Prospective college students worry they may graduate with few job prospects and unpayable debts, especially as the cost of higher education continues to grow. But instead of rigorously holding colleges and universities accountable, the watchdogs tasked with ensuring quality in higher education are asleep at the wheel.

Theoretically, the federal government is supposed to ensure that colleges dependent on federal funds produce economic value for students. However, the federal government largely outsources that quality-assurance task to private nonprofit agencies called accreditors.

Accreditation is often perceived as an effective quality-assurance mechanism because it is so difficult for a college to gain recognition from an accreditor. The process takes years and costs the typical institution more than $300,000. Because colleges must have accreditation to tap into billions of dollars worth of federal student aid, the system represents a steep barrier to entry into the higher education marketplace.

The costs that accreditation imposes might be worth it if accreditors protected students from low-quality programs. But a report I authored for the Foundation for Research on Equal Opportunity (FREOPP) shows that isn’t always true.

My research examines the typical return on investment (ROI) of the colleges that accreditors oversee.

ROI is defined as the benefits of a college degree (the increase in lifetime earnings) minus the costs (tuition, time spent out of the labor force, and the risk of dropping out). FREOPP has estimated ROI for more than 60,000 degree and certificate programs at thousands of colleges nationwide, allowing a systematic analysis of accreditor performance.

My research found that every institutional accreditor oversees hundreds of programs where ROI is negative, meaning students can expect to be worse off for having enrolled.

In fact, at every single accreditor for which data are available, at least 25% of undergraduate programs are negative-ROI. At some accreditors, especially those overseeing less-than-four-year schools, half of the programs produce no net financial value for students.

The abundance of accredited colleges offering negative-ROI degrees might be tolerable if accreditors were doing something about it. To be sure, accreditors rarely want to delist a school entirely. That’s a drastic step that would result in the school losing federal aid and likely closing. Instead, accreditors may wish to nudge institutions with subpar outcomes to improve.

But accreditors are also unlikely to take any adverse action against schools offering low-ROI degrees, even if those actions stop short of de-accreditation. Though accreditors have tools such as probation and warnings to nudge low-performing schools to shape up, the agencies rarely use them.

Among four-year schools where most degrees are negative-ROI, just 16% faced any sanction from their accreditor between 2010 and the present. Among less-than-four-year schools with negative ROI, the rate was 37% — meaning most of these schools escape sanction.

The idea that accreditors are systematically holding low-ROI schools accountable for their performance is fiction. Yet accreditation persists as the primary quality assurance mechanism for colleges and universities dependent on federal funds.

The core of the problem is that accreditors present high barriers to entry for new institutions of postsecondary education but maintain low standards for incumbent schools. It should be the opposite. New colleges should face low barriers to entry, but all schools should continually meet high standards to maintain access to federal funds.

Rather than outsourcing the task to accreditors, the federal government should create its own accountability system to ensure quality at taxpayer-dependent colleges. For instance, I’ve proposed requiring colleges to compensate taxpayers for federal loans that students fail to repay. This creates a direct financial incentive for schools to improve students’ labor market outcomes and reduce tuition levels, thus making graduates’ debt burdens more manageable.

At the same time, we should expose the higher education industry to competition by lowering barriers to entry. New schools with promising educational models should be allowed to bypass the traditional accreditation system so long as they meet certain performance benchmarks. Colleges could still seek accreditation if they wanted, but they would no longer be required to jump through a series of hoops that present formidable costs and do not effectively guarantee quality.

Students deserve to know that when they invest tens of thousands of dollars and years of their lives to earn a college degree, that degree will pay off. Unfortunately, the accreditation system has failed students in this critical way. Unlike the status quo of high barriers to entry and low standards, policymakers should strive for a higher education sector characterized by robust competition and excellent student outcomes.

Preston Cooper is a senior fellow at the Foundation for Research on Equal Opportunity (FREOPP).