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Accreditors and colleges press Education Department to modernize oversight: composite score, change-in-ownership and accreditation rules
Summary
Regional accreditors, commission chairs and several institutions urged the department to streamline regulations on accreditors’ recognition and renewal, modernize the composite financial-responsibility score, clarify change-in-ownership procedures and simplify return-of-Title-IV requirements to reduce delays and support innovation.
Washington — Accreditation bodies and institutional representatives urged the Department of Education on Friday to modernize several Title IV regulatory tools they said have become burdensome and in some cases impede institutional innovation and timely transactions.
Heather Perfetti, president of the Middle States Commission on Higher Education and chair of the Council of Regional Accrediting Commissions, told the hearing that accreditor recognition and renewal processes could be streamlined to welcome new accreditors while maintaining consistent standards. “Definitions of distance education, competency‑based education, and credit hour should be re‑examined to determine the extent to which current regulations inhibit innovation,” she said.
Tracy Schneider of the Middle States Commission said recent department guidance on changes in ownership has created a two‑step process that can leave institutions “in limbo, often for more than two years,” and that the department should include accreditors and state agencies when revisiting change‑in‑ownership rules (34 C.F.R. 600.31, as referenced by commenters).
Several institution representatives called for an updated composite score, which the department uses to assess an institution’s financial responsibility for Title IV participation. Edtellum Global Education urged adding intangible assets (goodwill, trademarks) to the composite‑score ratios, arguing the metric — created in 1997 and recommended for modernization by the Government Accountability Office — now unfairly penalizes institutions that specialize in distance education or that undergo acquisitions.
Institutional comments also recommended revisiting return-of-Title-IV‑funds procedures (34 C.F.R. 668.22) to provide more clarity and reduce administrative burden. One former department official and an institutional oversight veteran urged the department to modernize financial reporting to require quarterly unaudited statements in a machine‑readable format so states, accreditors and the department can better monitor closure risk.
Why it matters: Change‑in‑ownership delays, an outdated financial‑responsibility metric and unclear return‑of‑Title‑IV processes can slow transactions, frustrate state regulators and accreditors, and, according to commenters, affect students when institutions restructure. Accreditors urged preserving protections for students while eliminating unnecessary regulatory steps.
The department said it expects negotiated rulemaking committees to include interested stakeholders and that the process will provide issue papers and draft language for committee discussion. Commenters asked that accreditors, state oversight agencies and institutions be explicitly included in any negotiations over regulations that affect institutional operations.
Speakers representing accrediting bodies and institutions submitted written comments and said they would participate in negotiated rulemaking sessions if invited.
