What Does Accreditation Really Mean?

Most people think that college accreditation is a procedure that ensures good educational quality. A current dispute between a small college in North Carolina and the regional accrediting association tells a different story.

On June 21, 2007, the Southern Association of Colleges and Schools (SACS) voted to remove the accreditation of St. Andrews Presbyterian College in Laurinburg. The college quickly appealed, but was informed by SACS on August 23 that the appeal had been denied. Had St. Andrews done something educationally reprehensible?

No. In a statement issued on July 12, SACS provided the following explanation:

“The Commission voted to remove the College from membership for failure to comply with Core Requirement 2.11.1 (Financial Resources), Comprehensive Standard 3.10.1 (Financial Stability) and Comprehensive Standard 3.10.4 (Control of Finances) of the Principles of Accreditation. These standards expect an institution to provide evidence that is has (1) a sound financial base and financial stability to support the mission of the institution and the scope of its programs, (2) a financial history that demonstrates financial stability, and (3) control over all its financial resources.”

The problem with St. Andrews isn’t really about how it educates students, but about the school’s finances. In its public report, SACS has not specified exactly what is amiss with the school’s financial situation. The college’s president says that recently incurred debts have funded campus improvements that have led to enrollment increases and an increase in net revenues.

St. Andrews is fighting for its very existence since the loss of accreditation means that its students would no longer be eligible for federal financial aid and that course credits they earn wouldn’t transfer to other institutions. Like most small schools, St. Andrews would have a very hard time surviving without accreditation. It seems questionable for an accrediting association to administer what could well be a fatal blow to a college just because its financial situation is less than ideal.

The school has fought back with a lawsuit in federal court. So far, the judge has ruled in its favor, granting an injunction preventing SACS from de-accrediting St. Andrews until the case has been adjudicated. I believe that the outcome of this case has serious implications not only for St. Andrews but for all institutions which fall under the umbrella of SACS. In this regard, I will focus on one particular portion of the complaint filed by St. Andrews that is relevant to all schools applying for re-accreditation.

In Count III of St. Andrews’ complaint, the school alleges that “SACS acted arbitrarily and unreasonably in stripping St. Andrews College of its associational membership and that the decision was not supported by substantial evidence.” It goes on to argue that “removal of membership was unreasonable because Section 2:11 (of SACS accrediting standards) fails to define financial stability.” Furthermore, its standards “require an institution to demonstrate ‘financial stability’ but provides no quantifiable standard to make such a determination.”

St. Andrews makes a very important point here. SACS requires that institutions demonstrate financial stability, yet nowhere in its standards can one find any definition, or clarification of the term. St. Andrews’ allegations of unreasonableness and arbitrariness stem from the fact that it is being held to a standard which is so vague that it leaves an institution wondering just what criteria are being used to evaluate its financial health. How can it possibly know whether it has been judged fairly if it does not know in advance the standards which will be applied?

When published standards are lacking, how can an institution be sure that it is being judged by the same standards as other institutions? This question is very much on St. Andrews’ mind when, elsewhere in Count III of the complaint, it alleges that “the Commission held St. Andrews to different and stricter standards than it held other member institutions found not in compliance with the Principles of Accreditation.” As long as the standards by which an institution will be judged remain vague, claims of arbitrariness and unreasonableness are sure to follow.

This case highlights a fundamental flaw in the accreditation process that needs to be corrected. In this regard, two things must happen. The first is for SACS to give at least the broad outlines of a definition of financial stability including at least some quantifiable standards which are involved in making a determination of compliance. This should not be difficult since there is a wealth of literature dealing with the financial analysis of colleges and universities and with various ways to measure financial health.

Mathematical precision is not the aim here, nor is it even possible. Certainly, there will have to be some level of qualitative analysis and judgment with regard to financial stability. But these judgments should at least have some basis in explicit, quantifiable standards.

The second reform is perhaps the more important one. In order to truly understand SACS’ meaning of the term financial stability and the standard to which an institution will be held, that institution needs to be able to see how other institutions have fared when evaluated by that standard. In other words, an important way to impart meaning to the standard is to examine the precedents that have been set. What better way for an institution to understand what SACS (or any accreditor) means by “financial stability” than to examine the financial picture of other institutions which have been previously evaluated?

The fundamental obstacle standing in the way of implementing this second reform is the fact that the financial statements of colleges and universities are not available for examination. Audited financial statements are prepared and are submitted to the Department of Education as a condition for eligibility for federal financial student aid funds, but there is no requirement that these documents be made public.

I have argued elsewhere for greater transparency on the part of colleges and universities. The fundamental flaw in the accreditation process which the St. Andrews case makes apparent adds another powerful reason for this transparency. The Department of Education should make audited financial statements of the institutions to which it furnishes federal student aid available to the public. This level of transparency is essential for the accreditation process to function in a manner that does not invite allegations of arbitrariness and unreasonableness.

Robert A. Blumenthal is Professor of Mathematics at Oglethorpe University in Atlanta.