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What to Know if Your Nursing School Loses Accreditation

Gayle Morris, BSN, MSN
Updated March 23, 2023
    Nursing school accreditation is crucial for financial aid and to take the NCLEX. Discover your options if your nursing program loses accreditation.
    Credit: Fly View Productions / Getty Images
    • While uncommon, nursing programs can lose accreditation, which can affect financial aid options and the ability to transfer credits. It also makes it impossible for graduates to take the NCLEX.
    • Schools can lose their accreditation or the Department of Education can remove approval from an accrediting body, which also impacts individual nursing programs.
    • The Department of Education provides some protection for students to retain the credits earned or have their federal direct loans discharged.

    A nursing program must be accredited for students to receive financial aid or transfer their credits to another program. What happens when you enroll in an accredited program and the program loses the accreditation before you have graduated?

    This happened recently to nursing students attending Stratford University when the Department of Education (DE) withdrew recognition of the accrediting body Accrediting Council for Independent Colleges and Schools (ACICS).

    Although the situation is challenging, the DE has safeguards to reduce the impact on students. Learn more about how this affects a student’s credits, financial aid, and career plans.

    What Does It Mean if a Nursing School Loses Accreditation?

    Accrediting bodies evaluate nursing programs to determine if they meet state and national standards. Universities and colleges rarely lose their nursing school accreditation. However, when it does happen, it may place previously earned credits and financial aid in jeopardy.

    The nursing school accreditation process assesses the quality of education. It is meant to create a culture where the institution continuously strives to improve the quality of educational standards. One of those standards is the National Council Licensure Examination (NCLEX) pass rate, which schools must publish for their graduating seniors. In the past, NCLEX pass rates of 80% and lower were enough to put the school on probation.

    The accrediting body usually gives the program at least two years to address the problem before they lose accreditation. Students who graduate from a unaccredited program lose the ability to transfer their credits to another school or attend a graduate program. It also means they will not be able to sit for the NCLEX and cannot become a registered nurse.

    The two main nursing school accreditation bodies in the U.S. for nursing programs are:

    • Accreditation Commission for Education in Nursing
    • Commission on Collegiate Nursing Education

    In most cases, an individual program loses its accreditation because standards have dropped. However, in the case of ACICS losing standing with the ED in September 2022, it affects all schools they currently accredit.

    If your nursing program was accredited by ACICS, it probably will not have to close, although it may choose to. When the accreditor loses status with the DE, the schools it has accredited have up to 18 months to find and receive accreditation from another accrediting body.

    Historically, this has happened once before to ACICS. In 2016, the DE announced it was pulling recognition of the agency and denied the appeal the agency had filed. Following this, ACICS filed a lawsuit to overturn the decision and they won.

    Since 2016, many of the institutions accredited by ACICS sought accreditation from other bodies. This has left roughly two dozen programs without accreditation.

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    What Happens to Credits if a School Loses Accreditation?

    Schools that lose their accreditation must have a teach-out plan to protect credits that students have already earned. This is an agreement with another institution that allows students to transfer all their credits. It also allows them to start at the new program where they left off at the previous school.

    The teach-out plan ensures that all credits automatically transfer. Students can agree to the teach-out plan from their current program or decline it. Students who decline the school’s offer can then choose any other program where they want to complete their education.

    However, this also means that not all credits may transfer into the new program. Generally speaking, schools only accept some credits from a past program, so students who don’t accept the teach-out plan may be required to repeat some coursework.

    Students who do not accept the teach-out plan may also be denied admission to other colleges or universities. To be admitted, they may need to take remedial coursework to ensure their education is on track.

    What Happens to Federal Aid if a School Loses Accreditation?

    If a school loses accreditation, this also impacts the student’s federal student loans. The DE provides some protection for students who have received federal student aid loans but cannot complete their program because the school lost accreditation. This is called borrower defense to repayment regulation. It helps borrowers who have been defrauded by their school get relief from their federal student loan debt.

    A 2022 report revealed roughly 16,000 borrowers received $415 million in repayment discharges after claims were reviewed against DeVry University, Westwood College, and the nursing program at ITT Technical Institute, among others. The DE has proposed a new rule for defense repayment regulations which would cover a claim based on:

    • Substantial omission of fact
    • Breach of contract
    • Aggressive or deceptive recruitment
    • Substantial misrepresentation or a federal, state, or department adverse action against the institution

    When a school loses its accreditation, the student may be eligible to have their federal student loan discharged. The Federal Student Aid website offers more information and an application for students.

    The application takes around 30 minutes to complete and applies only to direct loans. It does not affect private student loans or other loans that may be administered by state or federal agencies.

    Once the application has been submitted, the DE notifies the applicant about their eligibility. In certain cases, students may also be eligible for a refund of payments they have already made on those loans.

    If the application is denied, students will be responsible for repaying the loan and any interest that accrued. Students who disagree with the decision can ask the DE to reconsider the application by mailing their request. They need to include information about why they believe the decision was incorrect and any evidence to support it.

    It is important to note that students are not eligible for both a teach-out plan and the discharge of their federal loan. In other words, if the student agrees to the teach-out plan and attends another university, they will keep their student loan. If they apply for and receive a federal student loan discharge, their credits cannot transfer to another university.

    How Do I Know if My School Loses Accreditation?

    At the time that the DE pulled the federal recognition of ACICS, the accrediting body only oversaw about two dozen colleges and a total of roughly 5,000 students. However, six years before, the accrediting body oversaw more than 230 programs and 360,000 students.

    Schools must let their students know that they have lost accreditation or that the program is on probation. Stratford University decided to abruptly close the campus. After ACICS announced they were no longer approved by the Department of Education, the school shut down all classes, online and in person, that week.

    Stratford University was the largest program affected by the ACICS loss of approval from the department. However, it is also important to note that the initial move against ACICS in 2016 was an early warning signal since the accrediting body did not improve their standards and made no move to change its function.

    Traditionally, the DE tries to avoid closing colleges. Under the Obama administration and Biden administration, the DE has taken a firmer stance against accrediting bodies that do not hold colleges and universities to national standards.

    All colleges and universities accredited by ACICS are now prohibited from offering programs using federal aid or enrolling new students until they are fully accredited. These current events offer nursing students insight into the time line of events should a nursing school lose accreditation and how students are impacted.