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ACICS willingly accredited predatory schools that left students across the country mired in debtand without the quality education they were promised. Despite being aware of these schools’misconduct, ACICS continued to accredit the institutions, in some cases up until the day theschools closed and filed for bankruptcy.On the basis of ACICS’s extreme and far-reaching oversight failures, the Departmenttook the extraordinary step of denying ACICS’s petition for renewal of its national recognitionjust over one year ago. Given the gravity of ACICS’s recent dereliction and the magnitude of theharm ACICS caused to students and taxpayers, any attempt by ACICS to become nationallyrecognized once again should be treated with great skepticism by the Department. TheDepartment’s own regulations establish as a threshold recognition requirement that an agencydemonstrate effective compliance with the Department’s recognition criteria for at least twoyears prior to seeking initial recognition. Since ACICS was found to be noncompliant with theDepartment’s recognition criteria less than two years ago and, in fact, conceded its continuednoncompliance with recognition criteria as recently as February 2017, it is simply impossible forACICS to currently meet this basic recognition requirement. ACICS’s application for initialrecognition, therefore, must be denied by the Department.Furthermore, to date, the Department has not made public ACICS’s application for initialrecognition, depriving the public of an adequate opportunity to participate in the recognitionprocess. We urge the Department to make public ACICS’s application and all accompanyingdocuments and to extend the third party comment period to provide commenters with ameaningful opportunity to offer their input. By withholding ACICS’s application, theDepartment has not fulfilled its requirement to provide an opportunity for public input.ACICS’s Recent Oversight Failures Caused Serious Harm to Students Across the CountryThe undersigned Attorneys General are charged with enforcing consumer protection lawsin our respective states. We have seen firsthand the damage caused by ACICS’s dereliction of itsresponsibilities as an accreditor. As we described in comments submitted to the Department in2016, numerous investigations initiated by our offices uncovered a fundamental lack ofsubstantive oversight by ACICS. ACICS’s lapses include its utter disregard for student outcomesat ACICS-accredited institutions, its inaction after regulators concluded that multiple ACICSaccredited institutions had reported fabricated job placement rates to ACICS, its failure to verifyjob placement statistics even after findings of fabricated job placement rates were made public,and its concerning lack of transparency or cooperation with investigations into student outcomesat ACICS-accredited institutions.Among ACICS’s most glaring oversight failures is its decision to extend accreditation toa large number of campuses operated by the now-defunct Corinthian Colleges (“Corinthian”).ACICS continued accrediting Corinthian even after upwards of twenty state and federal agenciesinitiated investigations into Corinthian’s fraud. In fact, ACICS continued to accredit Corinthianup until the day Corinthian declared bankruptcy. Because of ACICS’s accreditation, thousands ofCorinthian students are mired in onerous student loan debt that they incurred to finance uselesseducations while Corinthian obtained approximately 3.5 billion dollars from U.S. taxpayers inthe form of student loan revenue.2

Career Education Corporation (“CEC”), whose Sanford Brown schools were ACICSaccredited, settled with the New York Attorney General’s Office for 10.25 million based onfindings that CEC fabricated job placement rates. ACICS failed to identify the placement rateinaccuracies and, when CEC’s misconduct came to light, failed to terminate or suspend itsaccreditation of any Sanford Brown schools. ACICS also failed to identify serious complianceproblems at Education Management Company (“EDMC”), which settled with thirty-nine StateAttorneys General to resolve allegations that the school misled prospective students aboutprogram costs, graduation rates, placement rates, and programmatic accreditation. As part of thatsettlement, EDMC agreed to forgive over 100 million in outstanding loan debt.These are merely examples of ACICS’s egregious oversight failures. In its recent reviewof ACICS, the Department identified 245 ACICS-accredited campuses that were subjects of stateand federal investigations and lawsuits concerning fraud, recruitment abuses, and falsification ofjob placement rates, all while maintaining their ACICS accreditation. As the Senior DepartmentOfficial (“SDO”) who denied ACICS’s application for renewed recognition in 2016 explained:By and large the state and federal actions against these schools had been pendingfor years, and culminated in large consumer protection settlements, and sometimesclosing of the institutions. Nonetheless, according to ACICS, none of these 245campuses had faced withdrawal of accreditation, and only three had been placed,belatedly, on the public sanction of probation.Brief on Behalf of Senior Department Official in Opposition to Accrediting Council forIndependent Colleges and Schools’ Appeal, and in Support of Decision to Deny Renewal ofRecognition (“SDO Brief”) at 13.Notably, while ignoring glaring misconduct at the schools it accredited, ACICS allowedrepresentatives of these schools to serve on its Board of Directors/Commissioners (the “Board”)and Board committees, calling into question ACICS’s incentive structure and ability to fulfill itsgatekeeping function with impartiality. For example, representatives from both Corinthian andITT Tech served on ACICS’s Board while those schools were committing or being investigatedfor misconduct.ACICS’s Pervasive Violations of Departmental Recognition Criteria Cost ACICS ItsNational RecognitionFollowing an extensive review of ACICS’s accreditation history and oversight failures,the Department made the rare decision to deny ACICS’s petition for renewed recognition in late2016. Every stage of the review process resulted in the recommendation that ACICS’srecognition should be terminated. This recommendation was made both by the NationalAdvisory Committee on Institutional Quality and Integrity (“NACIQI”) and Department Staff.Ultimately, the SDO found that ACICS had failed to comply with numerous recognition criteriaand denied its application for recognition. The Secretary of Education (“Secretary”) reached thesame conclusions as the SDO following a de novo review of the record, finding that “ACICS hasexhibited a profound lack of compliance with the most basic Title IV responsibilities of a3

nationally recognized accreditor.” Decision of the Sec’y at 8. In fact, both the SDO and theSecretary concluded that, not only had ACICS engaged in “pervasive noncompliance” with theDepartment’s recognition criteria, but ACICS’s failure “to develop and effectively implement acomprehensive scheme necessary to establish, apply, effectively monitor, and enforce therequired standards” indicated that ACICS could not come into compliance with theserequirements in 12 months. Id.In particular, the SDO and the Secretary found that ACICS was out of compliance with21 recognition criteria:1) Acceptance of ACICS by Others (34 CFR § 602.13)2) Staffing/Financial Resources (34 CFR § 602.15(a)(1))3) Competency of Representatives (34 CFR § 602.15(a)(2))4) Academic/Administrative Representatives (34 CFR § 602.15(a)(3))5) Public Representatives (34 CFR § 602.15(a)(5))6) Conflicts (34 CFR § 602.15(a)(6))7) Student Achievement Standards (34 CFR § 602.16(a)(1)(i))8) Fiscal/Administrative Capacity (34 CFR § 602.16(a)(1)(v))9) Recruiting and Other Practices (34 CFR § 602.16(a)(1)(vii))10) Student Complaints (34 CFR § 602.16(a)(1)(ix))11) Title IV Responsibilities (34 CFR § 602.16(a)(1)(x))12) Mission and Objectives (34 CFR § 602.17(a))13) On-Site Reviews (34 CFR § 602.17(c))14) Reasonable Assurances of Accurate Information (34 CFR § 602.18(d))15) Monitoring (34 CFR § 602.19(b))16) Enforcement Timelines (34 CFR § 602.20(a))17) Enforcement Action (34 CFR § 602.20(b))18) Systematic Review of Standards (34 CFR § 602.21(a), (b))19) When New Evaluation Required (34 CFR § 602.22(a)(3))20) Teach-out Plan Triggers (34 CFR § 602.24(c)(1))21) Fraud and Abuse (34 CFR § 602.27(a)(6)-(7), (b))These widespread failures allowed abusive institutions to defraud students across thecountry while benefiting from billions of taxpayer dollars. The Department’s findings revealed adeeply flawed and inadequate oversight system, and they highlighted ACICS’s willful disregardfor the abuses perpetrated by its accredited institutions and the severe consequences for thestudents subjected to these abuses. As the SDO explained, the Department found that “ACICSavoids taking significant enforcement action even when it is well aware of violations of itsstandards.” SDO Brief at 14. Notably, the Department Staff, the SDO and the Secretary foundthat ACICS’s policies “permit[ted] accreditation of non-compliant institutions, and provide[d]multiple opportunities for [ACICS] to continue that status indefinitely, particularly with respectto non-compliance with [ACICS’s] student achievement standards.” SDO Brief at 15. ACICS’sdeficiencies not only manifested in its own failure to take action against abusive institutions, butalso hindered the Department’s ability to take any such actions itself because ACICS “has ahistory of failing to apprise the Department of clear evidence it uncovers of consumer andfederal student aid fraud occurring at institutions it accredits.” Id. at 19.4

In addition to laying bare ACICS’s grave noncompliance with numerous recognitioncriteria, the Department also found that ACICS lacked coherent plans to fix its seriousdeficiencies. For example, with respect to monitoring student achievement, the Secretary foundthat ACICS’s policies were deeply deficient and, moreover, that its “progress in developing andeffectively implementing student achievement standards was entirely lacking or incoherent.”Decision of the Sec’y at 6. As the SDO explained, even during its attempts to secure renewedrecognition, ACICS failed to “accurately describe what its student achievement standards looklike [], or what they will look like in the future. The content of the standards, and who decideswhat that is, appears to fluctuate for convenience . . . .” SDO Brief at 17.Even in those instances when ACICS has identified and promised to implement policychanges, ACICS has repeatedly broken its commitment to do so. Many of the problemsidentified by the Department during ACICS’s previous recognition process were first identifiedby the Department in 2013. At that time, ACICS represented to the Department that it wasinitiating new policies and processes—including those related to student achievement andverifying employment data. See Final Staff Analysis at 29. Nonetheless, during the 2016recognition proceeding, the Department discovered that ACICS had not implemented thechanges it had promised to make. Id.; SDO Brief at 30. ACICS’s history of neglecting itscommitments to the Department and ignoring its existing policies raises serious concerns aboutits fitness to serve as a nationally recognized accreditor.ACICS’s renewed bid for recognition is particularly troubling in light of the institutionsthat ACICS would likely oversee were it to regain recognition. While many of the institutionsthat ACICS accredited at the time it lost its recognition have either closed, obtained a newaccreditor, or are well on their way to obtaining a new accreditor, a number of ACICS-accreditedinstitutions—with combined enrollment in the tens of thousands—have been unable to progresssuccessfully in the search for a new accreditor. 1 If ACICS is successful in obtaining nationalrecognition, it will be responsible for overseeing the very institutions that have been least able toconvince other agencies to accredit them. This is deeply problematic given ACICS’s history ofenabling some of the most abusive and unethical institutions.ACICS Is Ineligible for Recognition under the Department’s Criteria for InitialRecognitionACICS’s recent failures to comply with the Department’s recognition criteria disqualifyACICS from obtaining initial recognition at this time and require the Department to denyACICS’s pending application. The Department has articulated requirements that accreditors mustmeet in order to be eligible for initial recognition. Under the regulations governing theDepartment’s recognition of an accrediting agency, an agency’s recognition requires adetermination by Department officials that the agency “complies with the [enumerated] criteriafor recognition . . . and that the agency is effective in its application of those criteria.” 34 CFR§ 602.3 (emphasis added). The enumerated criteria for initial recognition include the requirement1See Center for American Progress, “A Second Status Update on ACICS Colleges” (Feb. 6, 2018),https://www.americanprogress.org/ issues/education-postsecondary/news/2018/02/06/ 445946/second-status-updateacics-colleges.5

that the agency seeking recognition must demonstrate that it has “[c]onducted accreditingactivities, including deciding whether to grant or deny accreditation or preaccreditation, for atleast two years prior to seeking recognition.” 34 CFR § 602.12(a)(2) (emphasis added). By theterms of these regulations, an accreditor can only be eligible for initial recognition if it candemonstrate that it has been effective in conducting accrediting activities in accordance with theDepartment’s recognition criteria for at least two years prior to seeking initial recognition.ACICS cannot meet this threshold requirement.Based on the unambiguous timeline of ACICS’s prior loss of recognition, ACICS couldnot possibly demonstrate that it has been an effective accreditor in compliance with theDepartment’s recognition criteria for two years. On December 12, 2016—less than 15 monthsago—the Secretary determined that ACICS was not in compliance with the Department’srecognition criteria and that, “because of the nature and scope of ACICS’s pervasivenoncompliance,” it would be impossible for ACICS to become compliant within 12 months.Decision of the Sec’y at 1. In other words, the Department previously concluded, following anextensive review of the record, that ACICS could not enter compliance before December 2017.Given this previous Departmental determination, the earliest ACICS could satisfy theDepartment’s threshold requirement of demonstrating effective accreditation for at least twoyears is December 2019.ACICS has repeatedly conceded its noncompliance with recognition criteria andreiterated its noncompliance as recently as February 21, 2017. At ACICS’s previous NACIQIhearing in June 2016, ACICS admitted that it was not in compliance with the Department’srecognition criteria. Tr. of NACIQI Hearing (June 23, 2016), Test. Of Lawrence Leak, Chair ofACICS Bd. Of Dirs. At 71:12-15. Furthermore, in arguing for a temporary restraining order toenjoin the Secretary’s termination decision, ACICS’s attorney conceded that ACICS was not yetin compliance with all of the required recognition criteria, explaining that with respect to “the []remaining approximately ten or so criteria [ACICS] has indicated it can come into compliance []over the next 12 months.” ACICS v. DeVos, No.16-2448, TRO Hr’g TR. 8:8-15, Dec. 20, 2016. 2Among those “ten or so” unmet criteria, ACICS admitted that it had not yet approved a processfor auditing job placement rates that it had promised to adopt in 2013. Id. at 45:4-8. The absenceof such auditing procedures contributed to ACICS’s previous failures to function as an effectiveaccreditor and to its facilitation of the misconduct that destroyed the lives of thousands ofstudents. Less than a year ago, on February 21, 2017, ACICS Interim President Roger Williamsagain conceded ACICS’s noncompliance, explaining that he “still believe[s]” that “[ACICS]could come into compliance within 12 months.” ACICS v. DeVos, No.16-2448, P.I. Hr’g. Tr.56:11-20, February 21, 2017.Critically, demonstrating compliance with recognition criteria would require more thansimply pointing to new policies. As the Department previously explained, “ACICS would haveto provide evidence of effective application and implementation of [any] new policies, practices,and governance structures.” SDO Brief at 9 (emphasis added). Department staff have already2On February 22, 2017, the Court denied ACICS’s motion for a preliminary injunction on the grounds thatACICS had failed to make a showing of substantial likelihood of success on the merits or risk of irreparable harm,and that the balance of equities and public interest considerations weighed in favor of denying injunctive relief.ACICS v. DeVos, No.16-2448, Order Denying Motion for Preliminary Injunction.6

expressed concern about the actual effectiveness of a number of ACICS’s proposed changes,noting that “the ultimate utility of at least some of these [proposed reforms], if actuallyimplemented, appears problematic.” Id. at 26. In any event, ACICS implemented a number of itsnew accreditation standards as recently as September 14, 2017—less than sixth months ago.Accordingly, based solely on the timeline of ACICS’s policy changes, it would be impossible forACICS to demonstrate that its new policies are effective any earlier than September 14, 2019.ACICS’s current application for initial recognition is, therefore, premature and must be denied.The Department Has Not Provided an Adequate Opportunity for Public CommentRegarding ACICS’s Application for RecognitionDespite soliciting public comments on ACICS’s application for initial recognition, theDepartment has withheld the application itself from the public. As outlined above, ACICS wouldbe incapable of meeting the Department’s threshold requirement for recognition at this timeunder any circumstances. Nonetheless, the Department’s failure to make public ACICS’sapplication materials during the public comment window denies the public a meaningfulopportunity to comment fully on ACICS’s application. Withholding these materials negates thepurpose of the public input process that the Department is required to undertake in consideringan accreditor’s application for recognition under the Higher Education Act, 20 U.S.C. §1099b(n)(1)(A). We, therefore, urge the Department to make public ACICS’s applicationmaterials immediately and to provide third parties with a meaningful opportunity to comment onthe materials.ACICS’s systemic accreditation failures and refusal to fulfill its obligations to studentsand taxpayers have enabled predatory schools to ruin the lives of hundreds of thousands ofstudents while enriching themselves at taxpayers’ expense. Given the gravity of these failures,the Department should not grant any application for recognition made by ACICS withoutverifying that ACICS has corrected every deficiency and complied with all Departmentalrequirements effectively and consistently. ACICS simply could not, under any circumstances,demonstrate effective compliance with the Department’s recognition criteria for the requisiteminimum two-year time period. Accordingly, we urge the Department to deny ACICS’sapplication for initial recognition, as necessitated by the Department’s regulations.Sincerely,Maura HealeyMassachusetts Attorney GeneralXavier BecerraCalifornia Attorney General7

George JepsenConnecticut Attorney GeneralMatthew P. DennDelaware Attorney GeneralKarl A. RacineAttorney General for the District of ColumbiaRussell A. SuzukiActing Attorney General, State of Hawai’iStephen H. LevinsExecutive DirectorState of Hawai’i, Office of Consumer ProtectionLisa MadiganIllinois Attorney GeneralThomas J. MillerIowa Attorney GeneralAndy BeshearKentucky Attorney GeneralJanet T. MillsMaine Attorney GeneralBrian E. FroshMaryland Attorney GeneralLori SwansonMinnesota Attorney GeneralGurbir S. GrewalNew Jersey Attorney General8

Eric T. SchneidermanNew York Attorney GeneralJoshua H. SteinNorth Carolina Attorney GeneralEllen F. RosenblumOregon Attorney GeneralJosh ShapiroPennsylvania Attorney G

Albuquerque, NM - Attorney General Hector Balderas today joined 20 attorneys general in opposing an . 632,000 in loans for approximately 553 former New Mexico students of Brown Mackie College due to a settlement with the New Mexico Office of the Attorney General.