For-profit colleges in US look to explore restructuring options in face of tightening restrictions

January 7, 2016

A decline in the power and value of US for-profit colleges has led some institutions to convert to non-profit status to help cope with a changing economic and legislative landscape. At the height of the for-profit college growth in 2010, these colleges enrolled more than one in 12 US students attending a degree-granting institution; yet this number has fallen by 26% since then. The introduction of the “gainful employment” rule has also led to funding penalties to for-profit colleges whose students do not fare well enough on the job market. Some prominent for-profit institutions like Herzing University have made the transition to non-profit status to secure better government funding. Others have transitioned into legal entities known as “benefit corporations,” which are protected from liability if shareholders pursue a public good at the expense of profits. Chronicle of Higher Education (Subscription Required)