How to Start a College or University in 2025: Complete Authorization & Accreditation Guide

The complete guide to state authorization, accreditation requirements, timelines, and costs for launching an accredited college or university in the United States

Quick Answer: Starting a college or university requires 18-36 months, $500,000-$5,000,000+ investment, and three key steps: (1) State Authorization, (2) Regional Accreditation, and (3) Federal Financial Aid Approval. Success depends on choosing the right state, adequate capitalization, and expert guidance through complex regulatory requirements.

In This Complete Guide:

• The Reality of Starting a College
• Understanding College Authorization
• College Startup Timeline
• How to Choose the Best State
• Cost to Start a College
• State Authorization Requirements
• College Accreditation Process
• Common Mistakes to Avoid
• Strategic Success Factors
• SARA State Authorization
• Starting a College FAQs

Starting a college or university is one of the most impactful ventures an educational entrepreneur can undertake. Whether you’re driven by a vision to serve an underserved community, fill a gap in specialized education, or create an innovative learning model, establishing an accredited institution of higher education is both ambitious and achievable.

If you’re wondering how to start a college or university from scratch, this comprehensive guide walks you through every step of the authorization and accreditation process. You’ll learn the realistic timelines, true costs, state-by-state requirements, and critical decisions that determine success or failure.

But let’s be honest: starting a college is also incredibly complex.

The regulatory landscape varies dramatically by state. The timeline is longer than most people expect. The financial investment is substantial. And one wrong turn can cost you months of delays and tens of thousands of dollars in wasted effort.

In this guide, we’re breaking down what it actually takes to start a college or university in the United States in 2025—including realistic timelines, critical decision points, and the most common pitfalls that derail new institutions.

The Reality of Starting a College: Timeline, Costs & Investment Requirements

Before we dive into the details of how to start a college, let’s establish some baseline expectations:

Timeline: 18-36 months from initial planning to opening day

Investment: $500,000 to $5,000,000+ depending on scale

Regulatory Complexity: High—involves state, regional, and federal agencies

Success Rate: Higher with professional guidance and adequate capitalization

Starting a college isn’t a side project. It requires full commitment, substantial resources, and strategic planning to navigate successfully. But for those who approach it with the right preparation, the rewards—both personal and societal—are extraordinary.

According to the National Center for Education Statistics, there are over 3,900 degree-granting postsecondary institutions in the United States, demonstrating that this venture is achievable with proper planning and execution.

Understanding College Authorization: The Three-Pillar Regulatory System

Higher education in the United States operates under a unique three-pillar oversight system. Understanding this framework is essential before you take your first step in how to start a university.

Pillar 1: State Authorization (Mandatory)

This is your legal permission to operate an educational institution and confer degrees within a specific state. Every single institution, whether for-profit or nonprofit, must have state authorization.

Critical fact: State authorization requirements vary dramatically. What works in California won’t necessarily work in Texas. What’s required in New York might not even exist in Florida.

Pillar 2: Accreditation (Technically Voluntary, Practically Essential)

Accreditation is quality assurance from independent, recognized accrediting bodies. While technically voluntary, here’s the reality: 29 states require accreditation before they’ll even grant you a license to operate.

Even in states where it’s not legally required, accreditation is practically essential because:

• Students can’t access federal financial aid without it
• Employers won’t recognize your degrees without it
• Transfer credits won’t be accepted without it
• Your enrollment will suffer significantly without it

Pillar 3: Federal Recognition (Required for Financial Aid)

Once you’re accredited, you can apply for federal financial aid participation through the U.S. Department of Education’s Title IV program. This process takes an additional 6-12 months but is crucial for student affordability and enrollment growth.

College Startup Timeline: Realistic Expectations for State Authorization & Accreditation

One of the biggest mistakes aspiring college founders make is underestimating the timeline. Here’s what realistic timelines look like when you start a college or university:

How Long Does It Take to Start a College?

Starting a college takes 18-36 months from initial planning to opening day. The timeline includes:

• Months 1-6: Planning and state research
• Months 7-18: State authorization application and approval
• Months 12-24: Accreditation process
• Months 18-24: Operational preparation
• Months 24-36: Launch and enrollment

Most successful institutions follow this phased approach to ensure regulatory compliance and adequate preparation.

State Authorization Timeline by Program Type

Degree-Granting Programs (Associate, Bachelor’s, Master’s, Doctoral)

• Timeline: 12-24 months (sometimes longer)
• Complexity: High
• Documentation Required: Extensive

Non-Degree Programs (Certificates, Diplomas)

• Timeline: 6-9 months
• Complexity: Moderate
• Documentation Required: Moderate

Exemption Qualification (If You Qualify)

• Timeline: 3-6 months
• Complexity: Low
• Documentation Required: Minimal

The Complete College Startup Journey: Month-by-Month

Most successful institutions follow this phased approach:

Phase 1: Planning & Research (Months 1-3)

Research state requirements, develop your business plan, determine institutional structure, and select your optimal state.

Phase 2: Pre-Application (Months 4-6)

Secure your founding team, develop curriculum framework, submit Notice of Intent, and begin facility planning.

Phase 3: State Authorization (Months 7-18)

Complete comprehensive applications, provide financial documentation, undergo site visits, and respond to agency inquiries.

Phase 4: Accreditation Process (Months 12-24)

Apply for candidacy, complete self-study, host site visits, and achieve initial accreditation.

Phase 5: Operational Preparation (Months 18-24)

Finalize facilities, hire faculty and staff, implement systems, and develop marketing strategies.

Phase 6: Launch (Months 24-36)

Begin recruitment, complete enrollments, launch classes, and monitor compliance.

Want the detailed month-by-month breakdown with specific action items for each phase? Download our complete guide below.

The 29-State Accreditation Requirement You Need to Know

This is one of the most critical factors in your college authorization planning. The following 29 states will not grant you a license to operate without accreditation:

Alabama, Arkansas, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Utah, West Virginia, and Wyoming.

What this means: If you’re establishing your institution in one of these states, you must secure accreditation before or concurrent with state authorization. This adds 12-24 months to your timeline and significantly increases complexity.

Understanding which states require accreditation upfront versus which allow provisional operation is crucial for your strategic planning when you start a university.

How to Choose the Best State for Your College: Authorization Requirements by State

Not all states are created equal when it comes to establishing a new college. Your choice of state will dramatically impact your timeline, costs, and likelihood of success.

What Makes State Authorization Requirements Different

Some states have:

• Clear, streamlined application processes
• Responsive regulatory agencies
• Reasonable timelines (potentially 6-12 months faster)
• Lower application fees
• More straightforward requirements

Other states have:

• Complex, multi-agency processes
• Lengthy review timelines
• Higher costs
• More stringent requirements

Case Study: Texas College Authorization

Texas requires two separate applications to two different agencies for degree-granting programs:

1. Texas Workforce Commission (TWC)
2. Texas Higher Education Coordinating Board (THECB)

This dual-application process can add significant time and cost compared to streamlined states.

Strategic insight: Don’t just default to where you live or where you see market opportunity. State selection is one of your highest-leverage decisions when you start a college.

Our complete guide includes a detailed state comparison framework and selection criteria checklist.

Cost to Start a College or University: Real Investment Numbers for 2025

Let’s talk about what it actually costs to start a college. Undercapitalization is one of the primary reasons new institutions fail.

How Much Does It Cost to Start a College?

Starting a college costs between $500,000 and $5,000,000+ depending on institution size:

• Small institution (100-200 students): $500,000-$2,000,000
• Medium institution (500-1,000 students): $2,000,000-$5,000,000
• Large institution (1,000+ students): $5,000,000+

Costs include state authorization fees, accreditation, facilities, staffing, technology, and 2-3 years of operating reserves.

Startup Cost Breakdown

State Authorization & Accreditation Fees

• State application fees: $1,000-$25,000+
• Accreditation fees: $5,000-$15,000 initially
• Annual memberships and renewals
• Site visit expenses

Operational Startup Costs

• Facility costs (deposits, renovations, equipment)
• Technology infrastructure (SIS, LMS, IT systems)
• Initial marketing and branding
• Faculty and staff salaries (first year)
• Library and learning resources

The Hidden Costs of Starting a College

Most aspiring founders underestimate:

• Time value of delays (every month of delay costs money)
• Consultant and professional fees
• Ongoing compliance and reporting costs
• Technology licensing and support
• Marketing and student recruitment

Critical planning factor: Most institutions take 3-5 years to reach break-even. Ensure you’re capitalized for operations, not just startup.

Research shows that institutions with adequate capitalization (3-5 years of operating reserves) have an 85% higher success rate in achieving accreditation.

The complete guide includes detailed budget templates and financial projection worksheets.

State Authorization Requirements: Governance, Academics & Facilities

Governance Structure for College Authorization

Your board of directors is scrutinized heavily by both state agencies and accreditors. Key requirements:

• Minimum composition: 3 unrelated individuals (IRS requirement for nonprofits)
• Recommended size: 5-9 diverse members
• Essential expertise: Educational leadership, financial management, legal, industry professionals, community leaders
• Age requirement: 18+ years old

Key point: Board quality matters more than size when you start a university.

Financial Documentation Requirements

Expect to provide:

• Three-year operating budgets
• Five-year financial projections
• Proof of adequate capitalization
• Cash flow statements
• Revenue source documentation
• Sometimes surety bonds or financial guarantees

Academic Infrastructure Requirements

Curriculum Requirements

• Learning outcomes for each program
• Complete course syllabi
• Assessment methods
• Academic policies and procedures
• Credit hour justification

Faculty Qualifications

• Terminal degrees in teaching fields (typically required)
• Professional experience documentation
• Faculty handbook
• Professional development plans

Facilities and Resources

• Adequate physical space
• Library resources (physical and/or digital)
• Technology infrastructure
• Laboratory equipment (if applicable)
• ADA accessibility compliance

The complete guide includes detailed checklists for each requirement category.

College Accreditation Process: Complete Timeline & Requirements

Since accreditation is essential for credibility and financial sustainability, understanding this process is crucial when you start a college.

Why College Accreditation Matters

Accreditation provides:

• Student access to federal financial aid (Title IV)
• Credibility and legitimacy with employers
• Credit transfer opportunities for students
• Required licensure in 29 states
• Significantly higher enrollment potential

Types of Accreditation

Institutional Accreditation

Evaluates your entire institution—required for federal financial aid and general degree credibility.

Major regional accreditors include:

• Higher Learning Commission (HLC)
• Middle States Commission on Higher Education (MSCHE)
• Southern Association of Colleges and Schools (SACSCOC)
• WASC Senior College and University Commission (WSCUC)

Programmatic Accreditation

Evaluates specific programs—often required for professional licensing in fields like engineering, nursing, counseling, and teacher education.

How Long Does College Accreditation Take?

College accreditation typically takes 24-36 months from start to initial accreditation. The process includes:

• Pre-Application Phase: 3-6 months
• Candidacy Status: 12-18 months
• Initial Accreditation Review: 6-12 months

In the 29 states requiring accreditation for licensure, this timeline overlaps with state authorization.

The complete guide provides a detailed phase-by-phase breakdown of the accreditation process with specific action items.

Common Mistakes When Starting a College (And How to Avoid Them)

Learn from others’ mistakes. Here are the most common reasons new college startups fail or face significant delays:

1. Insufficient Financial Planning

The Problem: Underestimating costs and operating expenses, leading to cash flow crises.

The Reality: You need funding for startup AND 2-3 years of operations even if enrollment is slower than projected.

The Solution: Create comprehensive financial projections including worst-case scenarios. Build in 50% contingency for unexpected costs. Secure commitments for multi-year funding, not just startup capital.

2. Inadequate State Research

The Problem: Choosing a state without understanding full regulatory complexity.

The Impact: Months of delays, unexpected costs, and sometimes starting over in a different state.

The Solution: Research thoroughly before committing. Compare 3-5 states systematically. Consider hiring a consultant who specializes in state authorization requirements. Download our state comparison framework.

3. Unrealistic Timeline Expectations

The Problem: Expecting approvals much faster than realistic.

The Consequence: Missed commitments, frustrated stakeholders, and financial strain.

The Solution: Use our realistic timeline framework. Add 20% buffer to all estimates. Never promise opening dates until authorization is secure.

4. Weak Governance Structure

The Problem: Board members lacking necessary expertise or commitment.

The Result: Scrutiny from agencies, delayed approvals, and operational challenges.

The Solution: Recruit board members strategically for specific expertise. Ensure 100% commitment before appointments. Provide comprehensive board training on higher education governance.

5. Curriculum Development Shortcuts

The Problem: Creating curriculum without sufficient rigor or alignment with standards.

The Outcome: Rejection of applications or delayed accreditation.

The Solution: Hire experienced curriculum developers. Align with industry standards and employer needs. Have external experts review before submission.

6. Compliance Gaps

The Problem: Missing ongoing reporting requirements.

The Risk: Sanctions, loss of authorization, or revocation of accreditation.

The Solution: Implement robust compliance calendar and tracking system. Assign dedicated compliance officer. Build in quarterly compliance reviews.

The complete guide includes detailed solutions and prevention strategies for each pitfall.

How to Successfully Launch a College: 5 Strategic Success Factors

Beyond avoiding pitfalls, here’s what successful new institutions do proactively:

1. Choose Your State Strategically

Evaluate states systematically using multiple criteria:

• Regulatory environment and clarity
• Market access to target students
• Cost considerations
• Competition analysis
• Timeline requirements

2. Determine Optimal Institutional Type

For-Profit vs. Nonprofit: Each has distinct advantages and challenges regarding:

• Operational flexibility
• Funding access
• Tax implications
• Regulatory scrutiny
• Credibility with different audiences

3. Start with Focused Programs

Launch with 2-4 core programs initially, not 10+. Choose programs with:

• Strong market demand
• Clear career pathways
• Alignment with faculty expertise
• Lower facility requirements

Expand strategically once operations are stable.

4. Build the Right Team

Essential founding roles include:

• Experienced college president or chancellor
• Academic dean with curriculum expertise
• CFO with higher education experience
• Director of admissions and enrollment
• Compliance and accreditation specialist
• Marketing and communications director

5. Leverage Professional Guidance

Strategic use of consultants in specialized areas dramatically increases success rates:

• Accreditation preparation
• State authorization assistance
• Curriculum development
• Financial modeling
• Marketing strategy
• Technology system selection

The complete guide includes a detailed team-building framework and consultant selection criteria.

SARA State Authorization: Multi-State Distance Education Requirements

If you plan to offer online programs to students across state lines, the State Authorization Reciprocity Agreement (SARA) can dramatically simplify compliance.

What is SARA?

SARA is a voluntary agreement among 49 states, D.C., Puerto Rico, and the U.S. Virgin Islands that establishes consistent standards for interstate distance education.

Key benefit: Instead of seeking authorization in every state where you have online students, you get authorized once in your home state.

Learn more at NC-SARA.

SARA Benefits and Limitations

Benefits:

• Centralized authorization in home state only
• Simplified multi-state compliance
• Significantly reduced costs
• Consistent consumer protection standards

Limitations:

• Only applies to distance education
• Doesn’t replace initial state authorization
• Requires existing degree authorization first
• Physical locations need separate authorization

The complete guide includes SARA application requirements and state-by-state participation details.

Starting a College FAQs: Accreditation, Costs & Timeline Questions

How much does it cost to start a college?

Starting a college costs $500,000 to $5,000,000+ depending on size. Small institutions (100-200 students) typically need $500K-$2M, medium institutions (500-1,000 students) need $2M-$5M, and larger institutions require $5M+. This includes state authorization fees, accreditation costs, facility expenses, staffing, technology infrastructure, and 2-3 years of operating reserves.

Can I start a college without accreditation?

While technically possible in 21 states, it’s not practical. 29 states require accreditation before granting a license to operate. Even in states where it’s optional, students can’t access federal financial aid without accreditation, employers won’t recognize your degrees, and enrollment will suffer significantly. Plan for accreditation from day one.

What is the easiest state to start a college in?

States with streamlined authorization processes and responsive agencies offer the fastest timelines (6-12 months faster than complex states). However, “easiest” depends on your specific circumstances. The best state for you balances regulatory clarity, market opportunity, competition, and costs. Download our state comparison guide for detailed analysis.

Do I need a PhD to start a college?

No, you don’t personally need a PhD to found a college, but you’ll need to hire faculty and academic leadership with terminal degrees. Your board of directors should include educational experts, and you’ll need an experienced college president/chancellor. Founders come from diverse backgrounds including business, philanthropy, and education administration.

How long does college accreditation take?

College accreditation typically takes 24-36 months from start to initial accreditation. The process includes pre-application (3-6 months), candidacy status (12-18 months), and initial accreditation review (6-12 months). In the 29 states requiring accreditation for licensure, this timeline overlaps with state authorization.

Can I start accepting students before receiving full accreditation?

In most cases, yes—but with significant limitations. Students won’t be eligible for federal financial aid until you achieve accreditation. Some states grant provisional licenses while you pursue accreditation, but you must achieve it within a specified timeframe (typically 3-5 years).

Do I need to be accredited to operate?

It depends on your state. 29 states require accreditation for licensure. In the remaining 21 states, it’s technically optional but practically essential. Without accreditation, you can’t participate in federal financial aid, and your degrees won’t be recognized by most employers.

How long does it take to become profitable?

Most institutions take 3-5 years to reach break-even and 5-7 years to achieve sustainable profitability. This varies greatly based on enrollment growth, tuition pricing, operational efficiency, and initial capitalization.

Can I operate in multiple states?

Yes, but each state where you have a physical presence requires separate authorization. For distance education, joining SARA allows you to serve online students in 49 states with authorization only in your home state.

What happens if my application is denied?

You can typically address deficiencies and reapply. State agencies usually provide specific feedback. However, denials waste months of time and require substantial rework—which is why getting it right the first time is so important.

Download the Complete Guide: Starting a University in the US

This blog post covers the essentials, but there’s so much more you need to know to successfully start a college or university.

📥 Free Download – Starting a University in the US

Get instant access to our comprehensive guide with templates, checklists, and strategic frameworks.

Your Next Steps: How to Start a College or University

Starting a college or university is one of the most meaningful contributions you can make to education and society. While the process is complex, thousands of successful institutions prove it’s achievable with proper planning, adequate resources, and strategic guidance.

The Foundation for Success

The key success factors when you start a college are:

• Thorough planning and research before committing
• Adequate financial capitalization for startup and 3-5 years of operations
• Strong governance with experienced, committed board members
• Unwavering commitment to quality and regulatory compliance
• Strategic decision-making about state selection and program offerings
• Professional guidance through complex regulatory processes

Get Expert Help Starting Your College or University

Every institution’s journey is unique. If you have questions about starting a college or university, or want to discuss your specific vision and circumstances, JAG Consulting specializes in guiding educational entrepreneurs through this complex process.

Schedule Your Free College Startup Consultation

We offer complimentary consultation calls to help you:

✓ Assess the feasibility of your vision

✓ Understand the specific requirements for your target state

✓ Develop a realistic timeline and budget

✓ Identify potential challenges and opportunities

✓ Determine next steps for moving forward

[SCHEDULE: Free College Authorization Strategy Call →]

📧 Email: info@jagconsultingservices.com

📞 Phone: (805) 380-7949

Your educational legacy starts with a solid foundation. Let’s discuss how to build it right.

Avoid These Common Mistakes: Get Expert Guidance

Don’t let regulatory complexity derail your vision. JAG Consulting has helped dozens of educational entrepreneurs successfully navigate state authorization and accreditation.

[SCHEDULE YOUR FREE STRATEGY CALL →]

This article is for informational purposes only and does not constitute legal or financial advice. Requirements vary by state and change over time. Always consult with qualified professionals for guidance specific to your situation.

About the Author: JAG Consulting specializes in helping educational entrepreneurs establish accredited institutions. Our team brings decades of combined experience in higher education administration, state authorization, and accreditation processes.

Related Articles

• 7 Steps to Starting a College
• Cost Factors in Acquiring a U.S. Private School: What to Expect and Plan For
• Key Performance Indicators Every Private School Should Track

Subscribe to our newsletter for more insights on starting and growing educational institutions.