Local: Education

Higher education is a government-created cartel

|
Beltway Confidential,Education,Conn Carroll,Government,Analysis

On Monday, after reporting on the closure of an online community college partnership, I tweeted the story to Slate’s Matt Yglesias, hoping he might recognize higher education accreditation as one of those areas where an economic policy idea can “transfer economic resources from a privileged minority to the masses.”

Matt thoughtfully and politely replied: “Sounds bad. Note that accrediting organizations aren’t proper regulators at all — hyper-empowered private cartel enforcers.”

And Matt is right. Higher education accreditation entities “aren’t proper regulators” per se. They are not federal government entities and they are not subject to the Administrative Procedures Act. But, who exactly did “hyper-empower” these accreditation agencies to become “private cartel enforcers”?

The federal government, that is who.

When they were first founded around the turn of the century, accreditation entities, like the North Central Association, were purely voluntary efforts to establish uniform standards across higher education and improve academic quality.

But all that began to change when the federal government began to foot the bill for more and more of higher education spending.

Today, the Department of Education has deputized eight regional accreditation entities that serve as gate keepers for the entire higher education industry. If you are not approved by one of the Department of Education approved eight regional accreditation agencies, then none of your students can qualify for Pell grants or federally subsidized student loans. With the federal government alone pumping almost $30 billion into higher education every year, if a school is not approved by a regional accreditor, it is essentially dead.

The government-created accreditation cartel is one of the biggest reasons why college costs continue to rise and there is very little innovation in the higher education industry. It is no accident that the Fortune 500 company list from 1983 looks nothing like it does today, but the US News College Rankings have been virtually unchanged since they began in 1983.

View article comments Leave a comment