The Century Foundation has called on policy makers to “do the right thing” and prevent for-profit colleges from posing as nonprofits.
Robert Shireman, director of higher education excellence and senior fellow at the Century Foundation, authored a report titled "How For-Profits Masquerade as Nonprofit Colleges," published yesterday.
“Placing a non-profit or public label on for-profit colleges will not make them better; instead, it undermines the integrity -- the meaning -- of the label, threatening the practices and norms that have brought excellence to those sectors,” wrote Shireman, who served as deputy under secretary of education in the Obama administration.
The report highlights the University of Arizona’s plans to turn for-profit Ashford University into a nonprofit, the University of Arizona Global Campus. Under the deal, nonacademic functions of Global Campus will be managed by Ashford’s parent company, Zovio, for a fee.
The Century Foundation shared several analyses of the Arizona-Ashford deal, including an analysis by law firm Perlman and Perlman of Global Campus's governance and control that suggests the institution may face significant barriers in securing its desired tax-exempt status.
The Internal Revenue Service has become an “unreliable enforcer of non-profit integrity,” Shireman wrote. But accreditors, federal regulators and state agencies can still turn things around, he argued. When reviewing the Arizona-Ashford deal, Shireman urged these agencies to “assume that they are deciding not just a single institution but what the future of nonprofit higher education will look like.”
Ashford has promoted the potential benefits of its agreement with the University of Arizona.
The deal "will create new, exciting opportunities that promise to expand the reach of affordable, quality higher education," said Craig Swenson, Ashford University's president, on a university webpage explaining the plans to transition to the University of Arizona Global Campus.
"The synergies that follow the affiliation of UA, a premier research and teaching university with an innovative online university like Ashford will benefit students, faculty, and staff members of both institutions," said Swenson.