January 11, 2018

Warren, Colleagues Call on Education Department's College Accreditation Advisory Panel to Address For-Profit Colleges Converting to Non-Profit Status in order to Skirt Oversight

Urge Panel to Outline Steps Accrediting Agencies Should Consider to Ensure Conversion Proposals are in the Best Interest of Students

Text of Letter (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Patty Murray (D-Wash.), Richard Durbin (D-Ill.), and Richard Blumenthal (D-Conn.) today sent a letter to the Department of Education's National Advisory Committee on Institutional Quality and Integrity (NACIQI), urging them to address at their upcoming February 7th, 2018 meeting the recent troubling pattern of for-profit colleges converting to, or attempting to convert to, non-profit institutions in order to skirt oversight and dodge federal accountability rules.  

The Senators noted the urgency of this issue, given recent applications for sectorial changes currently pending before accrediting agencies from Grand Canyon University, a large for-profit institution that plans to seek non-profit status for the second time, and the Dream Center Foundation's plans to purchase Education Management Corporation's (EDMC) for-profit college portfolio (including 31 Art Institute schools, and the Argosy University and South University systems), while maintaining elements of for-profit governance.

"While the underlying predatory conduct of many for-profit schools is already cause for concern, a request for a change to non-profit status raises additional alarms and should be approached with extreme caution by accreditors," wrote the senators.

The senators asked NACIQI to consider a comprehensive review of the guidelines accrediting agencies must consider for sectorial conversion proposals and laid out steps NACIQI can take to ensure the guidelines prioritize the best interests of students and safeguard academic quality.

The senators continued: "NACIQI should make it clear that it will closely scrutinize accreditors that do not review such potentially fraudulent deals and create guidelines requiring increased scrutiny when these deals are brought to accreditors."

For the Department of Education to approve a change in ownership, it must be first approved by the relevant and federally recognized accreditor. The Department has already issued a pre-approval for the EDMC sale, but the sale has not been fully approved by all of the relevant accrediting agencies. The Senators noted EDMC institutions' well-documented predatory practices, and the conversion's potential impact on tens of thousands of students.

On May 9th, Senator Warren led Senators Murray, Blumenthal, Durbin and Brown in a follow-up letter to the Department of Education, asking Mr. Art Kaiser, chair of NACIQI, be recused from this discussion, given his own ties to a for-profit college that converted to a nonprofit school.