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Amy Scott: This week, Dana College in Blair, Neb. said it will shut its doors after more than a century in business. A for-profit education company was about to buy the struggling college, but investors backed out when they learned the school would lose something very valuable -- accreditation. From the Marketplace Education Desk, Amy Scott reports.
Amy Scott: In higher education, accreditation is like a golden key. It unlocks the door to millions of dollars in federal financial aid.
Kevin Kinser teaches education policy at the State University of New York at Albany. He says for-profit companies have been buying that golden key by buying struggling schools.
Kevin Kinser: If they wanted to get accreditation by starting from scratch, it would take several years, and they don't want to wait that long.
Officials are cracking down on so-called accreditation shopping. This week, the Higher Learning Commission, a regional accrediting agency, refused to transfer Dana College's seal of approval to its prospective buyers. Sylvia Manning is the agency's president:
Sylvia Manning: Accreditation doesn't attach to a campus or a set of buildings. It attaches to programs and practices and faculty.
For-profit companies often change those programs, shifting to online courses. Dana's closure will leave 600 or so students looking for other options.
I'm Amy Scott for Marketplace.