Two (2) For-Profit Colleges To Get The Non-Profit Label Under New Rules
By Ryan Velez
For-profit colleges have long been a bane for minority communities. Targeting minorities and poorer people with the promise of an education, many of these colleges offer degrees that many jobs do not recognize, while charging large amounts to do it. As is fitting for Donald Trump, who ran one of these in the past, for-profit colleges are getting a boost under the current administration, which could end up biting minorities in the end.
The big story comes from Buzzfeed News, which reports that the Education Department has approved the sale of two of the largest for-profit colleges: Kaplan University and the Art Institutes. This will allow the schools to become non-profits. Kaplan, brought by Purdue University, will become a public college. With more and more for-profit schools seeing difficulties in enrollment, the move is something the industry is taking a close look at, but there are plenty of controversies.
The largest of these is that the Obama Administration actually blocked several of these sales under concern that the conversions were more in name only than an honest attempt to shift mentalities. There was also concern that the schools would use the for-profit label to avoid certain regulations. However, the approval means that there will likely be far looser of a leash in this regard.
Kaplan University was bought by Purdue, the large Indiana public college, for just $1, in a deal that earned the blessing of former Obama education secretary Arne Duncan. Current Purdue president and former Indiana Republican governor Mitch Daniels put this together. The fact that the current for-profit company will still have close involvement in the operations of the new university has raised some eyebrows. Purdue's Board of Trustees had confirmed "Purdue's complete control of the institution."
The deal to sell the Art Institutes is a bit murkier, though. The non-profit buying the school is the Dream Center, a tiny, inexperienced nonprofit with Christian roots. Advocates criticizing the move have said that the move will do little to help students and may be a smokescreen for financial incentives.
But the Education Department concluded that "it does not see any impediment to EDMC's request for approval of the change in ownership or its request for approval of nonprofit institution status," according to the emails that confirmed the sales. One major thing to note is that as non-profits, many of the schools' programs will not be subject to the "gainful employment" regulations implemented under the Obama administration, which cut off financial aid to under-performing programs.