Accreditor Takes a Tougher Look at Sales of Colleges

Before 2008, the Higher Learning Commission of the North Central Association of Colleges and Schools had a reputation as an accreditor that allowed flexible standards for the burgeoning for-profit education industry, which has rapidly attracted both students and the federal grants and loan dollars they use to pay tuition.

But this week, the regional accreditor, which counts many of the largest for-profit education companies among its members, showed that it was serious about changing that reputation. On Wednesday, the commission announced that it had denied a request to transfer the accreditation of Dana College, a small, religiously affiliated college in Nebraska, to a group of private investors that had said it would buy the college and save it from financial ruin. At the same time, the commission rejected a similar proposal for Rochester College, in Michigan.

In Dana’s case, the commission’s decision effectively killed the proposed sale and prompted the college to announce that it would close this fall, displacing some 500 students and about 130 faculty and staff members. The college has agreements with the University of Nebraska at Omaha and Grand View University, in Iowa, that will allow seniors to complete their studies there, and nearly 30 institutions have announced that they are accepting transfer students from Dana.

Raj Kaji, president of the Dana Education Corporation, formed to buy the college, said in an interview Thursday he believed that "the current political climate has influenced decision making in this process."

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