Century Foundation research finds fault with for-profits converting tax status

Dive Brief:

  • New research from the Century Foundation argues that one of the primary reasons for-profit colleges convert to nonprofit status is to avoid regulation.
  • The paper also accuses these institutions of impropriety for paying the colleges’ owners to sit on the boards of trustees.
  • The Chronicle of Higher Education reports the paper’s author recommends the IRS put a halt to similar conversions while it develops a better review system and considers auditing existing nonprofits that converted.

Dive Insight:

The Association of Private Sector Colleges and Universities has come out against the research, saying the researcher is ideologically opposed to for-profit colleges and suggesting that clouds his objectivity. The New York Times published a major exposé in March about for-profit colleges that have converted, chronicling the millions made by school leadership during and after the transition.

Recommended Reading

The Chronicle of Higher Education: Research raises questions about colleges that shift from for-profit to nonprofit


Top Image Credit: Courtesy of Herzing University