Now that for-profit colleges are coming under the light of investigations, some of the people involved are playing the game by converting to "non-profit", which is still quite profitable for the insiders.
Lots more at the Miami Herald's page Higher-Ed HustleKeiser: not for profit but still lucrative
For many years, Arthur Keiser was the face of for-profit colleges — both in Florida and in Washington, D.C. Keiser chaired the for-profit industry’s D.C.-based lobbying group, the Association of Private Sector Colleges and Universities (APSCU), and presided over the Florida Association of Postsecondary Schools and Colleges, whose members are mostly for-profits.
But in 2011, the school that he co-founded and still runs, Fort Lauderdale-based Keiser University, made a dramatic change: becoming a nonprofit.
Keiser is one of several for-profit colleges that switched to nonprofit in the past few years. An Orlando-area for-profit school, Remington College, also did so.
At a 2012 convention of APSCU, industry lawyers made a presentation that noted the “regulatory advantages” of going nonprofit — along with other potential perks, such as being exempt from property taxes and sales taxes. Arthur Keiser was chairman of APSCU at the time.
. . . tax filings, which are public record, show that Keiser’s nonprofit conversion was achieved by Arthur Keiser selling the for-profit Keiser University to a smaller nonprofit controlled by the Keiser family, Everglades College Inc. Essentially, Keiser sold the left hand of his empire to the right hand.
Robert Shireman has filed an IRS complaint over the details of Keiser University’s conversion to nonprofit.
Committee on Education and the Workforce Democrats
To pay for it all, Keiser made a $300 million loan to himself, and he’s now paying it back with college revenue — with interest.
The records also show that 10 of the nonprofit’s campuses are paying rent to companies in which Arthur Keiser has an ownership interest.
The combined rent for those properties: about $14.6 million.
As I noted above, we don't want to look at just one report in regards to for-profit colleges, so here's another one
From last year an article in Bloomberg News shows that it's not just the feds looking at for-profit collegesDept. of Ed names 20 schools facing financial investigation after
The Department of Education released the names of 20 colleges and career academies after audits of their finances turned up “severe findings.”
Those 20 names round out the list of 544 institutions that have run afoul of Department of Education rules for managing their finances and face one of two levels of increased financial monitoring. More than half are for-profit colleges.
Editorial in NYTimesJan. 29 (Bloomberg) -- For-profit colleges, bruised by years of investigations and rule-making, may face additional financial pressure from a new wave of state probes by attorneys general and the U.S. Consumer Financial Protection Bureau.
Education Management Co., the education chain partly owned by Goldman Sachs Group Inc.; Corinthian Colleges Inc.; ITT Educational Services Inc.; and Career Education Corp. have said since Friday that they’ve received demands for information from a network of at least 12 attorneys general. The Federal Trade Commission has stiffened guidelines for marketing vocational training programs, which many for-profit colleges offer.
The CFPB, created in 2011 to regulate financial products, has said it’s preparing to tackle student debt, which has climbed to $1.2 trillion and is pervasive among former students at for-profit colleges. Richard Cordray, head of the consumer bureau and a former Ohio attorney general, said in written testimony to a House panel yesterday that the bureau has received thousands of complaints and comments about private student loans and debt.
The outrageous part is that these companies are allowed to leech off the federal government, getting as much as 90 percent of their revenue from federal coffers.
The state attorneys general have come to the conclusion that the for-profit sector needs more regulatory scrutiny. But well-paid lobbyists are pushing a different story in Washington, arguing that everything is just peachy as it is. If the federal government falls for that, billions of dollars will continue to be wasted and many more people will come to harm.