The Inmates Running the Asylum?
the traditional bias against for-profits was not insurmountable. When accreditors were first given their gatekeeper role, there were some “vocational, unaccredited schools for which there were no accrediting associations… [so] governmental officials had encouraged their development. For example, William Goddard, an owner of several well-known profit-making schools, organized the National Association of Trade and Technical Schools after such encouragement.”112
Those days are long past however. The combinations of misbehavior by some schools (especially for-
profits), and the shift towards an emphasis on compliance in accreditation reviews have created a hostile environment for new colleges. Many now argue that “the existing accrediting regime… hinders new insti- tutions from entering and innovating”113 and “educational innovators say the process is inflexible and discourages creative approaches.”114 Accreditation now functions as a barrier to entry, keeping new insti- tutions with innovative ideas from participating in the field.
Part of the problem is a “built-in catch-22 for innovators and entrepreneurs — you can’t be accredited (get access to public money) until you have proved yourself in advance. You can’t prove yourself in
a d v a n c e — p r o s p e c t i v e l y — u n l e s s y o u a r e a c c r e d i t e d . ” 1 1 5
The difficulty of obtaining accreditation for a new
institution has led many for-profit companies to buy struggling not-profit colleges just to inherit their accreditation. Entrepreneur Michael Clifford has suggested that regional accreditation has a fair market value of around $10 million to an acquirer, as that is the amount that it would take to start a regionally
a c c r e d i t e d c o l l e g e , a “ p r o c e s s t h a t c o u l d t a k e u p t o t e n y e a r s a n d h a s o n l y a 5 0 - 5 0 c h a n c e o f s u c c e s s . ” 1 1 6
But even supposing the barrier to entry issue was resolved, there would still be a major problem. Accreditation focuses so heavily on inputs and processes that even if new institutions were allowed to enter the field, they would be severely restricted in terms of what they could actually do. The system has evolved in such a way that it largely prescribes what inputs institutions should use and how they should use them. In other words, accreditors, while tasked with certifying the ends, have instead mandated the means to be used while almost completely ignoring the ends. But if the inputs that must be used and the way in which they are used are predetermined, that severely restricts the ability of new colleges to innovate. This “severely limits the advancement of new models of higher education” leading one observer to conclude that “accreditation today is the biggest barrier to innovation and change in higher education.”117
Consider, for example, the case of StraighterLine, a company that offers a number of introductory courses. The company has an innovative business model that hosts traditional course material online, and arranges for online tutors to be available to students whenever they need help. This saves on the most costly resource used to provide an education—an instructor’s time. This allows StraighterLine to offer courses for a fraction of the cost of a standard college. However, the accreditation process restricts StraighterLine from selling its services directly to students, since only institutions, not courses, can be accredited. As a result StraighterLine is forced to partner with traditional universities, who often charge much more for the course.118
Evaluation: Don’t be a barrier to entry for new innovative colleges. Accreditation did not serve as a bar- rier to entry for new innovative colleges prior to 1952 because it did not have the power to prevent entry. In the 1952–1985 era, accreditation performed satisfactorily in this regard. The expansion of higher edu- cation in this era forced accreditors to be lenient when it came to the standards for entry. However, in the period since 1985, accreditation has too often become a barrier to entry. It remains too embedded in its traditional measures of institutional quality to allow innovative ideas to gain momentum in transforming