|For-Profit Schools Seeking to Convert to Nonprofit Status
|The Schools (alphabetical)
||Conversion Plan Details (questionable practices in bold)
Texas, Florida & Georgia (other campuses closed or closing)
Enrollment (2017): 5,400
|After the predatory Corinthian Colleges collapsed in 2014, the U.S. Department of Education arranged for a nonprofit student loan guarantor, ECMC, to purchase Everest and Wyotech campuses, representing about half of the chain, for $24 million. ECMC created a nonprofit subsidiary, Zenith Education Group, and renamed the schools. All but three have since closed or are in the process of closing, though ECMC has plans for expansion. While nonprofit college boards are usually not paid, the board members of ECMC (and its education subsidiary) pay themselves handsomely.
||Transferred to nonprofit ownership in 2015.
|Argosy University, Art Institute campuses, South University
Various location and online
Enrollment (2017): about 60,000
|From the start, the plan for the Dream Center, a Los Angeles religious nonprofit with no higher education experience, to purchase the national chains owned by for-profit EDMC, was “financially murky . . . and fraught with a potential conflict of interest.” The sale was turned down by the regional accreditor for one set of schools, while another accreditor deferred renewal over apparent conflicts of interest. Some schools closed, and others entered receivership (akin to bankruptcy). The lawyer assigned to oversee what remains of the schools found that they had misled students and inappropriately used the school’s nonprofit status to benefit their for-profit projects.
||Claimed nonprofit status starting in 2017, the schools closed in scandal in March 2019.
Online; company based in San Diego
Enrollment (2016): 36,453
|Following a state lawsuit alleging deceptive practices by Ashford University recruiters, the school’s for-profit owner, announced in March 2018 that it intends to convert Ashford to a nonprofit. . The details of the conversion plan are described an October 2019 TCF essay, “There’s a Right Way to Convert to Nonprofit. Ashford University Isn’t Following It.”
|As of October 2019, the planned conversion is in limbo.
|Atlanta’s John Marshall Law School
Enrollment (2018): 384
|In May 2019 the school sought approval from the law school accreditation section of the ABA for a conversion to nonprofit status. The ABA approved the plan in November 2019.
||Still in process in December 2019.
|Charleston School of Law
Enrollment (2017): 564
|School officials told the local newspaper in January 2019 that they were in the process of seeking approval to convert to nonprofit status.
|Community Care College, Clary Sage College, and Oklahoma Technical College
Enrollment (2016): 1,194
|In 2015, the owner of the three colleges, Dental Directions, Inc., transferred ownership to the nonprofit Community HigherEd Institute for a $29 million note and ongoing rent payments. The nonprofit’s tax return shows only five board members, two of whom are paid full time and were the owners and president of the for-profit college.
||Change of ownership in 2015
|Florida Coastal School of Law
Enrollment (2017): 383
|The school announced in February 2019 that it was planning to claim nonprofit status and affiliate with another, unnamed, institution. It did not rule out the possibility that its for-profit owner, InfiLaw, which has run several problem law schools, would continue to play a role in running the school.
||The ABA denied approval for the conversion in August 2019 and denied it again in November 2019.
|Grand Canyon University (GCU)
Online, based in Arizona
Enrollment (2016): 83,284
|The executives of Grand Canyon Education (GCE), a publicly traded company, created a nonprofit that acquired GCE’s accredited university in 2018. The deal locked the nonprofit into a service contract that “allows for-profit GCU to suck out the vast majority of nonprofit GCU’s income,” according to nonprofit law expert Brian Galle. The school held a call with shareholders in February 2019 in which the CEO boasted of the marketing “tailwind” that its nonprofit label has provided.
||In a November 2019 letter (highlights here), the U.S. Department of Education refused to treat the school as a nonprofit, due to “obviously conflicting loyalties” and the fact that the nonprofit entity is a “captive client” of the for-profit company.
Wisconsin, Minnesota, Ohio, Alabama, Louisiana, Florida, Nebraska, Ohio, Georgia
Enrollment (2017): 6,000
|The for-profit Herzing University was transferred into a nonprofit scholarship foundation its owner had created, with the nonprofit promising to pay the owner $86 million and planning to rent property from family members who remained involved in running the college. The School reports that as of 2017, there are “no longer any loans or leases between the Herzing family and Herzing University.”
||Change of ownership in 2015.
|Independence University, Stevens-Henager College, CollegeAmerica, and California College San Diego
Online and Colorado, Arizona, Utah, Idaho, California
Enrollment (2017): 12,083
|The owner of a small chain of schools took over a pre-existing nonprofit umbrella corporation, the Center for Excellence in Higher Education (CEHE), which then contracted to buy his college for $431 million and to rent the buildings from him for $5 million a year. The Department of Education denied the schools’ claims to nonprofit status. CEHE sued but dropped the suit in December 2018.
||Transfer of ownership occurred in 2013; on September 6, 2018, the system was placed on probation by its accreditor.
|Keiser University and Everglades University
Enrollment (2017): 20,779
|The owner of the for-profit Keiser University arranged for it to be purchased by a nonprofit he had formed previously, Everglades Colleges, Inc. The nonprofit pays him $14.6 million in annual rent, as well as payments on a promissory note set originally at $321 million. Board members include vendors paid by the college. Keiser is the chair of the National Advisory Committee on Institutional Quality and Integrity (NACIQI), which advises the U.S. secretary of education on matters concerning accreditation.
||Everglades claimed nonprofit status in 2002, and purchased Keiser in 2011.
Enrollment (2018): 800
|The for-profit Kendall College, with culinary and early childhood and other job training programs, was purchased from the Laureate Education chain by nonprofit National Louis University.
||The transition was completed in August 2018.
Online, based in San Diego
Enrollment (2016): 10,916
|Purchase announced by the nonprofit National University (NU) System, a nonprofit also based in the San Diego area. The purchase price was determined and financed independently and there is no ongoing contract or relationship between the nonprofit and the former owners, according to NU officials.
||Transfer announced in 2018.
|Purdue University Global (PUG)
Online, now based in Indiana
Enrollment (2018): approximately 30,000
|While claiming to be a public college because of its affiliation with Indiana’s public Purdue University, PUG is actually a limited liability corporation for which the state refuses any financial responsibility, and which is exempt from state public records laws; exempt from state audit requirements; and exempt from state open meeting laws. The school is jointly operated by Purdue and PUG’s former owner, Kaplan Higher Education, under an indefinite contract that grants the for-profit company formal roles in governing the college and the ability to share in the profits.
||Claimed “public” nonprofit status in 2018; to be treated as public, the U.S. Department of Education requires that PUG’s financial aid agreement with the agency be cosigned by Purdue.
Arkansas, Louisiana, Ohio, Texas, South Carolina, Tennessee, Alabama, Tennessee, Hawaii
Enrollment (2017): 6,209
|The colleges owned by Warren Stephens explicitly sought the nonprofit label in order to evade U.S. Department of Education regulations that place a 90 percent cap on the revenue that a for-profit school can receive from federal student aid. After the purchase, Stephens became the schools’ landlord and creditor while the schools were controlled by employees of his financial advising firm. Stephens was among those whose financial dealings were exposed in the Paradise Papers.
||Claimed nonprofit status in 2010
|School of Visual Arts
New York City
Enrollment (2016): 4,406
|This well-known art and design school in Manhattan is reportedly being purchased by the nonprofit SVA Alumni Society, Inc. The planned transaction appears to be legitimate, if carried out as described by New York regulators.
||The school’s 2019–23 strategic plan describes the nonprofit conversion as “forthcoming.”
Enrollment (2016): 963
|The school is owned by the Compass-Rose Foundation, which claims to be a nonprofit but which is essentially a family business of Joneses (husband, wife, and son), according to tax documents. The foundation also sold a school to Sextant Education, an investment vehicle of Secretary of Education Betsy DeVos’s, who named the Jones son to a federal regulatory panel (as a representative of nonprofit schools).
||The Foundation purchased the school in 2003.
|Ultimate Medical Academy
Florida and online
Enrollment (2017): 18,563
|This health professions training school, which had switched from nonprofit to for-profit in 2005, converted back in 2015. Managed by a team that has included former Trump University executives, the for-profit college’s CEO served on the board of the nonprofit that purchased his company.
||Purchased by Denver-based nonprofit shell in 2015.
|Westminster Choir College
|Rider University, a private nonprofit college in New Jersey, announced in June 2018 that it would sell its Westminster Choir College subsidiary to China-based for-profit investment company, Kaiwen Education, which created a nonprofit to operate the school. The plan became the subject of protests and lawsuits.
||Rider scrapped the planned sale in July 2019.