|For-Profit Schools Converting 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. The western accreditor initially okayed the sale while raising questions about apparent conflicts of interests, then deferred renewal of the school’s approval, demanding that conflicts be eliminated. An accreditor of eastern schools also raised questions about potential conflicts. Widespread closures of campuses and confusion followed the sale.
||Claimed nonprofit status starting in 2017
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, Bridgepoint Education, Inc., announced in March 2018 that it intends to convert Ashford to a nonprofit that would contract with Bridgepoint for services. In a call with investors, the company CEO said the nonprofit would contract with for-profit Bridgepoint and pay it 60 to 65 percent of tuition revenue.
||In November 2018, the school’s accreditor deferred a decision on the change of ownership, pending review of additional information.
|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
|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 a deal that essentially means the nonprofit will be locked 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 CEO of the nonprofit is also the CEO of the for-profit. Galle says GCU’s claim to be nonprofit “is a trustworthy-looking wrapper around a for-profit business.”
||Claimed nonprofit status 2018
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. TCF has contacted National Louis for more details about the transaction.
||Accreditor approval announced August 6, 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
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. No details have been made available regarding the transaction.
||In process in 2018
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
|Operating as a part of nonprofit Rider University, Westminster Choir College announced that it was being purchased by a Chinese investment company, Kaiwen Education. The investors reportedly created and control a nonprofit that is slated to run the college.
||Sale and transfer in process as of fall 2018, but is the subject of protests and lawsuits