"DeVry University was once among the largest for-profit institutions in the country and the crown jewel in its parent company’s collection," Inside Higher Ed reports.
"But enrollments have fallen and the for-profit institution has seen multiple lawsuits over advertising, recruitment and job placement.
Now DeVry’s parent company -- Adtalem Global Education Inc. -- is transferring ownership of the institution, along with Keller Graduate School of Management, to Cogswell Education LLC. DeVry and Keller together enroll nearly 30,000 students. Cogswell is the owner of Cogswell College, a California-based private for-profit institution of about 600 students, that specializes in art, game design, music and software engineering.
No money is changing hands in the deal, which still requires regulatory and accreditor approval.
Both critics and advocates of for-profit colleges say Adtalem management had been signaling for at least a year that the company wanted to divest DeVry.
'Given that the asset is at break-even and declining, selling for zero is also not surprising,' said Trace Urdan, managing director at Tyton Partners and a longtime analyst of the for-profit sector, via email. 'If the alternative is an expensive teach-out, then simply getting it off the books is a win.'
The transfer agreement includes a provision that Adtalem could earn up to $20 million over 10 years if DeVry’s cash flow maintains certain levels.
The move continues a shift in for-profit institutions moving from publicly traded status to a different or private status. A nonprofit missionary organization, the Dream Center, is purchasing Education Management Corp., and Purdue University is acquiring Kaplan University in an effort to create a new nonprofit online university.
'We’re seeing the large publicly traded for-profit colleges change their image over the last few years in some way or another,' said Tariq Habash, a policy associate at the Century Foundation."
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Publication Date: 12/7/2017