Last year, an “extremely enthusiastic” charitable nonprofit foundation based in India approached Education Management Corp. with an offer.
Hoping to break into the United States, the Ritnand Balved Education Foundation wanted to buy the Pittsburgh for-profit education provider’s two largest art institutes — the New England Institute of Art, in Brookline, Mass., and the Art Institute of New York City — and keep them open as nonprofit institutions, according to letters and emails exchanged between EDMC and Massachusetts education officials.
EDMC had announced in May 2015 that it would eventually close those schools and about a dozen others.
But the Massachusetts Department of Higher Education expressed skepticism about the proposed deal. After a meeting with the department in July, EDMC faced a torrent of questions from officials about how the new owner would operate the New England school and how students and curriculum would be affected. In November, EDMC notified officials it had abandoned the sale.
Now, Pittsburgh-based EDMC is pursuing much larger transaction: a sale of all of its schools that are still accepting students to the Dream Center Foundation, a Los Angeles-based philanthropic organization affiliated with a Pentecostal church that funds programs across the country for underprivileged people.
Analysts said the proposed deal — including 31 Art Institute schools, as well as the South University and Argosy University educational systems — is sure to come under scrutiny from the government regulators as well as the institutional accreditation agencies tasked with approving it.