Embattled for-profit college network under new scrutiny
- The for-profit Education Management Corporation is facing questions about the role of its nonprofit foundation, which helped to raise scholarship funds for students and was operated by former Maine Governor John McKernan.
- EDMC is among a handful of for-profit institutions forced to settle lawsuits with defrauded students and graduates with more than $95 million in fines and $100 million in forgiven loan debt.
- Federal investigations reveal a pattern of predatory recruitment and enrollment practices, which helped to increase the value of the institution to more than $33 million in 2007.
This is another tale of the widespread troubles caused by for-profit colleges and universities in the lives of millions of students, and how the federal government's intervention to reduce student loan debt can, almost instantly, close these schools. For-profits and their accreditors are scrambling to prove integrity in their operations, and while some established schools are proving to be successful, even attractive higher ed partners, the industry at large faces near extinction.
There may be opportunities for nonprofit organizations to purchase certain campuses and operations from closing for-profits, in order to strategically expand operations and outreach. For-profits authored a blueprint for higher education access and marketing, but it is up to traditional institutions to put this blueprint into action, and perhaps it can be done with strategic acquisition or partnership.