FTC Endorses Education Department Proposal to Expand Higher Education Accreditation Options

The Federal Trade Commission (FTC) strongly endorsed the Department of Education’s proposed reforms to promote competition among accreditation agencies.  Increased competition among accreditors and lower administrative burdens could lower the cost and improve the quality of higher education for millions of American students.  At the urging of President Donald J. Trump, the Department of Education invited comment on a proposed rule that seeks to “reenvision America’s postsecondary quality assurance system” by simplifying the process of recognizing new accreditors.

In a comment filed on Monday, the directors of the Office of Policy Planning and Bureau of Competition applauded the Department’s initiative.  Drawing on the Commission’s decades of experience in evaluating accreditation and occupational licensing schemes, the comment concludes that accreditation monopolies drive up tuition costs, limit consumer choice and stifle innovation.  As the comment explained, incumbent accreditation authorities often have an incentive to impose rigid requirements and oppose more innovative, flexible standards because university interests exercise outsized influence over the process.  For instance, 21 of 27 commissioners on the Middle States Commission on Higher Education are university administrators or faculty.  Such individuals have strong incentives to adopt policies that prevent new, lower-cost education options that could reduce tuition and the demand for incumbent universities.  Accreditation standards that cement the expensive status quo contribute to their job security and keep wages high, while raising tuition costs.

The situation for accreditors of specific professional programs is often worse.  Like institutional accreditors, many programmatic accreditors are influenced by higher education interests.  These programmatic accreditors are also often guided by incumbent members of the profession with incentives to raise educational costs and create barriers for other lower-cost alternatives to enter the profession and become their competitors.

The American Bar Association is a cautionary tale of the competitive harms that result from allowing incumbent professionals and higher education interests to dictate accreditation requirements.  The ABA has a long history of using its law school accreditation monopoly to impose excessive costs and controversial ideological mandates.  Commission staff have lauded recent initiatives by the Supreme Courts in Ohio, Florida, Texas, Tennessee and other states to reduce their reliance on ABA accreditation.  The current comment commends the Department of Education’s push to encourage new accreditors to emerge and compete through accreditation standards that focus on delivering high-quality academic programs at a reasonable price.

The Commission vote authorizing the filing of the comment was 2-0.