Since the fall of the Jedi along with the Old Republic, the Jedi Academy was largely a fluid entity. Existing as a bond between a Jedi and his or her students, the Academy did not exist in any legitimate way - Jedi trials were administered by the teacher, if at all. Jedi were also allowed to belong to virtually any faction and still train as a Jedi. This failed to create a particularly sustainable group of Jedi, and so the Order faltered. Up until the middle of Year 7, this pattern continued to occur.
The ressurection of the Jedi Order and the Jedi Academy began when Jedi Master Reajiad Nero returned from his trips in the Outer Rim to find the Order in shambles. Named Grand Master, first among equals, Nero called for the assembly of an official High Council. Jedi Masters Rostar, Terak Falkor, Thragg Craghorn, and Eric Taylor Jackson made up the renewed Council.
For the next year the Order began to work on improving relations with natural allies and improving its own reputation, having long been tarnished by disorganization and Jedi of questionable values.
The most effective way, the Council decided, to truly improve the unity and strength of the Jedi Order was to devote more time to the Jedi Academy. For the first time since the Old Republic fell, a Jedi Academy faction was to exist.
It was realized that a vibrant Order required a sense of unity and a careful nurturing of the values the Jedi needed, as well as the opportunity for the Order to administer true Knighthood trials to all Jedi. For the first time, all Padawans would belong to one faction.
With an eye to the future of the Galaxy, the Order devoted itself to the education of its future, in the hopes that the Jedi Order would not only grow, but flourish, and be all the better suited to help foster peace and unity throughout the Galaxy. Soon, after a period of much growth, this dream was realized, and the Jedi Academy was re-absorbed into the Jedi Order, to help strengthen the bond between all Jedi.