Wednesday, August 01, 2007

Is Accreditation Legal?

By Richard Vedder

Yesterday I opined that if colleges were subject to the same rules that private businesses were, organizations like NACUBO (the National Association of College and University Business Officers) might face serious problems from the Department of Justice under federal anti-trust laws. Higher education is a big club, and us university folks love to get together and compare notes --which in a purely competitive environment is frowned upon as an attempt to restrain competition.

Under aspect of the "club" dimension of higher education is accreditation. Where else in American life would you bring employees of your competitors on campus to tell you if you can continue in business? That, roughly, is what goes on with accreditation. Is accreditation a cartel or a quality control mechanism? Or, more accurately, is it a cartel pretending to be a quality control device? Is a regional accreditor like, for example, the North Central Association, more like the Consumers Union or like OPEC?

Today's INSIDE HIGHER ED speaks of the sale of Touro International University (the on-line entity of Touro College) to a private equity firm. It notes correctly this is continuing a trend of small liberal arts colleges selling, in some cases just on-line operations, to for-profits. The Bridgepoint Education purchase of a Francisan college in Iowa and making it into Ashford University is a case of point, as is Randy Best's purchase of small Catholic liberal arts college in Illinois. (Full disclosure: I have received income as a consultant from two of these operations in the past, although am not doing so now.)

Why are the for profits buying marginal small liberal arts colleges? They are mainly interested in buying accreditation. Because the barriers to entry imposed by accreditation are high, entrepreneurs will pay literally millions to leapfrog over most of this hurdle. Yet as our friend Judith Eaton, Mother Superior of the Accreditation Cartel (CHEA) acknowledges, sale of a university typically triggers new reviews, etc., of an institution. Several for profit entrepreneurs I know bitterly complain about the negative effects that accreditation has. The lack of a national accreditation agency raises costs --satisfying North Central does not necessarily satisfy accrediting bodies serving the south, northeast or west, for example. There is an anti for-profit bias detected by others. The notion that competitors (those who make up accrediting teams) can decide whether you can remain or enter the business is the antithesis of comepetive free market capitalism, and points to the need for reform.

For these reasons and more, the American Enterprise Institute, with whom I am affiliated, is planning a conference (in cooperation with CCAP) on accreditation at AEI's Washington headquarters on Septmeber 21. It should be a lively dialogue. Several outspoken advocates on different sides of this issue will speak, ranging from Judith Eaton to Charles Miller, chair of the Spellings Commission. Attendance is free --and includes a lunch (maybe there is such a thing as a free lunch afterall).

6 comments:

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TC said...

I believe there needs to be one national accreditation body to insure that colleges and universities meet specified qualitative and quantitative standards for providing an education. (My gosh! Would this mean that schools would held accountable for performance to measureable standards?)

With that being said, accreditation criteria must be documented and apply to not-for-profit schools as well as for-profit schools. If there is no documented criteria for entreprenuers, investors would probably be hesitant to develop for-profit schools because it is my opinion that they would consider accreditation as a confirmation that gives the for-profit school legitimacy.

So if the accrediting body for not-for-profit schools refuses to change their ways, you can bet that for-profit schools will assemble their own accrediting body -- so whoever does the accrediting now, better come around or they will be marginalised.

Finally; How much does accreditation mean to companies that employ college students upon graduation? The answer is nothing. I have never been asked by any company that I have worked for if the university I attended was accredited.

Additionally, When I entered the MBA program at Pepperdine, I didn't know it was not accredited, but I still received tuition reimbursement from the company I worked for at the time.

James said...

Higher education is a big club, and us university folks love to get together and compare notes --which in a purely competitive environment is frowned upon as an attempt to restrain competition... The notion that competitors (those who make up accrediting teams) can decide whether you can remain or enter the business is the antithesis of comepetive free market capitalism, and points to the need for reform.

The purpose of accreditation should be to ensure that a BA from one institution means roughly the same thing as a BA from another institution. This is a legitimate regulatory function, even if it is a "cartel" that somehow "restrains competition." The bar for accreditation should be high, and if that shuts out fly-by-night for profits, tough.

James said...

How much does accreditation mean to companies that employ college students upon graduation? The answer is nothing. I have never been asked by any company that I have worked for if the university I attended was accredited.

It should mean something to them. Employees with degrees from diploma mills pose a significant liability risk to a company (see http://www.usatoday.com/money/workplace/2003-09-28-fakedegrees_x.htm).

The government definitely cares, as does any company that hires people with security clearances.

http://www.gao.gov/new.items/d04771t.pdf

TC said...

Hi James,

I understand what you are saying,and agree that employers should take stock in accreditation. However, my view of things are somewhat different from yours - but not by much.

I stand by my original comment: It is a fact that I have never been asked if the university I attended was accredited, nor have I ever been asked to present my diploma. This could be because the three companies I worked for checked to make sure I received a diploma and checked to see whether or not the university I attended was accredited. It is also quite possible that when they saw that I went to the best damn university in the country, they knew it had to be accredited.

It is my view that diploma mills and accreditation are two different subjects - apples and oranges if you will. My rationale is that I don't believe a diploma mill could ever receive accreditation - unless the accrediting agency is some sort of dubious clearing house. I glanced over the first source you cited and would tend to agree with the comments posted. I was unable to connect to the second source you provided.

Now for my editorial comments: I believe the majority of our government that holds a college diploma, got it from a diploma mill. The reason I believe this is because their childish behavior and failure to serve the interests of any of their constituents makes me wonder if they had to burn down their high school to graduate. They are worthless in my opinion.

Jimmy said...

TC, you are an idiot. Pepperdine's Graziadio School of Business is accredited by AACSB, the same accreditation agency that gives business schools such as Harvard, Stanford, U Penn, their accreditation