Dive Brief:
- Keystone College plans to merge with the Washington Institute for Education and Research in an agreement that would turn the college into a subsidiary of the nonprofit, according to a Friday press release.
- The Pennsylvania-based private nonprofit college said the merger would leave its day-to-day operations and academic mission “essentially unchanged.” The agreement follows a letter-of-intent signed between the two organizations in May after a previous deal fell apart in March.
- “We are extremely fortunate to have secured this new agreement with WIER as it offers Keystone College a viable and more secure future, something that was uncertain earlier this year,” Keystone President John Pullo said in the release.
Dive Insight:
Keystone’s latest agreement with WIER has been more than two years in the making.
WIER was officially founded in 2023 by Ahmed Alwani, an investor and businessman in northern Virginia who also started a nonpartisan think tank focused on global policy.
The nonprofit’s first agreement also would have put Keystone under the WIER umbrella. It would have become the sole member of Keystone but leaving the college’s governing board in charge of academic and administrative affairs.
The new agreement would likewise leave Keystone’s board in place, while its configuration could be subject to feedback during accreditation and regulatory reviews, a spokesperson for the college said.
Keystone didn’t disclose the terms of either agreement or say how the two are different.
After the first agreement fell apart in March, Keystone’s accreditor, the Middle States Commission on Higher Education, tasked the college with filing “substantive change request for institutional closure” paperwork.
At the time, the college maintained this was merely a procedural step — an account that the accreditor disputed.
MSCHE also said in April that the Keystone was at serious risk of closure and issued a show-cause order — typically the final warning before accreditation can be withdrawn — directing the college to prove compliance with its standards.
In May, Keystone said it had signed a letter-of-intent with an unnamed strategic partner — which turns out to have been WIER. The college said then that the letter provided it with a “more secure roadmap for a long-term path forward.”
According to Pullo and the college, the newly announced merger is “better suited to achieving the combined objectives of growing the College and providing a high-quality educational experience to an even broader community of learners” than the previous agreement.
“WIER embraced Keystone’s mission when we started our conversations two years ago,” Pullo said in Friday’s release. “While we mutually decided in March to abandon the previous agreement, we also agreed to continue our discussions. Those talks solidified our collective determination to secure a path forward for Keystone.”
Meanwhile, Keystone, on Aug. 1, submitted a report to MSCHE laying out its case to keep its accreditation and demonstrate compliance with the accreditor’s financial viability standards.
MSCHE’s evaluation of Keystone’s show-cause report will be separate from the accreditor’s review of the deal, though the college included the agreement along with financial details in its report to demonstrate financial viability.
Keystone remains accredited during the process, the college said.
An answer from MSCHE on the show-cause report is expected in November, while reviews by the accreditor as well as state and federal regulators of the merger could stretch into next spring, Keystone said.
Keystone has come under mounting financial stress as its enrollment has fallen. Between 2017 and 2022, Keystone’s fall headcount dropped 25.7% to 1,131 students, per federal data. This summer, the college announced it would cut three academic programs and nearly 30 employee positions to save $3.5 million in its budget.
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