What Happens if Your School Loses Accreditation?

Kim-Ling Sun
Updated September 20, 2023
Edited by
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Accrediting agencies ensure schools meet academic standards and provide their students with quality education and resources. When schools fall short of those standards, they lose their accreditation. Over 20 colleges have lost their accreditation in the last two decades.

Attending an unaccredited school means you no longer have access to federal financial aid — only regionally or nationally accredited colleges are eligible for federal funding. Earning a degree earned from an unaccredited school can also hold little value to employers and disqualify you from attending graduate school.

If your school loses accreditation, it may be best to transfer to another college.

Why Does a School Lose Accreditation?

After an institution undergoes the initial accreditation process, the school must renew its accreditation every 5-10 years. If a college fails any of the specific criteria, the school will be given a warning and asked to remedy the issue.

If the issue persists, the school will be placed on probation. The accrediting agency carefully monitors institutions on probation to determine whether they’re addressing the highlighted issues. Colleges are required to inform current and prospective students of their probation status.

If the college is unable to bring the institution up to standards, it will lose its accreditation.

A school may fail an accreditation evaluation due to low graduation rates, low pass rates for licensure exams, or low post-graduation employment rates.

How Does School Accreditation Affect Federal Financial Aid Eligibility?

Your eligibility for federal financial aid is directly linked to your school’s accreditation status. Only accredited institutions can offer federally funded grants and loans.

Federal financial aid offers several important advantages:

  • Federal grants do not require repayment.
  • Government loans do not require you to have a credit history.
  • Fixed interest rates for federal student loans tend to be lower than those for private loans.

If you receive federal aid and your school loses accreditation, you may need to apply for private loans to finance your tuition. Private loans typically require you to have a minimum credit score or obtain a co-signer.

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What Happens if Your School Loses Accreditation While You’re Still Attending?

If you are currently enrolled in a school that has lost its accreditation, you have a limited time to take action — after it loses accreditation, the school may close entirely.

If the school does remain open and you continue to attend, your completed degree will be considered unaccredited. An unaccredited degree can affect your employment eligibility and graduate school options.

Without accreditation, the school loses its ability to secure Title IV funds. This means it will be unable to provide financial aid for future semesters, and you may have to secure a private loan if you wish to continue to attend.

Schools in danger of losing accreditation usually provide resources for students to transfer to another school that will accept their credits. If you delay transferring until after your school has lost accreditation, your earned credits may not transfer with you.

Should I Transfer if My School Loses Accreditation?

If your school loses its accreditation, you may want to transfer to a different college. Once it cannot secure federal student loans, the school’s already teetering reputation often tanks and enrollment drops.

Without revenue from enrollment, institutions end up closing their doors because they cannot financially survive. And when a college closes, you won’t receive a refund for the tuition you’ve paid and the classes you’ve taken.

Transferring can help you avoid the stress of not knowing what will happen next. Being proactive and deciding to transfer immediately will prevent you from scrambling and having to make a knee-jerk decision that might delay you from continuing on the road to your degree.

What Happens if Your School Loses Accreditation After You Graduate?

Good news! A degree earned before a college loses accreditation is still valid.

Because many institutions close after losing accreditation, securing copies of your diploma, transcripts, and other records is a good idea.

Typically, colleges that shut down end up providing former students access to these documents through a transcript service or another company.

When listing your degree on job applications, be sure to include your graduation date so employers know you completed your education while the school was still accredited.

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