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.
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