Proceed with Caution! Important Changes to Regulations on Changes in Ownership and Financial Responsibility

Faegre Drinker Partner Jonathan Tarnow presented at the 2022 California Association of Private Postsecondary Schools (CAPPS), participating in a session titled “Proceed with Caution! Important Changes to Regulations on Changes in Ownership and Financial Responsibility.” Jonathan and his fellow panelists examined important regulatory changes, as the U.S. Department of Education (ED) has been applying various and often-unwritten rules and policies over the last two decades related to changes in ownership, including required documentation and the financial responsibility standards applied to transactions. As part of its latest rulemaking processes, ED has formalized many of these previously unwritten standards, which should provide greater transparency, but it also expanded the list of events that can constitute a change of ownership or control requiring approval for continued Title IV eligibility. Further, proposed changes to financial responsibility requirements could materially impact transaction structures and financing.