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Private universities are quietly being bought out

July 30, 2018 by Ben Caldwell

Brodie Vissers / Burst / Used under licenseIn the world of private education, it isn’t uncommon for universities to be bought and sold. But recent years have seen a spike in the acquisition of private universities offering graduate degrees in mental health fields. Many students may not even be aware that their universities are now parts of larger corporations.

Three specific companies serve as case examples.

TCS Education System

TCS Education System is the parent of The Chicago School of Professional Psychology, which expanded into Los Angeles about a decade ago. That expansion included the addition of two campuses through a buyout of what had been the California Graduate Institute. Since then, TCS has quietly gobbled up a handful of other private universities, including two more that had been offering mental health degrees: Saybrook University in Oakland, and Pacific Oaks College in Pasadena.

National University System

Meanwhile, the National University System is similarly expanding in part through acquisitions. That system now includes the namesake National University, in addition to John F. Kennedy University and newly-acquired Northcentral University. Northcentral, notably, was the first primarily-online program to earn COAMFTE accreditation for its MFT program.

Bertelsmann

Finally, there’s Alliant International University, where I worked as core faculty for 11 years. Alliant’s story is interesting in part because the multi-university network it was supposed to join never really materialized. Alliant is now owned by international multimedia conglomerate Bertelsmann, through its Arist Education System. From the outside — and I’ve been gone long enough that I really don’t have any inner knowledge here — it looks like the plan was for Arist to develop a network of universities around the world with a focus on health care degrees. But it never happened. Arist’s last news on its web site is from 2015, and Bertelsmann’s education division appears focused largely on its more scaleable online investments, such as Udacity.

Whether these acquisitions are good or bad is debatable, and I’m not here to stake a flag on that debate. A number of the private universities named here had little to no endowment funds. That leaves them (or, left them, prior to their being acquired) so tuition-dependent that they would struggle to make ends meet even with high tuition rates and regular tuition increases. And a single year of decreased enrollment could leave any of them teetering on the brink of bankruptcy.

Becoming part of a larger educational network, or otherwise being acquired by a well-funded corporate parent, provides a private, tuition-dependent university with financial stability and business-minded leadership. These networks and acquisitions have allowed several universities to keep their doors open when they otherwise might have had real problems doing so.

At the same time, these networks and acquisitions risk stripping universities of their unique identities. Those universities can then lose what brought students in to begin with, as the impacted universities become increasingly shaped by their corporate parents. That can be an unintended consequence of strong financial leadership: The things these universities did that made them unique may not have been particularly profitable.

When it comes to universities and the corporations that govern them, “big” is not necessarily “bad.” Big universities and university systems can do some things well that smaller universities struggle with. (In-house support for research is a common example.) But the reverse is also true: Smaller universities can do some things well that bigger universities struggle with. (Smaller universities are often able to change and innovate quickly.) And as these networks quietly grow, students may have a harder time knowing exactly which category their own school falls into.

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