This morning, Rep. Bobby Scott (D-VA), chair of the House Education and Labor Committee, called on the U.S. Department of Education to reconsider the non-profit status of Florida’s Keiser University and its parent institution, Everglades College, after a review by the Committee found that school president Arthur Keiser and other insiders have received millions of dollars in income from those institutions.

A grant of non-profit status by the Department of Education allows a school to avoid some of the federal regulations that apply only to for-profit schools, such as the 90-10 rule requiring for-profits to obtain at least ten percent of their revenue from sources other than the federal government. Non-profit status also helps a school escape the stigma that deceptive and predatory behavior by many for-profit colleges has created for that industry. 

Keiser University converted from a for-profit college to non-profit in 2011 in a troubling deal that allowed large revenues for Keiser, family members, board members, and related businesses. Keiser University is a career college chain, with programs ranging from health care to business, criminal justice to culinary arts. It  currently has some 19,000 students at campuses across the entire state of Florida.

In a letter to the Department, Rep. Scott wrote, “the owner and the owner’s family, substantially benefit from the earnings of the institution in violation of the principles of what makes an institution a nonprofit. Dr. Keiser, his family members, and related businesses have received millions of dollars since 2011 from loan payments, rental properties, and contracts to provide goods and services to Everglades College, including at above fair market values.” 

In recent years, the Department has rejected two applications of for-profit school operations — the Center for Excellence in Higher Education in 2016 and, in 2019, Grand Canyon University — to be treated as non-profit, even though the Internal Revenue Service previously recognized each institution as a 501(c)(3) non-profit organization. In each case, the Department concluded that the school and its former owners were too closely tied.

At Rep. Scott’s request, the Government Accountability Office examined the issue of for-profit college conversions to non-profit, and in December 2020, the GAO issued a report identifying significant concerns and calling on the Department to improve oversight. Rep. Scott’s committee subsequently held a hearing examining the issue, and in June 2021 Scott called on the Department of Education and the Internal Revenue Service to “take steps to reform their processes and halt the approval of all conversions until they finalize those reforms.”

In August 2020, Republic Report published an extensive investigative report describing numerous troubling issues at Arthur Keiser’s schools. Relying on accounts from more than fifteen current and former Keiser officials and employees, as well as Keiser students, we wrote about the overlap of personnel and resources between non-profit Keiser University and Keiser-owned for-profit Southeastern College; about questionable business dealings between Keiser University and the Keiser family and other board members; about recruiting abuses and academic failings at Keiser schools; and about law enforcement problems for the school and personal misconduct by Keiser officials. 

In February 2021, we followed up with a report on Keiser’s growing influence on another non-profit school, St. Andrews University in Laurinburg, NC. 

The wealthy Arthur Keiser has long been a powerful political figure not only in Florida but also in Washington, where he has been a dominant figure in the career college trade group CECU and has, through campaign funding largesse, commanded the allegiance of numerous members of Congress. Keiser was also appointed by House Republicans to the Department of Education advisory committee on college accreditation, NACIQI, and now serves as the chair of that body.