We are a for-profit trade school whose accrediation was pulled out because the accreditor changed thier policy not to support for-profit schools. Our initial accreditation was for 6 years, till 2016. We lost students as well as the programs since all the programs that we provide need to have a Department of Education approved school level accreditation. Now, we are almost loosing our finaicial aid eligibility and staring at imminent closure. Our school went from good to bad to ugly. What are our chances of seeking the damages from this accreditor?.
It depends on the contract or agreement by which you applied for and received accreditation. You will need to take all of the documents that pertain to this matter to a good contracts attorney for an interpretation of the parties' obligations and an evaluation of your options.
I agree with attoney's McCalls answer. In addition you need to take your documents to an experienced attorney who can review these documents and analyze the relevant law in this matter in order to explain your rights to you.
I am not saying anything about your school, its goals and missions, I know nothing about it. Considering the recent wave of attacks on for-profit schools which have profit as a motive rather than educating students or otherwise have operated as "visa" mills accepting many foreign students. Many news stories have vilified many for profit schools because graduating students often have nothing of worth in the work place, or are under prepared for their selected discipline.
An accrediting body is the gate keeper to make sure the schools it accredits meet the standards. For instance if an individual were to attend a non-accredited ABA law school, they would probably not be eligible for admission to any state bar or even the bar of the state where the school is located (or only the bar where the school is located). The unaccredited school may in fact have a fine faculty and maybe in the process of meeting the necessary "standard" applicable to rigorous standards. Often some schools will compromise in its early years while accreditation is pending. If a law school dropped it's torts, property, contracts, constitutional and civil procedure courses they would not be meeting the standard. Or if a law school admitted high school graduates as opposed to college graduates.
In providing information to you I would have a few questions and a conclusion. First, what type of institution is it? What was the accrediting body? Did they tell you why your accreditation was pulled? Can that status be appealed? And can you be reinstated and if so under what conditions?
More importantly, why did you form as a a "for profit" school when "non-profit" appears to be a better approach from my perspective. A non-profit educational institution appears more altruistic goal. Also a "non-profit" entity does not mean that the directors and employees of the school can't be paid very well. Not to mention that non-profit status may offer real tangible tax breaks and opportunities.
I think you are going to be fighting an up hill battle in suing the accrediting body because their likely be that they feel your institution doesn't pass muster as the goal of the school is to make money for its investors at the student's expense without providing a valuable commodity (education) to the students.
The fact you are thinking damages as opposed to re-accredation is a red flag. If you are turning out students who are not competitive or will be unable to get a job should be the focus. As a point of information only, you may want to reconsider your business model from an organizational perspective and consider forming a non-profit.
This is not a difficult process for the most part and by and large people do not understand the non-profit entity. For instance, you may or may not know that the National Football League is a non-profit organization under IRC 501(c)(4). Or that the Cleveland Clinic Foundation, The Mayo Clinic and many if not most hospitals are non-profit and billions and billions of dollars run through them. Do you really think the members of the board of directors for the NFL or the Cleveland Clinic are not well compensated. Non-profit does not mean no-profit. Non-profit only means you have an exempt purpose. The following language is directly from the IRS.
Exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary. . . fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes . . . advancement of education or science. . .
I would advise to you to avoid any lawsuit like the plague. Do what you need to do if you are interested in solving the problem. As a trial lawyer and 501(c)(3) expert, I don't think a suit against the accrediting body is the way to go.
I would be happy to speak help you with this issue. Please call me if you need help.
