for veterans. Many unaccredited schools are also approved and both accredited and unaccredited schools must observe a host of regulations and recordkeeping requirements enforced by State inspectors.

Accredited schools may gain a certain competitive advantage by employing their own refund policy whereas unaccredited schools must adopt stricter pro rate refunds.

The system of veterans' course approvals is administered by State agencies at an annual cost of over $10 million. Inspections are concentrated on short-term "clock hour" courses offered by vocational and proprietary schools rather than on academic and professional courses offered for credit by colleges and universities.

Accreditation is more important in establishing the eligibility of schools for insured student loans, for two reasons:

1. Only accredited proprietary schools can now participate in this program with a few exceptions; unaccredited proprietary schools are ineligible though unaccredited public vocational schools and unaccredited colleges may be able to qualify.

2. Since the Office of Education does not, like the veterans' State approving agencies, determine the eligibility of individual schools, it has relied heavily on recognized accrediting agencies to make these determinations.

The Office has thus given some private agencies monopolistic power to confer and withdraw eligibility for federally insured loans. In exchange, it has sought to regulate their operations to conform to its changing ideas of the public interest.

Many agencies are happy with this situation; others fear that Government regulation can lead to Government control and to political interference with their standards and decisions.

Over 50 accrediting agencies are now recognized by the Commissioner of Education, including some 7 for whom recognition is purely honorific and serves no eligibility function.

To gain or maintain recognition, each must apply at least once every 4 years and demonstrate its compliance with a set of broad criteria.

Since few agencies comply fully with all criteria, each is potentially vulnerable to charges of noncompliance. The Commissioner may investigate such charges at any time, whether brought to his attention by his staff, by schools which have been denied accreditation, by rival accrediting agencies or educational factions, by Congressmen, or by other critics of agency actions and inaction.

The Commissioner's power of recognition gives him great potential power over agency affairs.

Though application for recognition is voluntary, its benefits are such that no recognized agency has thus far declined to apply for renewed recognition.

However, the Commissioner is also heavily dependent upon recognized agencies, especially those which accredit proprietary schools, because he has no independent means to establish school eligibility.

Though many agencies have been denied recognition, none has yet had its recognition withdrawn, for if recognition were withdrawn from an agency accrediting many schools, an outcry could be expected from the schools who would suddenly be rendered ineligible for insured loans and other programs.

The great advantage of accreditation is that, since it represents an action of private citizens undertaken at the supposedly voluntary request of an institution, it puts on public record a judgment of ostensible educational quality that no Government body dares to make. It divides the universe of educational institutions into two parts the accredited, which is formally found to meet minimal standards, and the unaccredited, which may or may not meet them.

The question is moot until a school applies for, and is denied, accreditation. A year or two later, it becomes moot again, because much can happen in a year.

Since accreditation is renewed every 5 or 10 or 15 years, it is seldom current, and we cannot be certain if the current quality of any institution is the same as it was 5 or 10 years ago, when it was last examined and granted accreditation.

About 90 percent of higher educational institutions or some 2,430 out of 2,700 are accredited or preaccredited, but only 20 percent of proprietary schools or 1,600 to 1,700 out of 10,000.

Therefore, accreditation is virtually redundant for degree-granting institutions, especially the larger colleges and universities of 787 enrolling 2,500 or more students, only five were not accredited or preaccredited in 1972. However, it is a great practical convenience to any program seeking an inexpensive way to reduce the number of eligible proprietary schools below the number legally authorized to operate.

Indeed, it is almost the only available means of doing so without incurring the large costs of independently inspecting all 10,000 or more schools.

The use of accreditation to establish eligibility for Federal programs strengthens the influence of private educational forces and maintains a private counterweight to what would otherwise be an exclusively governmental system of eligibility determination. And

the use of accreditation is politically expedient, gaining the good will and support of powerful educational, professional and business interests.

Unfortunately, it also brings in its train a number of disadvantages. Institutional accreditation is a fallible and intermittent judgment. Some accredited institutions are of poor quality and probity; they may be on confidential probation; and they offer many programs which professional associations consider substandard and have not accredited.

Accredited colleges and proprietary schools have been involved in misleading and meretricious educational, recruiting and financial practices; accredited correspondence and proprietary schools have been named in many Federal Trade Commission orders seeking to protect students from fraudulent and deceitful business practices; and a good case can be made for extending FTC regulatory powers to nonprofit and public institutions guilty of similar abuses.

Contrariwise, a number of good and useful schools remain unaccredited by choice or necessity, because there is no suitable agency in their field or they do not wish to meet certain standards that can be irrelevant to the purposes of a Federal program-as, for example, a religious seminary, technical institute, or business school may not wish to offer liberal arts courses necessary for regional accreditation. The maintenance by the Commissioner of Education of a list of recognized accrediting agencies has required continued Government scrutiny of agency operations.

On the one hand, this has given the Office of Education an uncomfortable power over these agencies; on the other, it has led the office to put excessive and unrealistic reliance upon them to enforce Government policies, to police member schools, and even to withdraw eligibility via the withdrawal of accreditation, rather than through direct Government action.

The financial importance of eligibility has influenced accreditation judgment and impaired the voluntary nature of accrediting.

Many authorities no longer use the word "voluntary" with regard to accreditation, but speak to it rather as a quasi-governmental or quasi-public activity.

On balance, I believe it is in the interest, both of the public and of accrediting agencies, to reduce the formal reliance now placed on accreditation in eligibility determinations.

As a first step, the exclusive reliance on accreditation as the only means by which proprietary schools can qualify for insured student loans should be ended.

The Office of Education should act independently to disqualify any school which violates the objectives of the loan program. OE should issue, and with the assistance of State authorities enforce any regulations that are needed to accomplish this.

If misleading advertising serves to exploit students it should be made grounds for suspending eligibility. If pro rata tuition refunds and the posting of bond protect a student's rights and the public's funds they should become conditions of eligibility.

It is foolhardy for a Government agency to rely solely on accreditation to render a school eligible or to withdraw its eligibility. No matter how admirable and effective an accrediting agency may be, its purposes differ from those of the Government.

Relying upon accrediting agencies to enforce public policies is an abdication of the Government's direct responsibility to protect the public interest.

Senator PELL. Thank you.

In connection with this statement, "as a first step, the exclusive reliance on accreditation as the only means by which proprietary schools can qualify for insured student loans should be ended."

You do not mean insured student loans. You mean all Government assistance programs, basic education opportunity grants? Mr. ORLANS. Yes.

Senator PELL. The whole gamut.

In simple terms, as I understand it, your view is that accreditation has been overly utilized by the Federal Government as a crutch on which we should not be leaning quite so hard, is that basically it? Mr. ORLANS. Yes.

Senator PELL. You suggested an alternative to accreditation for proprietary schools in order to establish eligibility.

I was wondering if you could give us an enlargement, expansion on your idea so that Committee might be in a better position to follow up on it?

Mr. ORLANS. Well, there are, as I see it, only two practical alternatives.

One, as Mr. Proffitt mentioned, would be to expand the authority of State agencies, which they now have under the Mondale Amendment for public vocational schools.

As the bill was originally drafted, I gather, it contained that authority. But the word "private" was deleted at the last minute.

The other alternative, I and some colleagues have suggested in a report, would be to establish a special private agency which would review useful unaccredited schools, and at the request of the Commissioner, or any other Federal official, make requisite determinations that would be used for eligibility purposes.

Senator PELL. I think, in this regard, as you know, the Mondale Amendment, when it left the Senate, covered both public and private institutions.

Mr. ORLANS. Yes.

Senator PELL. But, as a result of the conference, it wound up covering just public institutions.

Mr. ORLANS. Of course, it is convenient to use the States, but it is also unfair to good schools in States which are not approved.

The other objection in giving States this authority is that ultimately we could expect that the population of eligible schools would be identical with the population of licensed schools.

So you have a prospect of 10,000 eligible schools. Ten thousand is a putative figure.

The schools come and go. The turnover in some fields may be 15, 20 percent a year.

If any licensed school in a given State is eligible, we may expect an immediate migration of proprietors from neighboring States. There is at present a very active migration of proprietary schools, and this would only enhance the likelihood of it.

So, you end up over a period of time, as increasing members of States are recognized, with a larger and larger number of eligible proprietary schools.

I think that, as many of these schools are bound to be derelict, regardless of how they become eligible, you will come back inevitably to something like the veterans' State approving agency, or some other system of independent examination, of independent regulations for the admission and removal of schools.

Senator PELL. Do you think that the standards over the last 30 years, say, have gradually gone down, the degrees?

For instance, for the Ph. D. 30 years ago, you had to know two foreign languages and presumably have published work.

Mr. ORLANS. Now, you do not even have to know English.

Senator PELL. What is the reason for this gradual drop, do you think?

Mr. ORLANS. In England, in Europe, where they supposedly have quite high standards, there have been comparable developments.

Senator PELL. What is your view with regard to the external degree programs, such as Nova University?

Mr. ORLANS. Well, I do not want to say anything about Nova. Indeed, I may have a conflict of interest there, as my former boss, George Graham, is actively involved with the Nova program in public administration. I have the highest regard for him.

He was good enough to chair the department of politics at Princeton for many years, and I assume that he has not lowered his standards at Nova.

But I do think that the external degree is a very dangerous degree, and I will be glad to send you a paper in which I develop that, which I will be giving at the American Council on Education meeting in October.

Senator PELL. I would be very interested, because I have read both sides of this discussion.

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