Institutions Subject to Adverse Actions Have Opportunity to Change Accreditors Under the Department’s New Rule – Powers Pyles Sutter & Verville PC
The loss of institutional accreditation is often a death knell for Title IV eligible institutions because most institutions enroll a substantial number of students who depend on Title IV funds to finance their educations. With its recent revisions to 34 C.F.R. § 600.11 published on November 1, 2019, the U.S. Department of Education may have provided a life line. The Department’s new rules allow institutions that are or have been subject to an adverse action by their current accrediting agency to change accreditors or maintain accreditation by more than one institutional accreditor.
Under the current rule, an institution seeking to change accrediting agencies or maintain multiple accrediting agencies must demonstrate reasonable cause for the change. Moreover, an institution is not considered eligible for the Title IV programs within 24 months of having its accreditation withdrawn, revoked, or otherwise terminated for cause, or having withdrawn voluntarily from its accreditation status under a show-cause or suspension order.
As amended, the new rule allows the Department discretion to determine the institution has reasonable cause to obtain accreditation during the 24 month window even if the institution has been subject to one of these adverse actions. For example, the rule allows the Department to determine that reasonable cause exists for a change in accreditors if the accrediting agency did not provide the institution due process or applied its standards inconsistently, or if the adverse action was the result of an agency’s failure to respect the institution’s mission, including a religious mission.