For-profit DeVry University is getting a new owner: a Silicon Valley company
DeVry University, one of the nation’s largest remaining for-profit college chains, is getting a new owner.
The chain’s parent company, Illinois-based Adtalem Global Education Inc., plans to transfer ownership of DeVry University and its Keller Graduate School of Management to Silicon Valley-based Cogswell Education, according to a news release. The deal, which still needs regulatory and accreditor approval, is expected to close in 2018.
No money is to change hands when the deal closes. Instead, the release said, Adtalem will inject working capital into DeVry and be paid out over the next few years based on DeVry’s performance.
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The announcement comes about a year after DeVry University agreed to pay $100 million to settle a Federal Trade Commission lawsuit alleging it misled tens of thousands of students about their post-graduation job and income prospects. Separately, in January, the company agreed to settle an investigation in New York into misleading advertising.
Adtalem President and Chief Executive Lisa Wardell said that by transferring ownership of DeVry and Keller, the company can focus more on its remaining institutions. Those include Chamberlain University, which recently expanded degree offerings and changed its name from Chamberlain College of Nursing, and healthcare-focused Carrington College.
“We will work closely with Cogswell Education over the coming months to finalize the transfer of ownership and ensure a smooth transition for DeVry University, its colleagues and students,” Wardell said in the release.
As of June 30, DeVry University had about 1,100 full-time staff members, according to a Securities and Exchange Commission filing. Enrollment numbers in September at DeVry and Keller totaled more than 26,000 students, Adtalem spokesman Ernie Gibble said. The new ownership is not expected to affect degrees students have earned or are earning, and no tuition changes are planned as a result.
Adtalem has more than 130 campuses globally, including 90 in the U.S., Gibble said. DeVry accounts for more than 50 of those U.S. campuses and has online offerings.
A Cogswell spokesman did not immediately respond to a request for further comment. Cogswell Education owns the for-profit Cogswell College, which focuses on entrepreneurship, digital art and technology, according to its website.
For-profit colleges came under scrutiny during the Obama administration, which targeted inflated job-placement claims and predatory lending practices. Government investigations and sanctions have led to closures of several for-profit college chains, including California-based Corinthian Colleges, which sold or closed most of its 107 campuses and liquidated its assets through Chapter 11 bankruptcy in 2015, and ITT Technical Institute, which closed its more than 130 campuses last year.
DeVry, which denied allegations of wrongdoing in the FTC case, has faced campus closures amid sliding revenue, though Adtalem has expanded globally. According to a report filed with the SEC in August, DeVry had reduced its footprint by 22 locations since June 30, 2015.
In May, Adtalem changed its name from DeVry Education Group and debuted a new ticker symbol, ATGE, on the New York Stock Exchange.
Marotti writes for the Chicago Tribune.
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