Higher-Education Firms Reap Windfall

For-profit higher-education companies are buying up financially struggling nonprofit and religious colleges in a bid to continue the rapid growth they have seen by tripling their enrollment and revenue in the past decade, Bloomberg reports.

Companies such as Indiana’s ITT Educational Services and Baltimore’s Laureate Education have taken over at least 16 nonprofit institutions since 2004, instantly obtaining those schools’ valuable accreditation. That status, which typically requires a five-year evaluation process, allows the for-profit firms to enroll students who get federal financial aid, creating a potential revenue windfall.

Tiny schools with enrollments that numbered in the hundreds have added tens of thousands of students after being taken over by for-profit investors in recent years, with the vast majority of those students taking courses online.