Managing Institutional Closure: The Role of States in Connecting Systems to Protect Students – New America and NGA
The State Role in Institutional Closures and Accountability
The existing higher education accountability system is comprised of state oversight, accrediting agencies, and the U.S. Department of Education. In this so-called “triad,” states are responsible for authorizing institutions to operate and providing consumer protection to students. Accrediting agencies are charged with assuring the quality of institutions, while the U.S. Department of Education certifies institutional eligibility for federal aid. The state role in the triad is foundational because institutions must obtain state authorization prior to seeking accreditation or federal aid eligibility.8 Notably, a considerable number of non-degreegranting institutions enroll students without accreditation or federal aid.9
The variety of authorization and oversight standards across states is substantial. Authorization boards are typically housed in the state’s higher education executive office (commonly known as “SHEEOs”), and board composition is usually laid out in statute.10 Oversight for postsecondary institutions also connects to other mechanisms of state authority including workforce training processes, veterans program approval, occupational licensure, and non-degree private institution recognition. This complex system of oversight connects a web of federal programs and consumer protection. While SHEEO agencies often sit at the nexus of these authorities, the closure of an institution requires coordination and alignment across a variety of state boards and agencies.