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The U.S. Department of Education on Wednesday confirmed that it has granted initial approval to acquisitions of Kaplan University and Education Management Corp., two large for-profits. The proposed transactions by Purdue University to acquire Kaplan and create a new online university, and by the Dream Center, a nonprofit missionary group, to buy EDMC and its for-profit campus chains, both have drawn controversy. Earlier this week Buzzfeed reported that the feds had signed off on the deals, citing emails the publication obtained.
The state of Indiana has backed Purdue's move. But the public university still must get approval from the Higher Learning Commission, the regional accreditor for both Purdue and Kaplan.
EDMC is overseen by several accreditors. One has rejected part of the deal, while another has backed it.
A department spokeswoman confirmed the feds' initial approval of both transactions. But she said those decisions are not final.
"The department has preliminarily concluded that, based on the information provided to the department, there are no current impediments to the requests for approval of change of ownership," she said via email. "But, keep in mind, a preacquistion determination is not a final approval. The department has laid out clear criteria each university must meet as well as conditions it would impose if it were to approve any change of ownership transaction and subsequently enable the acquiring parties to retain Title IV eligibility. We also notified the parties of additional documents and information that must be submitted for the department to conduct its final review of a formal change in ownership application."
Purdue described the approval process in a news release, noting that the department included conditions with its initial backing of the deal. Those conditions have not yet been publicly released.
