Two For-Profits Yield One Non-Profit – How?

About two weeks ago, Bridgepoint Education, a for-profit educational institution operated in the United States of America, made publicly clear that it would legally combine the University of the Rockies and Ashford University, both of which are for-profit subsidiaries of Bridgepoint Education, into a… non… profit?

Such changes have been historically surrounded by controversy throughout their short history. Why is it controversial, or at least considered to be controversial, or inappropriate by some?

For-profit institutions of higher education are owned by a single person, a group, or an entity designed to make money. Under United States law, they’re subject to far stricter regulations than their nonprofit counterparts.

Nonprofit schools are typically subject to substantially looser regulations, resulting in more revenues, profits, and everything else financially advantageous a businessperson could think of.

According to Bridgepoint Education itself, here’s how the financing and other benefits of the deal will work out for both profits: Bridgepoint Education gets financially compensated for forking over Ashford. Further, Bridgepoint gets more cash revenue through “negotiated services,” which the parent company will give Ashford under a brand-spanking-new contract.

Although nothing is certain until experts can monitor the actions and behaviors of Bridgeport College’s conjunction of its two subsidiaries, it’s true that its owners could rake in countless individual benefits as business owners from initially owning the institutions of higher education.

Only time will tell the results of the transaction.

April 16, 2018

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