In 2013, outstanding student loan balances in the United States exceeded $994 billion. This growing volume of student debt has had far–reaching consequences for both individual borrowers and society as a whole. In many ways, the federal student loan program, available to students under the Higher Education Act (HEA), has achieved its goal of making higher education more accessible. Undergraduate college enrollment increased from 10.5 million students in 1980 to 17.6 million students in 2009. Despite the benefit of increased enrollment, however, the federal loan program has been criticized for increasing student loan debt and contributing to the “student loan crisis.” This student loan crisis threatens to undermine the purpose of the HEA by making higher education less accessible to Americans.

Higher education institutions must be accredited to be eligible for Title IV federal funding under the HEA. The federal government relies on accreditation to assess the academic quality of the institutions and programs to which it provides federal funding. This federal funding–accreditation relationship, riddled with conflicts of interest, has been ineffective in regulating student loans, contributing to the mounting student loan debt. This Note examines the relationship between the federal student loan system and accrediting bodies through economic theory, ultimately arguing that the HEA be amended to decouple accreditation and federal student loans.