Further Evidence That Higher Education Accreditation Is a Cartel

Accreditors serve as key gatekeepers in higher education. Without accreditation, a college’s students are not eligible to receive federal financial aid such as Pell grants and federal student loans. This gives accreditors a fairly unique role in allocating federal spending—these private entities decide whether taxpayer dollars will flow to a college. Given that the public has bestowed this power upon accreditors, it is vital to ensure that accreditation functions in the public interest.

Unfortunately, my past research highlights five areas where accreditation fails (and also offers some suggestions about what to do about it). One of those failures is that accreditation functions much like a cartel.

“Accreditation is a cartel” is obviously a contested claim, but the evidence just keeps pointing in the affirmative direction. For starters, very few colleges lose accreditation, and very few new colleges obtain accreditation. This suggests that accreditors have different standards for existing colleges (low standards) and new colleges (high standards), which is exactly what you would expect from a cartel that tries to protect incumbents and erect barriers to entry to prevent new competition.

Thanks to a 2019 change in regulation, there is a new indicator that accreditation is a cartel. Prior to 2019, regional accreditors could not compete against each other because each was restricted to a few states where they had a legally enforced quasi-monopoly. (A few national accreditors do exist, hence the “quasi” qualifier on monopoly; however, the regionals are the dominant players, and they were barred from competing.) In 2019, the legally enforced quasi-monopolies were abolished, allowing regional accreditors to compete with each other for the first time.

If the regional accreditors were not operating as a cartel, then we would expect the 2019 change to have ushered in a wave of new competition as the former quasi-monopolies competed amongst themselves for market share and high-status colleges.

That is not what happened.

[Related: “The Failure of Higher Ed Accreditation”]

Instead, the regional accreditors almost entirely avoided stepping on each other’s turf—behavior that is consistent with the cartel model. Does the Higher Learning Commission, which historically was the regional accreditor for 19 states including Indiana, Ohio, and West Virginia really think that higher education is so different in neighboring Kentucky that they have nothing to offer? As another example of avoiding competition, consider a recent story by Emma Whitford in Inside Higher Ed, which shows that one of the regional accreditors, the New England Commission of Higher Education (NECHE), is preemptively ruling out competing with another regional accreditor:

A bill currently sits on Florida governor Ron DeSantis’s desk that would require public institutions in the state to switch accreditors at the end of each cycle, which typically lasts five to 10 years. If the bill is signed and implemented, all Florida institutions will be seeking a new accrediting agency within the next decade.

Yet the leader of NECHE had this to say about the possibility of accrediting Florida colleges:

“We have no interest in having someone join us for a moment,” he said. “We would not have interest in pursuing any of those Florida publics that are being forced to make these moves.”

Such a statement is easy to understand if accreditation is a cartel. First, NECHE doesn’t want to step on the turf of Florida’s regional accreditor since that would signal to other regional accreditors that they can poach NECHE colleges. Second, NECHE recognizes that the Florida bill undermines the very foundations of the cartel by forcing competition rather than just allowing it. A cartel can survive a de jure competitive landscape if they can avoid de facto competition out of inertia or collusion. But a cartel has a much harder time surviving if members are forced to compete with each other.

NECHE’s position makes little sense outside of the cartel model. What organization wouldn’t welcome the opportunity to serve new (and fast-growing customers), even if only for a five- to ten-year term? These are organizations that claim a single site visit lasting several days is sufficient to evaluate an entire college offering hundreds of different educational programs and thousands of courses, and yet a ten-year contract is too short for them to even consider?

In accounting, it is common to impose term limits, forcing a switch in accountants every so often to reduce opportunities for fraud and embezzlement. Accounting firms don’t shun such opportunities. Accreditors do shun such opportunities, and the leading explanation for why is that accreditation is a cartel.


Image: Rock Staar, Public Domain

Andrew Gillen

Andrew Gillen is a Senior Policy Analyst at the Texas Public Policy Foundation.

4 thoughts on “Further Evidence That Higher Education Accreditation Is a Cartel

  1. Accrediting agencies indeed hold to their territories and out of each other’s. There is some sense to geographic borders, I guess in terms of convenience. I have served on several Middle States reviews since that is where I was employed.
    But there is no academic or evaluative rationale for geographic accreditors since the academic variability of higher Ed institutions does not vary between regions but inside them.
    What does vary between regions is culture and politics. This could be used to justify regional accreditation.
    However, my problem with accreditation of all sorts (institutional and disciplinary) is that generally reinforces status quo through standardization, favors existing schools and thereby does not support the kinds of change that higher Ed needs to meet quickly changing societal needs. Such things as standardized curricula, Carnegie unit requirements (recall the Carnegie unit was created to measure faculty workload and pensions and has nothing to do with learning), admissions processes, graduation requirements that discourage collaboration at any level, and career prep are left to the needs of the 20th century. Accreditation stultifies change whether you call it a cartel a monopoly or a bureaucratic hoop.

    1. The rationale is that there 12 judicial circuits whose decisions often conflict until SCOTUS resolves it. Worse the OCR regional offices follow the circuits-in open defiance of each othes.

  2. ABET accreditation (for engineering degree programs) has always been a joke. Faculty cherry-pick student exams and homework programs to support the claim that the course evaluates specific outcomes and the students were, surprise, suprise, suprise, hugely successful in meeting those outcomes. The ABET accreditors that show up to evaluate your program are themselves often faculty. They don’t want to grade too harshly because 5 years down the road those faculty may now be evaluating you. Everybody passes the accreditation process.

    1. The problem is that the accreditation process was never intended to have the meaning it does today.

      Starting with the AAU, they were voluntary associations largely dealing with marketing, prestige, and mutual respect. The AAU sought to have the European universities respect their new PhD programs. The regionals then arose largely to evaluate secondary schools for abilies of their graduates.

      The GI Bill was intended to be a one-time thing, hence the existing accreditation system was used to justify reciept of Federal funds.

      The Higher Ed Act arrived 20 years and that’s when everything changed. Members of the club keep their membership but no one else is allowed in.

      Recently this has gotten political with accreditation used to bully conservative & religious IHEs. Betsy DeVos tried to address this by permitting choice in accreditation, but what is really needed are new accreditors.

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