For-profit college accrediting agency is stripped of authority

The agency that accredited the now-shuttered Wright Career College and ITT Technical Institute campuses got the ax from the U.S. Department of Education this week.

The Accrediting Council for Independent Colleges and Schools — the largest accrediting agency of for-profit colleges and universities has been stripped of its authority. The move could prove to be a final blow to for-profit colleges. ACICS will appeal the action.

In a letter to ACICS, Emma Vadehra, chief of staff to the education secretary, wrote, “I am terminating the department’s recognition of ACICS as a national recognized accrediting agency.” She said too that “ACICS’s track record does not inspire confidence that it can address all of the problems effectively.”

The federal government has been on a mission to put a stop to fraudulent, deceptive and abusive practices reported against for-profit schools and in June a federal panel voted to shut down ACICS, which had been accused of shoddy oversight of the educational institutions it accredited. Among them also was Corinthian Colleges.

US News & World Reports reported that ACICS oversees about 725 institutions and last year oversaw $3.3 billion in federal financial aid.

State and federal education officials have said that students at ACICS-accredited schools graduate at particularly low rates, and they often can’t pay off the burdensome debt acquired with the promise of adequate employment after graduation.

Earlier this month, the ITT Tech campuses in Overland Park and Kansas City closed permanently along with all other ITT schools.

In April, the Overland Park-based Wright Career College filed for bankruptcy and closed campuses here and in four other cities. The initial filing estimated liabilities of between $1 million and $10 million and estimated the number of creditors at between 1,000 and 5,000.

Wright Career College, which was a nonprofit school, was among the long list of colleges accredited by ACICS that have collapsed in recent years, leaving thousands of students without degree completion and drowning in student loan debt.

Wright Career College primarily trained students for jobs as medical assistants, accountants and other business occupations. It was founded in 1921 to train typists and was originally known as Dickinson Business School. It moved from Lenexa to Overland Park in 1997.

In 2013, students and former students filed a lawsuit against Mission Group Kansas Inc., which did business as Wright Career College. The federal court suit accused the school of fraud and misrepresentation.

A year later, the suit was amended to add 195 students and former students from the defunct school’s five campuses. The suit contends, among other things, that Wright “purposefully enticed prospective students to enroll and apply for student loans they cannot pay back through a systematic, deceptive marketing scheme” conducted through publication and television advertisements and school enrollment advisers.

Wright officials have denied those allegations, and the suit is still pending.

This story was originally published September 23, 2016 at 2:14 PM with the headline "For-profit college accrediting agency is stripped of authority."