Lambuth University, a Methodist institution in Tennessee, announced Friday that it has agreed to be sold to private investors, but declined to name the group that is taking over the institution. A week ago, the university said that if it failed to reach a deal by Friday, there was a danger of closure and of failing to meet payroll.
Assuming the deal goes through, Lambuth will be the latest example of a financially struggling private college agreeing to be bought out by a for-profit group. Just two months ago, a new for-profit company bought Dana College, a Lutheran liberal arts institution in Nebraska.
The statement announcing the sale said that "President Bill Seymour told the board that this was the best proposal Lambuth has received throughout its year-long process of searching for a suitable partner."
The statement also said that the university should be able to submit documents about the shift to its accreditor, the Southern Association of Schools and Colleges, in time for a June review of the change in ownership. Transfer of accreditation from a regional accreditor such as SACS is typically a key enticement for for-profit entities considering the purchase of a private nonprofit college. While changes in ownership subject colleges to an additional accreditation review, such a shift is generally considered far easier than starting from scratch to earn initial accreditation. Some critics charge that these accreditation shifts are a serious loophole in oversight of higher education and that the purchase of a nonprofit by a for-profit should be treated to scrutiny equivalent to the creation of a new institution.
Despite such concerns, the sale at Lambuth -- and several of the previous sales -- have won campus support, in large part because of fears that these institutions would fold if deals didn't go through. Lambuth explored a number of options, including becoming a state institution (no small shift for any private college, but particularly notable for a religious institution) before agreeing to a sale. Initial local reports from Lambuth suggest that students and faculty members are thrilled that the college isn't going under.
Lambuth's financial problems first became widely known in the summer of 2008, when the university rescinded raises that had already been pledged for the academic year, and word circulated that three vice presidents and the chief operating officer had all left the university. At that time, enrollment was about 750 and officials said that they needed to have around 1,000 to make the college work financially. According to The Jackson Sun, enrollment is projected to be 550 in the fall.
Beyond Lambuth and Dana, some of the other nonprofit colleges purchased in recent years include: Waldorf College, in Iowa; Daniel Webster College, in New Hampshire; the Colorado School of Professional Psychology (which was renamed the University of the Rockies); and Franciscan University of the Prairies (which was renamed Ashford University).