On October 30, ED published the Accreditation, Innovation, and Modernization (AIM) Final Rule in the Federal Register. In its fact sheet accompanying the Final Rule, ED stated that it adopted the consensus language from negotiated rulemaking sessions earlier this year. The only changes it made from the Notice of Proposed Rulemaking (NPRM) published in August were to improve clarity in response to public comments. The Final Rule takes effect July 1, 2027. ED designated all of it for early implementation to encourage entities to begin preparing. Early implementation, however, does not permit accrediting agencies to impose new requirements on institutions or programs that would take effect before July 1, 2027. Beginning July 1, 2027, when reviewing an institution, accreditors must now evaluate, among other things: - Student achievement. Accreditor standards must now (a) “establish requirements for the institutions,” not merely “set clear expectations,” and the Final Rule specifies their minimum content, which includes minimum expectations for student success at the institutional and program levels assessed through state licensing or certification exam results, where applicable; (b) retention, completion, or graduation rates, including whether grades meaningfully reflect learning and support progression; (c) post-completion outcomes, including employment and continued education; (d) relevant standardized exam scores; and (e) educational and economic returns relative to total cost of attendance, aligned to credential level, length, and occupational context and measured using STATS rule earnings data published by ED under the Accountability framework, Unemployment Insurance wage records, or other reliable earnings data.
- Faculty. Accreditors must evaluate whether an institution maintains (a) sufficient, “appropriately qualified” and regularly evaluated faculty and instructors; (b) written performance evaluation policies with defined criteria; (c) clearly articulated, consistently applied academic freedom protections; (d) staffing flexibility to respond to persistent changes in demand, program viability, or finances; (e) a civil rights policy; and (f) a policy supporting intellectual diversity.
- Cost-benefit analysis. The accreditor must review any cost/benefit analysis performed by the institution, covering its budget, resource allocation, any business or strategic plan, whether expected benefits justify financial, administrative, and opportunity costs, and the effect of capital expenditures on future operating expenses. In the only wording change from the NPRM, ED clarified that the analysis is the institution's and that the agency reviews it, and ED corrected the cross-reference to the facilities and fiscal capacity standards. Accreditors also must review facilities, safety-law compliance, and student aid administration.
- Transfer of credit. Pursuant to new 34 CFR 602.24(e), the institution's transfer policy must (a) be publicly disclosed under 34 CFR 668.43(a)(11); (b) state all criteria and consider coursework from any institution accredited by a recognized agency; (c) not deny credit based on the sending institution or its recognized accreditor; (d) award undergraduate credit for coursework “comparable in content and learning outcomes” unless the institution gives a written basis for denial grounded in its academic standards or curricular requirements; and (e) allow an appeal within 15 calendar days of a written denial. Under 34 CFR 668.43(c)(3), when a student submits a transcript within the published review window, the school must identify which courses will transfer, give a course-specific rationale for each denial, and estimate the time and courses needed to replace denied credit, all before the student signs an enrollment agreement, registers, or makes a nonrefundable payment.
- Changing or adding accreditors. When a school is planning to change accreditors or seek accreditation from an additional agency, 34 CFR 600.11, which was unchanged from the NPRM, requires the school to submit its prior accreditation materials and a statement of reasonable cause to ED, which the Department will accept unless the change is intended to evade a legal requirement, avoid or delay oversight, obtain eligibility by misrepresentation, or otherwise undermine Title IV integrity. A withdrawal, probation, show-cause, or suspension determination by the current accreditor alone is not grounds for rejection. The school must post the change of accrediting agencies online within 10 business days and make reasonable efforts to notify current students and recent graduates. The rule also removes geographic limits on institutional accreditors and eliminates the two-year rule for new agencies to qualify for recognition.
ED declined to narrow or drop the academic freedom, intellectual diversity, and First Amendment review provisions or to rescind or delay the separate-and-independent requirements for accreditors affiliated with trade associations, offering instead a phase-in and case-by-case consideration for agencies bound by existing leases. ED also retained the provisions expanding the circumstances in which accrediting agencies must require teach-out plans from institutions, including when it places the institution on probation or ED places the institution on provisional certification or heightened cash monitoring. Recognized agencies that applied for renewal before July 1, 2026 will be reviewed under the prior regulations, and ED will present its final staff reports to the Advisory Committee at the 2027 meetings and the proposed first meeting of 2028. Those reports will assess compliance with the regulations in effect before this Final Rule. AACS will continue to keep members informed as accreditors release revised standards in 2027 and as ED implements this Final Rule. |
