- The U.S. Department of Education has denied the Utah-based Center for Excellence in Higher Education a request to convert its business structure to nonprofit: “This should send a clear message to anyone who thinks converting to non-profit status is a way to avoid oversight while hanging onto the financial benefits: Don’t waste your time,” said U.S. Education Secretary John B. King Jr. in a statement.
- It is the strongest message yet of the federal government's determination to dissolve institutions that seek to receive federal financial aid funds while awarding students virtually unusable degrees and certifications.
- Other colleges should be wary of these steps, because the designation of financial risk applies to many of the nation's small colleges.
For-profit institutions are unlikely to appeal for nonprofit conversion after today's announcement from the Department of Education, but smaller institutions should be increasingly worried about the level of influence the government is yielding over an entire segment of the higher education industry.
While many for-profits were engaged in fraudulent recruitment practices, some for-profits with more integrity in their operations may also close as a result of the sweeping regulations against schools and accreditors. And while it may now be exclusive to for-profit schools, the broad approach in punitive regulation of institutions which may be struggling with enrollment or state appropriations may soon bear similar outcomes for nonprofit institutions, without continuing advocacy in rulemaking and policy monitoring.