Changing Higher Ed Key Regulatory Changes Impacting Higher Ed M&A
Recent changes in the Education Department's regulations are reshaping mergers and acquisitions in higher education. These regulatory modifications, coupled with new negotiated rulemaking, are affecting not only the dynamics of institutional changes but also the roles of accreditors and state authorization bodies.
Drumm McNaughton welcomes Mike Goldstein, Managing Director of the Center for Higher Education Transformation at Titan Partners, to discuss significant regulatory changes in the field of higher education.
Key Discussion Points:
New Regulatory Landscape:
- Exploration of the Department of Education's recent regulatory changes and their impact on higher education institutions' merger and acquisition activities.
- The critical distinction between ownership and control in the context of these regulatory changes.
Impact on Institutional Dynamics:
- Insight into different models of mergers and acquisitions, illustrated through real-world examples.
- Discussion on the economic challenges faced by private, non-profit institutions leading to increased merger and acquisition activities.
Federal Government's Role and Intentions:
- Analysis of the federal government's objectives in implementing these regulations, focusing on student protection and institutional accountability.
Negotiated Rulemaking and State Authorization:
- Discussion on the details of the new rulemaking process and its implications for accreditors and state authorization.
- Mike Goldstein's perspective on the increasing scrutiny and expectations from regulatory bodies.
Three Key Takeaways for Higher Education Presidents and Boards
1. Explore Mergers and Acquisitions When Beneficial
If a school can benefit from merging with, being acquired by, or acquiring another institution in terms of its educational mission, community service, or finances, it should confidently consider such options.
2. Proceed with Caution and Strategic Partnership
It is crucial to choose partners carefully. Institutions should merge or acquire only if it leads to mutual benefits such as scale, management efficiency, or program diversity. Avoid merging failing institutions as it only leads to a larger failing entity.
3. Ensure Professionalism and Meticulous Planning
Mergers and acquisitions in higher education require sophisticated handling of legal, financing, and academic issues. Professional guidance is essential to navigate these complexities and to model successful institutional mergers.
Final Thoughts
As we navigate these pivotal regulatory changes, it's clear that their impact goes beyond mere compliance. These shifts represent a transformative moment in higher education, prompting institutions to rethink their strategies around mergers and acquisitions. The implications are profound, potentially reshaping the very fabric of higher education as we know it. Institutions must not only adapt to these changes but also seize the opportunities they present for innovation and sustainable growth.
Read the transcript on our website →
About Our Podcast Guest
Michael Goldstein is the Managing Director of the Center for Higher Education Transformation at Titan Partners. Mike is a pioneer in the development of the legal environment in higher education and a counselor at the highest levels of legislation in higher education.
He initiated the New York City Urban Corps, the first major intern program for less affluent students, funded through the Federal Work Study Program. This led to similar nationwide initiatives, supported by the Ford Foundation.
In New York City government, Goldstein served as Assistant City Administrator and Director of University Relations, later joining the University of Illinois Chicago as Associate Vice Chancellor for Urban Affairs and Associate Professor of Urban Sciences. In 1978, he moved to Dow Lohnes law firm in Washington, DC, creating a new legal practice focusing on higher education.
By 2014, under his leadership, this practice, now part of Cooley LLP, was one of the largest and most respected in the U.S. Goldstein pioneered alternative postsecondary education delivery methods, including significant reforms for online learning. He's received numerous awards for his contributions to adult learning.
Goldstein, a Cornell University and New York University School of Law alumnus, also held a Loeb Fellowship at Harvard's Graduate School of Design.
About the Host
Dr. Drumm McNaughton, host of Changing Higher Ed®, is a consultant to higher education institutions in governance, accreditation, strategy and change, and mergers. To learn more about his services and other thought leadership pieces, visit his firm’s website: https://changinghighered.com/.
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