Several large nonprofit universities have expressed interest in purchasing for-profit Ashford University, potentially following the controversial playbook of the 2017 takeover of Kaplan by Purdue.
Ashford University is in limbo. The predominantly online institution announced its intention to convert from for-profit to nonprofit in March 2018. Now, more than a year later, the transition is still unfinished.
The Internal Revenue Service and Ashford’s accreditor, the Western Association of Schools and Colleges Senior College and University Commission, gave the university the green light to become nonprofit earlier this year. But a review by the U.S. Department of Education has been ongoing for several months. This week, the results of the review came in.
To complete the conversion of Ashford to a nonprofit, the department is requiring a letter of credit equal to 25 percent of the Title IV funding the university received during 2018 — approximately $103 million. The letter of credit is a guarantee that can be used to protect students and taxpayers should the university become unable to repay the money it owes the government. Similar conditions were imposed when the University of Phoenix changed owners in 2016.