For-profit colleges, like Ashford University, are looking to become nonprofit institutions, which would make them subject to less federal oversight and help get rid of their bad image, The Wall Street Journal reports.
Switching “to nonprofit status will allow Ashford University to … be judged and measured as colleges and universities should be—on their ability to support student success,” says Nolan Sundrud, a spokesman for Bridgepoint Education—Ashford’s corporate owner—which announced plans earlier this year to convert the school’s tax status.
The plan requires approval from both the Internal Revenue Service and the Education Department, which under the Obama administration tightened the definition of what it means to be a not-for-profit institution.
Holding nonprofit status would allow the schools save millions in taxes and avoid many federal regulations, such as the so-called 90/10 rule, which limits for-profit schools to receiving no more than 90% of their revenue from federal financial aid. That rule, created in 1998, was meant to ensure that poor-quality schools wouldn’t be propped up by federal aid dollars.
Other prominent for-profit chains are seeking similar approvals from federal officials. As more schools eye such a move, an independent advisory body at the Education Department is weighing whether to make a formal policy recommendation to Education Secretary Betsy DeVos on nonprofit conversions, outlining what schools should be required to do to make the switch.
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