US Department of Education issues new rule to ease entry of accrediting agencies: Two-year activity requirement clarified

The U.S. Department of Education has issued a new interpretive rule aimed at reducing barriers for new accrediting agencies seeking federal recognition. The move is part of a wider accreditation reform drive under the Trump Administration, which has placed competition and accountability in higher education oversight at the centre of its policy agenda.

Accrediting agencies play a critical role in the US higher education system. They evaluate colleges and universities and determine whether institutions can access federal student aid under Title IV of the Higher Education Act (HEA). Without accreditation from a recognised agency, institutions cannot participate in federal financial aid programmes.

What the new interpretive rule says

The interpretive rule clarifies how the Department applies existing regulations under 34 CFR Part 602, which governs the recognition process for accrediting agencies.

One key clarification concerns the two-year activity requirement. Under current regulations, accrediting agencies must conduct at least two years of accrediting activities before applying for federal recognition. The Department has now clarified when those activities officially begin for regulatory purposes. Officials say this step removes ambiguity that may have discouraged new entrants or delayed applications.

The second major change relates to timelines. The Department has committed to determining whether an accrediting agency meets basic eligibility requirements within 60 calendar days of receiving its application. It has also stated its intention to complete the review of the written petition within six to 12 months. This is expected to shorten what has historically been a lengthy and complex recognition process.

The rule is nonbinding and does not create new legal obligations. Instead, it sets out the Department’s current interpretation of the law and regulations.

Why accreditation reform is being prioritised

Under Section 496 of the Higher Education Act of 1965, the Secretary of Education must establish criteria for recognising accrediting agencies. These agencies function as “gatekeepers” for federal student aid programmes.

Since 1999, the Department has recognised only four new accrediting agencies with authority to establish institutional eligibility for Title IV participation. Officials argue that this limited entry has reduced competition in the accreditation market.

According to the Department, the current system has been slow to adapt to changes in higher education, including the growth of online programmes, alternative credentials and workforce-focused models. The new interpretive rule is intended to open the market to new institutional and programmatic accreditors and encourage innovation.

Under Secretary of Education Nicholas Kent stated that the administration wants to shift focus towards measurable student outcomes, including job readiness after graduation. The Department maintains that stronger competition among accreditors will improve quality assurance and reduce unnecessary costs for institutions.

Other measures under Executive Order 14279

The interpretive rule follows Executive Order 14279, titled “Reforming Accreditation to Strengthen Higher Education.” The Department has announced several additional actions in line with this order:

• Resuming recognition of new accreditors: The Department restarted the process of recognising new accrediting agencies shortly after the executive order was signed.
• Lifting the moratorium on switching accreditors: Institutions are now allowed to change accreditors without previous restrictions.
• Request for information on the Accreditation Handbook: Stakeholders were invited to provide feedback on updates needed in the handbook that guides accreditation processes.
• Funding support through FIPSE: Nearly $15 million has been awarded through the Fund for the Improvement of Postsecondary Education to support emerging accreditors and institutions seeking accreditation changes. This is part of a broader $169 million grant competition.
• AIM Negotiated Rulemaking Committee: The Department has announced the Accreditation, Innovation, and Modernization (AIM) Committee, which is expected to meet in April and May 2026 to consider draft regulations.
• Proposed rule on the “regional” label: The Department has also proposed an interpretive rule clarifying that the use of the term “regional” by accrediting agencies and institutions may create barriers and mislead students.

What this means for institutions and students

If implemented effectively, the rule could make it easier for new accrediting agencies to enter the system and for institutions to choose among multiple accrediting bodies. Greater competition may give colleges more flexibility in aligning accreditation with their academic models and workforce goals.

For students, accreditation remains directly tied to access to federal financial aid. Any changes to the accreditation landscape could influence institutional oversight, quality standards and accountability mechanisms.

The Department has stated that its objective is to make accreditation more transparent, competitive and outcome-focused. The coming months, especially discussions under the AIM Committee, will determine how these reforms reshape the accreditation framework in US higher education.
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