Student loans: The Biden administration 'terminates' the accreditation of a failing college

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After years of scandals involving for-profit colleges and the student loans given to students across the nation, the Education Department (ED) removed the Accrediting Council for Independent Colleges and Schools' (ACICS) accreditation status.

The US Department of Education terminated its federal recognition of ACICS, stating that it was no longer a nationally recognised accrediting body and could no longer act as a "gatekeeper" of school eligibility for federal student aid programmes.

ITT Tech and Corinthian Colleges were accredited by the non-profit education business, which is now defunct. Many of the students enrolled in these institutions did not have guaranteed degrees or transferrable credits.

Additionally, ACICS was charged with receiving stimulus funds for coronavirus and pandemic PPP loans from taxpayer-funded sources twice.

"According to Thomas Gokey, an organiser with the Debt Collective, "ACICS accredited the worst of the worst fraud schools, including Corinthian, ITT Tech, Art Institute, and a school that didn't even exist.

" The damage that these institutions have caused to millions of students can only be undone by complete cancellation and a commitment to funding high-quality public higher education for everyone. These institutions should never have been permitted to obtain government funds."

According to a 2018 NBER working paper, students who attend for-profit colleges are six times less likely to find employment after enrolling than their peers who attend public colleges, which increases their likelihood of receiving a federal loan and increases their likelihood of defaulting on student loans by three times.

Cody Hounanian, executive director of the Student Debt Crisis Center, stated in a statement that accreditation organisations are frequently the only thing standing in the way of predatory for-profit institutions receiving access to millions of dollars in federal funding. 

Without enough accountability, these institutions generate enormous profits while burdening American families with debt and leaving them without a useful degree. The measure taken today is a modest first step in eradicating the exploitative components of the American higher education system.

To hold all bad actors accountable and to offer financial assistance to those who have been victimised, additional work must be done.

The student debt issue, which has grown to more than $1.7 trillion, was made worse by predatory loans at for-profit universities.

According to Jacob Channel, senior economist at Student Loan Hero, "the Department of Education's latest announcement regarding the ACICS is good news for both students concerned about attending a school that will provide them with an adequate education, as well as for taxpayers who are concerned that their money will be wasted at fraudulent institutions."

Prior to the deadline for universal forbearance of federal student loans on August 31st, President Biden must decide whether to cancel some student loan debt.

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