The rule implements Executive Order 14279, “Reforming Accreditation to Strengthen Higher Education,” and other administration priorities.

The U.S. Department of Education has finalized a sweeping overhaul of federal accrediting agency recognition requirements, reaching every sector of higher education and covering both institutional and programmatic accreditation. Unlike other recent higher education regulatory changes, Congress did not mandate this rulemaking. Questions remain about whether parts of this rule exceed the Secretary of Education's statutory authority. Institutions—public, private nonprofit and proprietary—and accrediting agencies should review the rule now and start planning for the July 1, 2027, effective date.

On October 30, 2026, the Department published a final rule revising the accrediting agency recognition regulations at 34 C.F.R. Part 602 and related provisions at 34 C.F.R. Parts 600 and 668. The rule implements Executive Order 14279, “Reforming Accreditation to Strengthen Higher Education,” and other administration priorities.

The rule is effective July 1, 2027. The Secretary has, however, designated every section for optional early implementation beginning January 1, 2027, so long as accrediting agencies that implement early do not impose new requirements on institutions or programs that take effect before July 1, 2027.

This Alert discusses the provisions likely to be of most interest to institutions and accrediting agencies, and their potential impact.

Background and Stated Goals

Touted as “the most significant overhaul of the federal recognition system in decades” per the Department's press release, the rule “is designed to strengthen quality assurance and improve affordability in higher education by prioritizing student outcomes, reducing regulatory burdens, promoting innovation and intellectual diversity, and increasing competition among accrediting agencies.”

In announcing the rule, the Department stated that the accreditation system has been “dominated by a small number of accrediting agencies” and has “insulated accreditors from competition, increased administrative costs, [and] contributed to unnecessary credential inflation.”

Major Components of the Final Rule

Major components include:

Breaking Down Barriers to Accreditor Competition

• Elimination of the "Two-Year Rule": The rule scraps the requirement that an accrediting agency grant or deny accreditation for at least two years before seeking Department recognition—a requirement the Department says lacks statutory basis and unnecessarily burdens new agencies. Under revised Section 602.12, an agency may apply for initial recognition once it (1) is legally established to operate in the relevant jurisdiction, (2) has adopted accreditation standards consistent with Section 602.16, (3) has adopted operating procedures consistent with Section 602.23 and (4) has established a process to accept applications for accreditation consistent with Section 602.17—and has at least one institution or program that has applied for accreditation. It must still have granted accreditation to at least one institution or program before recognition is granted. Under Section 602.10(c), a newly recognized agency loses recognition if, two years after initial recognition, no institution or program relies on its accreditation for federal program eligibility.
• Removal of Geographic Restrictions: The final regulations formalize the removal of geographic-scope distinctions that restrict institutions and programs from choosing an accrediting agency and make other anticompetitive behavior a negative factor in recognition decisions. Under revised Section 602.11, the Secretary may not assign institutions or programs to accrediting agencies, restrict or discourage them from seeking accreditation from another recognized agency, or favor one recognized agency over another. Nor may the Secretary delay, condition or otherwise adversely affect an institution's Title IV participation solely because it seeks accreditation from, or switches to, another recognized agency.
• Streamlined Processes for Changing Accreditors: Under amended Section 600.11, and consistent with Dear Colleague Letter GEN-25-03 (May 1, 2025), institutions no longer have to wait for Department approval before changing accrediting agencies, although they must still provide the Secretary with materials related to their prior accreditation and materials demonstrating reasonable cause for the change. The Secretary will deem an institution's cause for changing or adding an accreditor reasonable unless the institution seeks to evade or circumvent federal requirements, avoid or delay enforcement or oversight, obtain Title IV eligibility through misrepresentation or other unlawful means, or otherwise undermine the integrity of the Title IV programs. An institution that changes accreditors must disclose the change on its website within 10 business days and make reasonable efforts to notify all current students and recent graduates for whom it has active contact information.
• Antitrust Clarification: New Section 602.13 provides that Department recognition does not confer immunity from federal or state antitrust laws, authorize collective action among accrediting agencies, institutions or programs, or create a property interest or entitlement to continued recognition. Agencies must also maintain internal controls to ensure antitrust compliance.

New Student Outcome and Performance Expectations

• Program-Level Student Outcomes: In a significant expansion of current regulations, the rule requires accrediting agencies to adopt standards that address success with respect to student achievement "at the institutional and program level" in relation to the institution's mission (Section 602.16(a)(1)(i)). The Department states that these provisions do not prescribe thresholds, that agencies retain authority to set compliance thresholds, and that agencies may apply program-level review proportionately. The provisions do, however, require agencies to evaluate a specific set of student outcomes.
• Minimum Expectations and Reliable Data: Under Section 602.17(a)(1), an agency must evaluate whether an institution or program maintains clearly specified, mission-consistent educational objectives that are developed, regularly reviewed and updated using reliable data (which may include federal or state data), and must review student achievement "including minimum expectations."
• Enumerated Metrics: In reviewing student achievement, and "[a]s appropriate to its own standards," agencies assess: (A) state licensing or certification examination results, where applicable; (B) program retention, completion or graduation rates, including as appropriate whether grades meaningfully reflect student learning and support progression; (C) post-completion or graduation outcomes, including employment and continued education; (D) scores on relevant standardized assessments; and (E) educational and economic returns aligned to the program's credential level, length and occupational context relative to the total cost of attendance. Returns are assessed using earnings data calculated under 34 CFR part 668, subpart Q, enhanced unemployment insurance wage records or other reliable earnings data available to the agency.

Accreditor Independence and Integrity

• Separation from Trade Associations: The rule strengthens the criteria an accrediting agency must meet to show it is separate and independent from any related, associated or affiliated trade association or professional organization (Sections 602.14 and 602.15), and adds a definition of "related, associated or affiliated trade association." For agencies subject to the Section 602.14(b) "separate and independent" test, members of the agency's decision-making body may not be elected or selected by, or be staff of, a related trade association, and the agency must develop its own budget without review by or consultation with any other organization. (The Department confirmed that agencies recognized under Section 602.14(a)(3) are not subject to Section 602.14(b).) Under Section 602.15(e), an agency must also determine its dues without the association's review; may not share personnel, services, equipment, facilities or information technology with such an association, or have office space in the same building; and must prominently disclose all such relationships on its website. Nor may an agency act to restrict access to employment in a profession, occupation or vocation—which expressly includes increasing credentialing standards, increasing the cost or level of required education or training, or decreasing the availability of education or training in a manner that may benefit a related association—unless it provides the Secretary notice of clear and convincing evidence that the restriction is necessary to protect the public interest, that the expected public benefits outweigh the costs of reduced access, and that no less restrictive alternative would adequately protect the public interest. These provisions are likely to significantly affect the operations and viability of some programmatic agencies. The separate-office-space requirement takes effect July 1, 2028, and the Department states that its phase-in for applications submitted during the transition period gives agencies approximately 20 months, through July 1, 2028, to make the necessary changes; agencies constrained by existing leases may contact the Department.
• Viewpoint Neutrality: Agencies must have procedures ensuring that their decisions are neutral with respect to viewpoint and ideology, unrelated to their accrediting policies or standards; an agency with a religious mission need not be viewpoint-neutral (Section 602.18(b)(4)).
• Academic Freedom, Intellectual Diversity and Research Integrity: When applying faculty standards, agencies evaluate whether an institution maintains: a sufficient number of appropriately qualified faculty who are regularly evaluated under written performance evaluation policies with defined criteria; academic freedom protections applied consistently regardless of appointment classification, race or other immutable characteristics, viewpoint or ideology; sufficient flexibility in instructional staffing policies and procedures to respond to persistent material changes in student demand, program viability or financial conditions; for public institutions, consistently applied policies that protect the First Amendment (with similar evaluation of private institutions whose policies guarantee similar protections); policies addressing research integrity and misconduct; a policy or policies to protect civil rights and, as applicable, First Amendment rights; and a policy designed to support, promote and appropriately prioritize intellectual diversity, including measures of student and faculty perceptions of the range of viewpoints offered. Modified expectations apply to institutions with a religious mission (Section 602.17(a)(2)).
• Prohibition on Standards Violating Law: Agencies may not have standards that encourage, direct or otherwise require institutions or programs to violate federal or state law, including by having policies that provide any preferences on the basis of race (Section 602.17(g)). Relatedly, agencies must not have policies requiring institutions or programs to provide unlawful preferences based on race, color, national origin or sex, including in admissions, hiring and the selection of contracts (Section 602.23(h)). Agencies must also ensure that the institutions and programs they accredit have and apply policies consistent with all federal and state laws, and respond appropriately when competent authorities find noncompliance.
• Limits on Institutional Commissioners: New Section 602.15(e)(2) requires each recognized accrediting agency to maintain clear and effective controls, including guidelines, to ensure that members of its standards-setting body (which may include its decision-making body) do not vote on standards or policies affecting any institution or program where the member is an officer, director or employee. This covers institutional presidents, trustees, faculty and staff serving as commissioners or board members. The restriction applies only to votes adopting or revising standards or policies. According to the Department, affected members may still serve and vote on accreditation decisions, implementing procedures and fiduciary and administrative matters. In practice, many accreditor boards consist largely of institutional representatives, and their bylaws often require a majority of members from accredited institutions or impose quorum and majority-vote rules. If recusing these members would prevent an agency from meeting those rules, the agency may be unable to adopt the governance changes needed to comply once the rule takes effect. Accreditors should review their bylaws, conflict-of-interest policies and standards-setting procedures now and amend them as needed before the July 1, 2027, effective date. Options include restructuring board composition or creating a separate standards-setting body.

Reducing Institutional Burden and Promoting Innovation

• Minimizing Compliance Costs: Agencies must conduct accreditation activities in a manner that seeks to avoid unnecessary financial, compliance and administrative burdens—including duplicative reporting, excessive documentation requirements and unwarranted prescriptive processes (Section 602.15(c))—and must train representatives and staff on innovative or lower-cost delivery models and on avoiding unnecessary costs to institutions (Section 602.15(a)(3)). A technical correction to Section 602.15(d) clarifies that an agency's duty to cooperate in developing common templates and forms for institutions changing accreditors runs to other recognized agencies and the Department.
• Institutional Cost/Benefit Review: When applying its standards for facilities, equipment and supplies, and for fiscal and administrative capacity, an agency must review any cost/benefit analysis an institution performs, as well as the institution's administration of student aid programs and the sufficiency and maintenance of its facilities (Section 602.17(a)(3)).
• Credential Inflation Safeguards: Agencies must seek to reduce unnecessary barriers to practices that improve student access, accelerate credential or degree completion or support innovative models of postsecondary education, including program length (Section 602.17(d)). In applying program-length standards, an agency may not categorically prohibit or unreasonably restrict the accreditation of short-term programs designed to prepare students for employment in recognized occupations eligible for federal student aid, or of certificate or degree programs offered in less time than is traditionally required, so long as the latter produce comparable academic, professional and employment outcomes (Section 602.17(a)(4)). Agencies may also apply alternative standards, policies and procedures to promote new models of education, subject to specified conditions (Section 602.18(c)).
• Credit for Prior Learning: An institution or program's educational objectives may include credit for prior learning (Section 602.17(a)(1)(i)), letting students earn credit for skills gained outside the institution. Institutions must continue to disclose the written criteria they use to evaluate and award that credit (Section 668.43(a)(11)(iv)) and must now also disclose whether they consider credit earned in a nondegree program, or hours completed in a noncredit program, for transfer or articulation to a degree program (Section 668.43(a)(11)(v)).

Revised Recognition and Oversight Framework

• Streamlined Recognition Timeline: The rule shortens the recognition review process, which the Department notes currently takes about two years. Department staff will prepare a draft analysis within 120 days of the submission deadline, and agencies will have at least 90 days to respond. The Department declined to set minimum and maximum periods for each stage of review.
• Risk-Based Review: Under Section 602.31, an agency whose accredited institutions receive a substantial portion of all Title IV funds, as determined by the Secretary, must submit a comprehensive application. Other institutional agencies must instead submit focused applications addressing Sections 602.15, 602.16, 602.17, 602.19 and 602.20, and exclusively programmatic agencies must submit focused applications addressing Sections 602.10, 602.16, 602.17, 602.19 and 602.20, in each case with any other criteria directed by Department staff and an attestation of continued compliance; both groups must submit a comprehensive application at least once every third cycle of review. The Department did not set a fixed percentage for "substantial portion" and declined to shorten the comprehensive-review interval.
• Enhanced Transparency and Oversight: The Department will post public notice when the Secretary denies, limits, suspends or terminates an agency's recognition (Section 602.2). Agencies must keep on their websites a record of all actions taken for each institution or program for at least five years (Section 602.26(f)); the Department notes this requirement applies prospectively from the effective date, not retroactively.
• Teach-Out Planning: Institutions must submit teach-out plans within 30 days of specified events, such as a change from full to provisional certification, placement on probation or (for nonprofit and proprietary institutions) an auditor's going-concern doubt or adverse opinion. Institutions must also submit teach-out agreements when events signal heightened risk, such as placement on reimbursement or heightened cash monitoring, emergency or limitation actions, loss of accreditation or state authorization, or planned closure; an institution unable to secure an agreement within 30 days must document why and notify the Department, which may require financial protection. Agencies must confirm that students retain access to transcripts and transfer pathways. The Department declined requests to extend the 30-day period.
• Initial Recognition Petitions: The Department states in the final rule’s preamble that agencies seeking initial recognition that submit their application for recognition after July 1, 2026, must submit applications that adhere to the new rule requirements.

Transfer of Credit

• Presumption of Awarding Credit: Accrediting agencies must confirm that institutions' transfer-of-credit policies (1) do not deny credit based on the institution where the coursework was completed or its recognized accreditor and (2) award transfer credit for undergraduate programs for coursework successfully completed at an institution accredited by a Secretary-recognized agency that is comparable in content and learning outcomes to the institution's own offerings—unless the institution provides a written basis for denial in accordance with its academic standards or curricular requirements (Section 602.24(e)). Students must have an opportunity to appeal within 15 calendar days of receipt of the institution's written notification. The Department clarified that these requirements do not extend to graduate or professional programs, but apply only to credit earned at Title IV institutions accredited by recognized agencies, and prohibit conditioning credit on accreditation by the former "regional" agencies or any subset of recognized agencies.
• Pre-Enrollment Transfer Disclosures: Amended Section 668.43 requires institutions to disclose the timeline by which a transcript must be submitted for timely review. If a student timely submits a transcript, the institution must tell the student in writing which credits it will and will not award, and the estimated time and courses needed to replace denied credit, before the student signs an enrollment agreement, completes registration or makes a nonrefundable financial commitment. The institution must also provide a written rationale specific to each course that does not result in transfer credit. The Department declined to set a uniform federal transcript-submission deadline.

Key Considerations for Colleges and Universities

Although the rule is framed as a set of recognition criteria for accrediting agencies, many provisions will reach institutions directly as agencies revise their standards and procedures during 2027. Colleges and universities should consider the following:

Faster, Broader Public Disclosure

Agencies must require institutions to disclose a probation decision or initiated adverse action to all current and prospective students within seven business days of receipt (Section 602.26(b)), and agencies must update their online directories within one business day of notifying the institution (Section 602.26(d)). Institutions must also publicly disclose any agency action that begins the enforcement timeline, including the programs covered, the reasons for the action and the agency's contact information (Section 602.23(d)). The Department declined to adopt a materiality threshold. Institutions should build these timelines into crisis communications and enrollment planning.

Government Actions May Trigger Accreditor Review

An agency must promptly review an institution that is the subject of a "similar action or status" by a state or federal agency (Section 602.28(d)), and the Department states that even tangential compliance issues should be reviewed. In addition, an agency that identifies potential noncompliance with 34 CFR 668.14, 668.15, 668.16, 668.41 or 668.46 (including Clery Act requirements) must notify the Department (Section 602.20(f)). Institutions facing federal or state investigations or enforcement should anticipate parallel accreditor attention.

Direct Campus Channel to Accreditors

Agencies must maintain at least one structured mechanism—such as registration for meetings during site visits, randomized panels or independently administered surveys—through which current students, faculty and staff may communicate concerns directly to the agency (Section 602.23(l)). The Department states that these communications are not formal complaints unless they meet the agency's complaint requirements.

Public Institution Governance

Agencies must refrain from reviewing aspects of public-institution governance established by state law, including appointments of institutional directors or officers by state officials (Section 602.23(j)). The Department intends this provision to be broad; for example, an agency may not review a governor's statutorily authorized appointment of an administrator. Agency standards also may not restrict public institutions from fulfilling their First Amendment obligations (Section 602.15(f)).

Faculty and Policy Inventory

Because agencies will evaluate the faculty-related policies described above, institutions should inventory these policies now and identify gaps, particularly where staffing flexibility may interact with tenure and shared-governance commitments.

Cost/Benefit and Tuition Documentation

The rule defines cost/benefit analysis to include review of the institution's budget, resource allocation, any strategic plans and whether expected benefits justify financial, administrative and opportunity costs, including the impact of capital expenditures on future operating expenses. The Department also states that agencies will assess whether an institution has reasonably analyzed whether its own tuition and fees are reasonable in light of its costs, while cautioning against uniform agency standards that could raise antitrust concerns. Institutions should consider documenting these analyses in advance of their next review.

Program-Level Outcomes Exposure

The Department's regulatory impact analysis shows wide variation in graduation, earnings and loan delinquency outcomes among institutions accredited by the same agencies, and states that if agencies adopt more rigorous or consistent standards, some institutions or programs "might be at risk of noncompliance." Because earnings are assessed using 34 CFR part 668, subpart Q data, institutions should coordinate their accreditation and accountability-metric analyses at the program level.

Transfer-of-Credit Operations

Institutions should audit catalog and website language for references to "regional" accreditation. Agency recognition status for a program is measured as of when the student completed the course. Late-arriving transcripts do not reopen prior credit evaluations or restart appeal periods, provided the institution made its determination based on the information available at the time and in accordance with its established criteria, and institutions may use standardized, criteria-based templates for course-specific denials if the reasoning is specific enough for students to understand. Registrars will need processes to issue pre-enrollment determinations and to honor the appeal window. The Department acknowledges that institutions may lose tuition revenue from transfer students who need fewer credits.

Accreditor Mobility and Dual Accreditation

The Secretary will not deem an institution's cause for adding an accreditor unreasonable because of a withdrawal, revocation, probation, show-cause order or suspension order (Section 600.11(b)(2)). Agencies may offer an accelerated review process to institutions already accredited by another recognized agency (Section 602.23(k)), and the Department states that an institution retains Title IV eligibility under its existing agency until a change is complete. Institutions dissatisfied with their current accreditor should evaluate these options, including costs, which the Department cautions may be passed on to students.

Substantive Change Relief

Institutions in good standing that have completed at least one accreditation cycle and received approval for at least two additional locations may add further locations by reporting them within 30 days, rather than obtaining prior approval, if they meet agency capacity criteria (Section 602.22(c)). Institutions on probation, subject to negative action in the prior three academic years or provisionally certified face additional prior-approval requirements (Section 602.22(b)).

Programmatic Accreditation Landscape

At least three accrediting agencies have already withdrawn from Department recognition, and programmatic agencies warned that separation costs may be passed on to programs through higher fees. At the same time, the limits on restricting access to professions and on anticompetitive credential inflation may ease pressure on institutions to raise degree levels for professional programs.

Due Process and Review Changes

If an institution challenges a final decision to withdraw, suspend, revoke or terminate its accreditation, the Department may continue Title IV access until arbitration and any judicial review conclude in situations where cutting off access would cause immediate, irreparable harm (Section 602.26(h)). Separately, peer review is no longer a regulatory requirement (but its use is not prohibited), so the composition of evaluation teams may change, although agencies must still use competent and knowledgeable reviewers.

Legal Authority

The accreditation rulemaking stems from Executive Order 14279 and the Secretary's authority under Section 496 of the Higher Education Act (20 U.S.C. 1099b). As a result, the rule is potentially subject to reversal through rulemaking by a future administration and, more importantly, is open to challenge if it exceeds the Secretary's statutory authority. Several state attorneys general challenged the Department's authority in a comment letter on the notice of proposed rulemaking. See our previous Alert for more discussion.

The Higher Education Act contains three distinct provisions that limit the Secretary's authority over accreditation standards:

• Section 1099b(g) provides that "[n]othing in this section shall be construed to permit the Secretary to establish any criteria that specifies, defines, or prescribes the standards that accrediting agencies or associations shall use to assess any institution's success with respect to student achievement."
• Section 1099b(o) provides that "[t]he Secretary shall not promulgate any regulation with respect to the standards of an accreditation agency or association described in subsection (a)(5)." Subsection (a)(5) covers standards for assessing student achievement, curricula, faculty, facilities, administrative capacity, student support services, recruiting and admissions, and other areas.
• Section 1099b(p) preserves the ability of an accrediting agency to set and apply its own accreditation standards and of an institution to develop and use its own institutional standards for student achievement. 

Congress added these prohibitions in 2008 because of bipartisan concern about "additional federalizing of our 6,000 autonomous institutions," as Senator Lamar Alexander stated at the time (Congressional Record, July 31, 2008, at S 7852).

Several provisions of the rule still raise questions about whether it crosses the line from permissible recognition criteria into impermissible prescription of accreditation standards. These include the program-level outcomes review, the "minimum expectations" requirement, enumerated metrics such as educational and economic returns relative to the total cost of attendance, and the faculty, academic freedom, intellectual diversity and cost/benefit provisions of Section 602.17. Commenters raised these concerns. The Department rejected them, stating that the regulations require agencies to consider institutional policies and practices but do not prescribe the content of those policies or require agencies to establish separate substantive standards.

The Department reads Section 496(o) to bar it from adding to the standards listed in subsection (a)(5), but not from explaining the criteria it will use to determine whether an agency effectively applies and enforces those standards, pointing to Sections 496(a)(4)(A) and 496(n) as support. The rule also includes a severability clause stating the Department's intent that, if any provision is held invalid, the remainder of the rule continues in effect—so a successful challenge to Section 602.17, for example, may leave the transfer-of-credit, disclosure and accreditor-competition provisions intact.

About Duane Morris

Duane Morris' Higher Education Group regularly advises colleges, universities and other educational institutions on regulatory compliance, federal student aid matters and the full range of legal issues facing the higher education sector. The group has extensive experience counseling institutions on Department of Education regulations, Title IV program participation, accreditation and the evolving landscape of accountability and transparency requirements.

For More Information

If you have any questions about this Alert, please contact Anthony J. Guida Jr., Edward Cramp, Katherine D. Brodie, Kristina Gill, Jen DeMay, Anamika R. Moore, any of the attorneys in our Higher Education Group or the attorney in the firm with whom you are regularly in contact.

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