Ashford Seeks to Become a Nonprofit

Ashford University is the latest big for-profit bidding to become nonprofit. The university's owner, Bridgepoint Education, will seek to become an online program management company.

March 13, 2018
 
Ashford University logo

Another large for-profit university is seeking to become a nonprofit.

Bridgepoint Education today will announce a planned merger of its University of the Rockies with the larger Ashford University, an official with the company said. And Ashford, as the merged universities, will seek to convert into a nonprofit.

“They will be able to focus on what they do best, which is academics,” said Vickie Schray, Bridgepoint’s executive vice president of regulatory affairs and public policy.

The conversion and merger will require approval from state and federal regulators as well as the WASC Senior College and University Commission, which is Ashford's regional accreditor.

Bridgepoint will continue on as an online program management (OPM) provider -- a booming space in higher education. The company will negotiate with Ashford to enter into a shared services agreement, with Bridgepoint likely handling data management, course management software and services, technology, and financial aid processing for the nonprofit university.

“As an OPM, Bridgepoint Education will bring years of technological and academic innovation and intellectual property development to other colleges and universities that desire to serve students through online education programs,” Schray said in a written statement.

Ashford will be independent from Bridgepoint, the company said. The university’s current Board of Trustees does not include any officers from Bridgepoint, which will release more details about the plan today.

If approved by regulators, the contract between Bridgepoint and the new Ashford will in some ways resemble other major for-profit conversions or acquisitions, including Grand Canyon University’s ongoing attempt to become a nonprofit and the high-profile acquisition of Kaplan University by Purdue University, which is creating the new Purdue University Global.

The structures of for-profit conversions have been controversial. The Century Foundation, for example, has criticized some of those moves as being attempts by for-profit owners to escape federal regulations, which tend to be tighter on for-profits, while still reaping personal benefits from owning the colleges.

Bridgepoint said Ashford will be more independent from its former corporate owner than is the case for some other former for-profits. The company, which has been working on its conversion bid for two years, will remain publicly traded and plans to offer its program management services to other universities as well as Ashford.

The university’s regional accreditor has scheduled a site visit for April and may decide on the proposed changes as soon as June. The U.S. Department of Education, the Internal Revenue Service and regulators in California, Colorado and other states also will need to approve the merger and conversion.

If successful, Ashford will leave just a handful of remaining large, degree-issuing for-profits.

The industry has struggled with years of severe declines in revenue and enrollments. Its problems were compounded by the Obama administration’s regulatory crackdown as well as by a related marketing hit to for-profit higher education. Two of the sector's biggest players -- Corinthian Colleges and ITT Technical Institute -- collapsed in recent years, while other big for-profits merged, went private or concentrated more on offerings in other countries.

History Repeats

Bridgepoint said the conversion bid for Ashford will bring the university back to its nonprofit roots.

Ashford has had an eventful 13 years since Bridgepoint in 2005 bought the Franciscan University of the Prairies, a religious college in Iowa that was on the verge of closure. Ashford grew rapidly after Bridgepoint’s purchase, eventually peaking at more than 90,000 students. But the sale also drew plenty of criticism, most notably from Democrats in the U.S. Senate, for having included the former religious college’s regional accreditation as part of the purchase. The debate over Ashford’s accreditation and physical location continues, and outlasted the Iowa campus, which was shut down in 2015.

The combined enrollment of Ashford and the smaller University of the Rockies was roughly 41,000 at the end of last year. Doctoral programs offered by the University of the Rockies will become a new, yet-to-be-named doctoral college within Ashford, Bridgepoint said, while its master’s programs will be integrated into Ashford’s existing colleges.

Lawyers and for-profit industry analysts have said that as many as a dozen nonprofit conversion bids are in the works. Several are seeking to make the change during the deregulation-minded Trump administration.

Ashford's president, Craig Swenson, said the conversion will benefit students.

“As the higher education environment continues its rapid evolution, Ashford University believes this transformation will enable us to serve students even more effectively as they pursue their academic aspirations,” he said in a written statement. “We also believe that the synergies arising from the merger of Ashford University and University of the Rockies will allow us to make an even greater contribution to the public good.”

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