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October 06, 2015

Study Raises Questions About Colleges That Go Nonprofit

An education researcher argues in a new report that some commercial colleges that change to nonprofit status behave like "covert for-profits" and generate financial benefits for their backers, The Chronicle of Higher Education writes.

Robert M. Shireman, a senior fellow at the Century Foundation and former Education Department official, reviewed records of four institutions' conversions, including their communications with the Internal Revenue Service. "It appears that these particular for-profits" -- Remington Colleges, Herzing University, Everglades University, and the Center for Excellence in Higher Education -- "wanted to avoid regulations that applied to for-profit colleges," he said.

Mr. Shireman also raised questions about the colleges' governance, including paid board memberships for people who had financial interests in the formerly commercial institutions, and called for greater IRS and Department of Education oversight. Noah A. Black, a spokesman for the Association of Private Sector Colleges and Universities, called the report biased and said it reflected Mr. Shireman's "ideological opposition to our institutions."