Improving Accreditation Part II: A Tiered Approach to Bridge Divides

Yesterday, Ed Central started its series on improving accreditation by looking at the critiques of accreditation and the dynamics that make reform difficult. Today’s post suggests reform options to move toward consensus changes.

Accreditation is constantly criticized from different sides for being both too lenient in removing actors, too strict in letting in new providers, and operating in a way that is both burdensome for schools but shrouded and secrecy for the general public.

That’s a tall order for reform. Fortunately, changes to the incentive structure around accreditation could help solve all these issues.

In particular, it’s time to change the incentives around the federal financial aid programs. Right now, these operate in a binary manner. For students, it’s an entitlement—they are guaranteed dollars as long as they meet minimal requirements. The same holds for institutions—once they can get into the accreditation system they receive the same set of benefits as all other accredited institutions.

A binary system in a diverse world

This simple in or out system is a great feature for students, maximizing choice and making benefits easily portable (if only the same could be said of the credits they earn). But the binary structure creates significant challenges for accreditation and accountability. For accreditors, the all or nothing nature of federal aid approval means their only real course of sanctions for problematic actors is a de facto death blow: the removal of access to all forms of federal aid. The possible punishment is so onerous that only the most absolutely egregious cases prompt accreditation removal. And when that does occur it tends to be around financial issues, which are easier to document and are usually paired with things like enrollment decreases. This gives accreditors an essentially end-of-life role, stepping in to shut down a school when it is already in a downward enrollment and financial spiral.

Unfortunately, there’s no good way for accreditors to change this dynamic. Let’s say that tomorrow an accreditor decided it wanted to place a much greater emphasis on learning outcomes measurement. What can it offer schools to make it worth their while? It can’t reduce burden on them. It can’t offer additional benefits like access to more aid, longer approval periods or anything else. Needless to say, an offer of more burden for nothing in return isn’t going to fly with most schools.

There’s no incentive for institutions to demand a different system either. Since accreditation brings with it the same access to federal aid regardless of agency, the only difference colleges care about is the potential to earn regional accreditation. And even that’s largely because regional status is seen as more prestigious and may make credit transfer slightly easier.

Introducing variations in financial aid eligibility

Getting accreditors and institutions to focus more on quality requires greater variety both within the accreditation system’s options for approval and among accreditation agencies themselves. Doing so would properly reorient incentives, rewarding colleges and accreditors that are serious about focusing on quality.

The best way to do this would be to move toward a tiered system of accreditation, including with respect to federal student aid. Creating multiple levels makes it possible for accrediting agencies to move institutions up or down depending on their performance, creating an intermediate set of rewards (or penalties) that could lessen the initial risk of allowing in new actors and the challenges of easing underperforming providers out of the system.

A tiered accreditation system for financial aid should be built around the idea that these benefits carry differing levels of risk. For example, misspent Pell Grants represent a lost opportunity for students in terms of foregone time and potentially using some of their lifetime eligibility, but do not present lasting costs. By contrast, poorly used loan dollars stick with students for years after they leave school.

So what would a tiered system actually look like? The entry level would allow access to limited amounts of federal grant aid on a reimbursement-only basis based upon learning accumulation. Withholding funds from providers until they show success with students would shift a lot of the initial risk away from the federal government, making it easier to allow in new providers. As providers demonstrate greater capabilities, accreditors could slowly move them up to another level where increasingly more grant aid is delivered upfront, with lesser amounts held for reimbursement only. Eventually, a provider would be able to receive grant aid on a typical disbursement schedule.

It is only once we are comfortable with a provider’s success using grant aid that loan dollars should enter the picture. As with grant funds, the initial amount of available dollars should be lower so that students cannot take on too much risk. This system could also encourage sensible lending policies by requiring institutions to share in a small share of default costs—such as 5 to 10 percent, with the amount decreasing based upon results. This small risk sharing would give institutions a stake in loan dollars the way lenders used to in the old bank-based federal student loan system.

It’s unrealistic that the top level of performance would entail changes to the student aid programs that make them more generous than they currently are. So the absolute best performers should receive greater flexibility within the accreditation process itself. This could take a few different forms, but the most logical options would be to either allow institutions to go longer than 10 years in between reaccreditation or dramatically shorten what accreditors will investigate for these schools. For example, a top performer could worry only about learning and not have to deal with lengthy reports on facilities or faculty.

Moving to this tiered system should help both the consumer protection and innovation camps. Intermediate penalties present options for holding poor performers accountable that accreditors might actually be willing to use. And the lesser risk on the front end in the form of reimbursement-only compensation could allow accreditors to lower the barrier to entry.

This revised system would have significant benefits for institutions too. The highest-performing institutions should see a great reduction in burden and increase in freedom. And even all but the worst schools should face fewer unnecessary elements in their reviews so that the work they put in is at least better tied to their core missions of teaching and learning.

Multiple levels of accreditation agency approval

Reforming accreditation also requires more granularity in the way agencies are approved, especially by giving greater benefits and flexibility to accreditors willing to focus more on learning outcomes and quality.

Multiple levels of accreditor approval could be done in one of two ways. The first would be a form of voluntary flexibility. Accreditors would be asked to submit proposals for how they would place a greater focus on academic quality and outcomes in their reviews and also dedicate more resources toward investigating lower-performing colleges. In exchange, they would propose areas they would exclude from reviews of colleges and procedures for conducting lighter-touch reviews of higher quality institutions. The advantage of this approach is it both defers to the accreditors for ideas and encourages the best colleges to push for this type of reform.

The alternative way to change the accreditor incentive structure would be start giving them different levels of approval. In this case, accreditors would be looked at both for how well they pay attention to quality and learning outcomes but also their willingness to consider creative new models of teaching and learning. Agencies that are strong on both measures would gain the authority to approve colleges for longer periods of time, consider different criteria in reviewing institutions, or make other changes to their business model. In this case, the Department would set the standards for what’s considered a quality accreditor and the benefits that accompany earning such a designation.

Conclusion

Accreditors have a distinct advantage in the quality assurance system. Their ability to rely on professors and experienced higher education professionals through peer review and the time to do in-depth investigations puts them in a better place to assess teaching and learning than any other outside entity. Unfortunately, the current incentive structure for accreditors does not properly encourage them to take advantage of this time and experience to conduct meaningful oversight and reviews. Changing that requires establishing a new set of incentives.

But reforming the existing accreditation system is really only the first step in making our national system of postsecondary quality assurance work. An entrenched process can only be pushed so far and so any attempts at radical innovation in this space will require a new set of regulatory mechanisms. In our next post, we’ll lay out just how such a system could be constructed.