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Education & the Workforce Committee Press Release on CFPB Investigation

The following is a press release issued from the chair of the Education and the Workforce Committee.

 

 

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Senate, House Education Chairs Demand Administration End “Unprecedented Overreach” into College Accreditation Process
Remind agency with authority over consumer financial products that Congress gives U.S. Department of Education authority over accreditors



WASHINGTON, D.C. | October 23, 2015 - The chairmen of the U.S. Senate and House education committees today called on a federal agency with authority over consumer financial products to immediately halt its “unprecedented” investigation into a college accreditor.

Senate chairman Lamar Alexander (R-TN) and House chairman John Kline (R-MN) sent a letter to Richard Cordray, director of the Consumer Financial Protection Bureau, following recent reports that the agency has initiated an investigation into a college accreditor.
“We write to request you immediately rescind the issuance of a civil investigative demand to the Accrediting Council for Independent Colleges and Schools (ACICS) and halt any other planned investigatory actions regarding accreditors or the accreditation of institutions of higher education,” Alexander and Kline write. “This action is an unprecedented overreach by the Consumer Financial Protection Bureau (CFPB) and raises serious concerns regarding jurisdiction given the CFPB’s limited enforcement authority that does not in any way include the higher education accreditation process.”

The chairmen write that Congress has given the U.S. Department of Education sole authority over accreditors, but has not given the education department the authority to determine education quality itself. As the chairmen note:

By undertaking this investigation, the CFPB is holding itself out as an expert in determining the quality of education or training programs at institutions of higher education. Congress clearly stipulated in law this determination is not something the federal government can or should do. Not even the Department of Education is authorized by law to determine the quality of institutions of higher education. This action is an unprecedented intrusion by your agency into higher education and undermines the process Congress created to assess institutional quality. This action will cause confusion and disruption throughout the higher education community and ultimately undermine the ability of students to further their education.

Both committees are in the process of reauthorizing the Higher Education Act, which includes a review of the accreditation process. The chairmen write: “Any changes to the accreditation process must take place through the legislative process. Your efforts in this area are an inappropriate and disruptive intrusion into the work of Congress and our nation’s higher education system. For these reasons, we request you immediately cease your misguided investigation.”

The complete text of the letter is below and can be found online here.

October 23, 2015

Richard Cordray
Director
Consumer Finance Protection Bureau
1700 G Street, NW
Washington, DC 20552

Dear Director Cordray,

We write to request you immediately rescind the issuance of a civil investigative demand to the Accrediting Council for Independent Colleges and Schools (ACICS) and halt any other planned investigatory actions regarding accreditors or the accreditation of institutions of higher education. This action is an unprecedented overreach by the Consumer Financial Protection Bureau (CFPB) and raises serious concerns regarding jurisdiction given the CFPB’s limited enforcement authority that does not in any way include the higher education accreditation process.

Institutions are eligible to participate in federal student aid programs authorized by Title IV of the Higher Education Act if they are (1) accredited by an accrediting agency recognized by the Department of Education; (2) authorized to operate by a state; and (3) certified as eligible by the Department of Education. Accreditors review the quality of the education or training provided by institutions to ensure federal funds flow to institutions that meet or exceed the agency’s standards of accreditation. These accreditors have no experience, expertise, or purview with regard to any financial product or financial service that may or may not be offered by an institution of higher education. They also do not offer any consumer financial product that would trigger the jurisdiction of the CFPB.

Furthermore, an accreditation review of an institution has no direct and immediate impact on the financial activity of a consumer with an institution. Receiving accreditation by an accreditor recognized by the Department of Education affirms an institution offers education or training that meets a standard of quality sufficient to provide eligible students enrolled at the institution access to federal aid. However, given that a consumer eligible to receive federal student aid has the option of choosing from over 6,000 institutions of higher education, it by no means forces or coerces a consumer toward a particular institution.

Under the Higher Education Act, Congress has set up a robust process for the Department of Education to recognize accrediting agencies. Led solely by the Department of Education, this process ensures only those accrediting agencies that act as a reliable authority of educational quality and meet the required criteria laid out in the law are recognized by the Secretary. Federal law is clear about the role and responsibilities of accrediting agencies, as well as the role and responsibilities the Department of Education plays in recognizing accrediting agencies. Nowhere does the law authorize a role or responsibility for the CFPB.

Regardless, in August of 2015, the CFPB issued a civil investigative demand to ACICS. ACICS is an accrediting agency recognized by the Department of Education. In fact, the Department of Education determined as recently as 2013 that ACICS is a reliable authority with respect to the quality of education or training offered by the institutions of higher education they accredit. The CFPB has no legal authority to second-guess the Department’s recognition of ACICS.

By undertaking this investigation, the CFPB is holding itself out as an expert in determining the quality of education or training programs at institutions of higher education. Congress clearly stipulated in law this determination is not something the federal government can or should do. Not even the Department of Education is authorized by law to determine the quality of institutions of higher education. This action is an unprecedented intrusion by your agency into higher education and undermines the process Congress created to assess institutional quality. This action will cause confusion and disruption throughout the higher education community and ultimately undermine the ability of students to further their education.

As chairs of the congressional committees with jurisdiction over higher education, we are leading a process to reauthorize the Higher Education Act. Determining the role of accreditors for federal purposes is a congressional responsibility, not yours. We intend to review the role of accreditors during the reauthorization process, along with all other aspects of the law. Any changes to the accreditation process must take place through the legislative process. Your efforts in this area are an inappropriate and disruptive intrusion into the work of Congress and our nation’s higher education system. For these reasons, we request you immediately cease your misguided investigation.