Higher education in America has become so large, so complex, and so rigid, that there are many functions at its heart that few understand. One of the most important is accreditation. Without accreditation from a recognized body, a college or university cannot get federal loans or other financial aid for its students.

Given the importance of federal financial aid — the total of outstanding student loans is now greater than outstanding credit-card loans — one might think that the accreditation process would be open to public scrutiny. One would be wrong.

The actions of the six regional accrediting bodies, which accredit the majority of colleges and universities, are shrouded in mystery. They don’t issue reports of their findings. When colleges are found to be in financial trouble, the accrediting bodies do next to nothing to disclose it. The accreditation process has all the makeup of a self-fulfilling prophecy: When a college is about to undergo renewal of its accreditation (which generally lasts for 10 years), a team within the college assesses its own performance, and publishes a self-study. Then teams of administrators from other colleges visit the institution under review to assess how well it is doing. Much of the review involves looking at the self-study already prepared inside the college.

Institutional research, or officially-sanctioned naval-gazing, has become a big function on college campuses. The institutional research office at some of the largest universities employ 10 people or more, who do nothing but gather data and write reports about what their university is doing. Institutional researchers even have their own professional association.

Universities have spent a lot of time and money building up the current insular system, and they don’t want to see it dismantled. The system has served them well. But the Obama administration is pushing for change, and has discussed the possibility that federal financial aid will no longer be tied to accreditation.

In our next post, we will look at some of the possible solutions, and why it will be difficult to reform the accreditation system.