Asleep at the Seal

Just how bad does a college have to be to lose accreditation?

Southeastern University had the saddest bookstore you’ll ever see.

It was more of a walk-in closet, really, a tiny space off the lobby of the university’s one and only building. When I walked through the bookstore doorway last May, the shelves were half bare, haphazardly stocked with Kleenex and sundries, introductory business textbooks, and, inexplicably, two brand-new copies of William T. Vollmann’s sprawling 2005 novel, Europe Central.

I left without buying anything and wandered down a nearby hallway, which was filled with the kind of notices and advertisements (“Roommate needed—no smokers or pets!”) found on college walls everywhere. But on closer inspection, some of the notices seemed strange. “Listing of Classes Without an Instructor,” one said, followed by a lengthy roster of courses like “Principles of Accounting” and “Health Services Information Systems.” Oddly, it didn’t suggest that the classes had been canceled due to the lack of someone to teach them. It was more, “Hey, FYI.”

After further wandering, I was drawn back to the closet-cum-bookstore. There was a small stack of T-shirts in one corner, along with hats, bags, and paperweights, all bearing the university’s official seal. “Chartered by the Congress of the United States,” the seal proclaimed, in circumnavigational text, along with a bid for age-based gravitas: “1879.” I bought a paperweight—$1.99, on sale—and dropped it into my bag before walking across the lobby to a kiosk under a sign that said “Admissions.”

“I’m interested in university course offerings,” I said to the woman behind the counter. “Do you have a catalog?”

“I’m not allowed to give out that information,” she replied.

“But the sign says ‘Admissions.’”

“I know. But we’re not allowed to give it out. Everything’s on hold right now. Because of the, you know, the situation.”

There was an aura of gloom in the squat, deteriorating building on the fenced-in corner lot that comprised the beginning and the end of the Southeastern campus in Washington, D.C. And for good reason: the university was about to be shut down. Two months earlier, the Middle States Association of Colleges and Schools had decided to revoke the school’s accreditation. Because only accredited schools can accept federal financial aid, upon which the large majority of Southeastern students depended, the decision amounted to a death sentence for the beleaguered college.

But the fact that this had happened was less surprising than the fact that it hadn’t happened sooner. Southeastern had lived for many years on the most distant margins of higher education, mired in obscurity, mediocrity, cronyism, and intermittent corruption. Students routinely dropped out and defaulted on their student loans while the small, nonselective school lurched from one financial crisis to another. Yet during all that time Southeastern enjoyed the goldest of gold approval seals: “regional” accreditation, the very same mark of quality granted to Ivy League universities including Princeton, Columbia, Penn, and Cornell, along with world-famous research institutions like Georgetown University, which sits in wealth and splendor above the Potomac River just a few miles away.

The decades-long saga of Southeastern’s perpetual dysfunction and ultimate demise exposes a gaping hole in America’s system of consumer protection for higher education. The government exercises remarkably little oversight over the colleges and universities into which hundreds of billions of taxpayer dollars are poured every year, relying instead on a tissue-thin layer of regulation at the hands of accreditors that are funded and operated by the colleges themselves. The result is chronic failure at hundreds of colleges nationwide, obscure and nonselective institutions where low-income and minority students are more likely to end up with backbreaking student-loan debt than a college degree. The accreditation system is most egregiously failing the students who most need a watchdog looking out for their interests. The case of Southeastern shows how.

Middle States is one of six regional accreditors created in the late nineteenth and early twentieth centuries. Although the organizations have come to serve as the arbiters of legitimacy in American higher education, accreditors began as small clubs, collegial and essentially secretive organizations. In many respects, they remain so today. Middle States—which controls the mid-Atlantic, stretching from Maryland to New York—was formed in 1887 as a typical special interest group, founded by a small band of Pennsylvania college officials who joined forces to lobby the state legislature with the goal of not having to pay property taxes.

The following decades were a time of expansion and confusion in higher education. More students were enrolling in college, and new, sometimes dubious institutions were springing up. Standards for admission and credit transfer were chaotic. Worried that the government might step in to impose order, Middle States and its peers decided to do the job themselves by defining what exactly it meant to be an institution of higher learning. In 1919, Middle States created the Commission on Higher Education to set standards for the accreditation of colleges in its region. In the beginning, the requirements were straightforward: a university needed at least eight professors, a half-million-dollar endowment, certain required courses in the liberal arts, and so on.

But setting standards was the easy part. Enforcing them was something else. Middle States was, and is, a voluntary association with no direct authority over its members. In 1933, the Commission on Higher Education responded to various scandals and outrages associated with intercollegiate athletics by banning athletic scholarships. Colleges cheerfully filled out forms swearing compliance while continuing to hand out money to star tailbacks. Embarrassed, the commission caved. “Although in the face of manifest opposition we are unable to enforce the rule,” said the commission chairman, they still believed that “no college that grants athletic scholarships is worthy of a place on our accredited list.” Athletic scholarships continued, as did related outrages.

It was a stark lesson in the regulatory limits of the accreditors, which shared a basic flaw with the bond rating agencies that recently helped bring the global economy to the brink of ruin: they were nongovernmental and financially beholden to the organizations they were supposed to evaluate with a gimlet eye. When push came to shove, they didn’t shove. They also had relatively few resources, relying on dues from members who, once they gained entrance to the club, had little interest in paying outsiders to ask hard questions. As a result, the commission shifted over time from sending inspectors to requiring self-study, aided by volunteers from other colleges. After duly peering inward, most colleges reported excellent findings. Their colleagues from other schools, mindful that they would eventually be on the other side of the table, tended not to question their peers’ upbeat assessments.

If the world had stayed as it was in the 1930s, none of this would have mattered much. But the economic and social changes of the postwar era brought an explosion of new students to higher education. Long-established elite colleges were somewhat reluctant to enroll them—University of Chicago President Robert Hutchins famously warned that the G.I. Bill would turn colleges like his into “educational hobo jungles”—and many of the new students enrolled in branch campuses, engineering schools, teachers colleges, and technical institutes instead. Setting universal standards (e.g., “eight professors”) that would accommodate both an Ivy League university and the tech school up the street was next to impossible.

In the end, the accreditors simply begged off the task and allowed colleges to establish, within broad guidelines, the standards against which they would measure themselves. Middle States, for example, has an “Admissions and Retention” standard requiring that a college “seeks to admit students whose interests, goals, and abilities are congruent with its mission and seeks to retain them through the pursuit of the students’ educational goals.” But this is only a standard in the loosest sense of the word: concepts like “interests,” “goals,” “abilities,” “congruent,” and “mission” are left to the college to define. And it only has to seek to retain students. If it fails most of the time, as many colleges do, it doesn’t lose accreditation.

The other crucial change of the accreditation system took place from the early 1950s to the early ’70s, when Congress began spending hundreds of millions of dollars on student financial aid through grants and federally guaranteed loans. The money necessarily came with strings attached—students couldn’t be allowed to give their grants to just anyone. But rather than have the government evaluate colleges for fitness to receive public money, Congress outsourced the task to the accreditors: accredited schools could get federal aid, and unaccredited schools couldn’t. Accreditors became the de facto regulators of an academic landscape that more closely resembled an industry, and a complicated one at that.

Before the advent of federal financial aid, schools that did things like teach night classes for adults in business and accounting had no need for accreditation—they had no aspirations of joining the tony college club. But by the mid-1970s, accreditation had come to mean evaluating yourself against standards of your own choosing in order to indirectly receive large amounts of free government money. Unsurprisingly, a lot of the unaccredited colleges decided to take that deal. One of them was Southeastern.

By 1977, when Middle States granted Southeastern the same accreditation status enjoyed by half the Ivy League, the school had been in operation for ninety-eight years. Within a few years of Middle States bestowing its seal on Southeastern, however, the school was giving its accreditor cause to regret doing so.

In 1981, the university fired its comptroller after an audit found she had diverted $100,000 in university funds to a local culinary school, of which the president of Southeastern was a trustee. A year later, more than 25 percent of Southeastern’s students were defaulting on their federal loans, prompting a sanction from the U.S. Department of Education. In 1983, the university’s business manager was fired after he and his wife were accused of stealing more than half a million dollars by overcharging the university for services paid to shell companies they secretly owned. (The manager pled guilty two years later.)

By 1987, Southeastern’s loan default rate had ballooned to 42 percent, compared to a national average of less than 18 percent. Whatever value students were getting from their degrees in the job market, it wasn’t enough to pay back loans for Southeastern’s private school tuition, leaving students with ruined credit ratings and the taxpayers on the hook for unpaid loans. As a result, the feds temporarily cut the university off from federal loan funds in 1989. Enrollment declined from 1,800 students to barely 500 in the early ’90s, and the Department of Education threatened the university with a $3.6 million fine for failing to properly account for aid funds.

But because it had ceded most of its regulatory authority to the accreditors, the federal government could only do so much—as long as Southeastern remained accredited, the government had to keep cutting the checks. And Middle States had little appetite for tough sanctions. Throughout the 1980s and ’90s, it periodically put Southeastern on various forms of probation and encouraged it to improve via sternly worded letters. But none of that was publicized to students, who continued to enroll and borrow every year.

It wasn’t until 2003 that Middle States finally began demanding that Southeastern address its declining enrollment and deteriorating bottom line. By then, the situation had become too dire for the accreditor to ignore. Southeastern had shown some fledgling signs of improvement in the late ’90s, when President Charlene Drew Jarvis, a PhD neuropsychologist and the daughter of Charles Drew, the famed African American doctor and blood-bank pioneer, had aggressively recruited new students to staunch declining enrollment and negotiated down the school’s outstanding federal fine. But Jarvis’s gains were largely erased after the September 11 attacks, to which the federal government had responded with a broad clampdown on foreign student visas. Students from overseas, particularly Asia, had long been an important part of Southeastern’s enrollment, as had its computer science program. The one-two punch of 9/11 and the dot-com bust sent enrollment falling. Southeastern responded by moving the majority of its classes online to cut costs. But this was illegal (although the law that made it so has since been repealed), and the feds levied another multimillion-dollar fine.

Still, it took five more years of laborious process and epistolary back-and-forth before Middle States put Southeastern on notice that it was in imminent danger of losing accreditation. Meanwhile, the university tried to keep up appearances. Its Web site prominently featured a picture of President Jarvis in full academic regalia, clasping hands with then Senator Barack Obama. “We are inspired by this exploration of our potential,” said Jarvis, in response to a list of failures published by Middle States. Early in January 2009, the university enrolled a fresh batch of students, many of whom paid with federally backed student loans.

It came as shock to most of them when, on March 6, 2009, Middle States sent Jarvis a letter informing her that the Commission on Higher Education had finally decided to revoke the university’s accreditation. (Jarvis resigned soon thereafter.) Accreditation decisions are usually written in impenetrable jargon, but the March 6th letter featured the kind of candor generally used to describe a broken relationship that is unlikely to be repaired.

Southeastern was spending more on fund-raising than it was receiving in donations, the accreditor noted. The school’s graduation rate was a paltry 14 percent. Overall student pass rates on six exams administered through an allied health program were, respectively, 0, 0, 0, 16, 33, and 40 percent. The university had only six full-time faculty for more than thirty academic programs. Not courses—programs. One of the six was also the registrar. Middle States “found no evidence that students have knowledge, skills, and competencies consistent with institutional and appropriate higher education goals.”

The letter is proof that accreditation standards do exist; despite the wide latitude institutions receive to define and evaluate their own success, it is possible to be bad enough long enough to lose accreditation. But Southeastern also illustrates just how low those standards are and how long they can be defied. Given the university’s multidecade history of loan defaults, financial struggles, and scandal, it’s fair to assume that similar letters could have been written years before.

Why, then, did Middle States wait so long to pull the plug? Surprisingly, the accreditor provided an entirely plausible answer at the end of the letter: “Ever since Southeastern University’s initial accreditation … in 1977, the Commission has recognized the University’s mission of serving diverse and underserved student populations. It is largely as a consequence of this recognition that the Commission has been so forbearing in its actions to date.”

It was a masterpiece of perverse logic. Of all students, those from diverse and underserved backgrounds are most in need of a high-quality college education. They live at the margins of economic opportunity and often attend substandard K–12 schools. They are at the greatest risk of dropping out and are least likely to have social networks and college-educated parents who can help them evaluate institutional quality. Nobody needs the protection of a strong regulatory body more. And yet Middle States lowered its standards for Southeastern to near-subterranean levels precisely because the university served vulnerable students.

And Southeastern is not alone. At more than 200 two- and four-year colleges, the Department of Education revealed in December 2009, at least 30 percent of students default on their loans within three years. Longer-term default rates are substantially higher. Graduation failure rates in the lower echelons of higher education are similarly bad—over 250 four-year colleges reported graduating fewer than one-third of their students in 2008. Students enrolling at these colleges are disproportionately from low-income and minority backgrounds. At many, students are more likely to end up with a crippling financial liability than with a college degree. (Unlike credit cards and other debts, student loans are very difficult to discharge in bankruptcy.) And every single one of those colleges was accredited when those students enrolled.

How the accreditors have failed is easy enough to understand. Commissions like Middle States have no actual regulatory authority and only one tool—de-accreditation—to compel compliance by delinquent schools. Once the federal government handed accreditors the keys to the financial aid kingdom, de-accreditation amounted to a financial death penalty, a sentence that accreditors, who are primarily made up of current and former university officials, are loath to administer. As a result, accreditors rarely step in before universities are already beyond redemption; they often end up doing little more than standing next to the financial abyss and giving the occasional bankrupt institution a nudge on its way over the cliff. This happens so rarely that when I spoke with Jarvis recently, she seemed surprised that Middle States had brought down the hammer on Southeastern at all. “The accreditors used to say, ‘We’re your colleagues, we’re here to help you,’” she said. “They’re becoming regulators now.” Emilia Butu, a former professor of computer science at Southeastern, told me, “I had a colleague who had worked at Southeastern for over thirty years, and she told me there were times in the 1980s and 1990s when the university was actually in much worse shape than it was in 2009 when Middle States finally revoked accreditation. She liked to quote one of the former Southeastern presidents, who said, ‘Nobody can kill an institution of higher education.’”

For the last half century, the nation has used a mild process of collegial peer review and self-study to accomplish a hard-nosed regulatory task. It hasn’t worked. To be sure, regional accreditors are less lenient than they used to be. But there are still thirty-seven accredited four-year colleges in the mid-Atlantic region alone that graduate less than one-third of their minority students. And there is no way to know how or why those colleges managed to assert that such catastrophic failure rates satisfy accreditation standards. When I asked Middle States for a copy of Southeastern’s self-evaluations—reports submitted in order to receive millions of taxpayer dollars—I was told that the defunct university’s records were unavailable, for “privacy” reasons.

Students and universities alike would be better off if accreditors stuck to what they’re good at while the government protects the public interest. Congress should create a single regulatory agency with the authority to audit and examine the financial status of institutions, much as the Securities and Exchange Commission can examine publicly traded corporations. The agency would work aggressively with law enforcement to clamp down on diploma mills and other forms of higher education fraud. It would also work with higher education representatives to develop a suite of common student learning measures that institutions could, voluntarily, use to report their success.

In making accreditation decisions, the agency would put a premium on results, not process. It would provide a quicker path to accreditation for the most promising new higher education providers, and have a much faster process for revoking accreditation. Failure would not be tolerated for decades, as it was at Southeastern and continues to be elsewhere. College inspection results would be published, quickly and clearly, on a Web site specifically designed for students and parents choosing which college to attend.

Creating a real regulatory body to oversee colleges and universities would free regional accreditors to return to their original purpose: establishing authentic standards of excellence in higher education and providing high-quality peer review. Middle States and its peers were founded on the conviction that a college education means something—and, as such, doesn’t mean just anything. It’s a worthy idea that was effectively abandoned when accreditors agreed to become the gatekeepers of federal funds. Affixing the same mark of quality to Southeastern and Princeton is absurd. Accreditors should be in the business of creating high, aspirational standards of excellence, not legal minimums that inevitably became minimal. Voluntary peer review is a terrible way to regulate, but an excellent way for like-minded institutions to help one another strive for greatness. That’s what the regional accreditors were all about, once, and where they should return.

Southeastern held a final summer session in 2009 to help remaining students finish their degrees. The nearby University of the District of Columbia (which has had its own troubles graduating students over the years) announced that it would accept Southeastern credits in transfer; Trinity Washington University, a private college that serves many D.C. residents, also stepped up to the plate. Students attempting to bring their credits elsewhere were frequently refused.

The final class of Southeastern students reacted to the shutdown with a mix of anger and resignation. “I lost $1,300 because one of the classes I took couldn’t transfer,” e-mailed a student who enrolled for the first time in January 2009, only to leave three months later when he learned of the accreditation problem. Another sent me an e-mail with this account:

 All I have received to date regarding the accreditation debacle is a series of emails. Initially we were told that they were shutting down online courses due to issues with the accreditation. Based on what I was told at the time, it didn’t seem like this would be a long term problem, just a short term issue. If I had known that this was coming I would have accelerated my studies to graduate before this mess took place. Now I find myself in a situation where I only need four courses to graduate but I may have to start all over someplace else. In addition, I am out thousands of dollars in loans that I have to repay for an education that, on paper, is worth nothing.

On August 31, 2009, Southeastern finally lost the accreditation it had clung to, barely, for thirty-two years. The students and faculty dispersed, and the tiny campus sits empty today. In December, the university’s few remaining assets—the building, the student records, and materials associated with the degree programs—were absorbed by the Graduate School, a thriving continuing education program that was associated with the U.S. Department of Agriculture until last year. Southeastern itself seems destined to fade into memory. The picture of President Obama has disappeared from the Web site, which now simply says, “We are not accepting students at this time.”

Kevin Carey

Kevin Carey directs the Education Policy Program at the New America Foundation.