A handful of for-profit career colleges have shifted to nonprofit status in recent years in deals that can carry significant financial benefits for the former proprietors, The New York Times writes. The moves come amid a government crackdown on commercial institutions that critics say hobble students with heavy debt and credentials that get them little traction in the job market.
The article focuses in Keiser University in Florida, which was sold in 2011 to nonprofit Everglades College. As in other switches cited by the Times, the nonprofit buyer was established by the commercial university's owner, Arthur Keiser, who provided Everglades with hundreds of millions of dollars in loans and gifts. In going nonprofit, schools give up some moneymaking opportunities but gain a tax exemption and greater eligibility for state grants and federal student-loan funds.
Mr. Keiser was paid $856,000 in 2012 as the newly nonprofit university's president and has ownership interests in properties and companies to which the institution pays millions for rent and services. He said becoming a nonprofit was a "natural transition" for the multicampus university, allowing it to become a residential college, and that his business arrangements with the school "are at fair market value terms and conditions."