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Private equity is benefitting from UPR’s demise, professors say


In 2012, Renovus Capital Partners acquired EDIC College, a privately owned for-profit college, in the sixth largest private equity acquisition in postsecondary education between 2007 and 2019.

By The Star Staff


Private equity is benefitting from the shrinking and deterioration of Puerto Rico’s 11-campus public university system, two university professors have charged.


Rima Brusi, a former University of Puerto Rico (UPR) professor and Ricardo Fuentes, an assistant professor at UPR Mayagüez, said for-profit colleges and universities are benefitting from UPR’s slow demise. As reported by the STAR, the latest audited report from UPR shows it is dragging a deficit of well over $2 billion.


In spite of the decrease in the birth rate and increased migration trends in Puerto Rico that have lowered the number of residents enrolling in college by 20 percent between 2013 and 2020, for-profit institutions were the least affected, with a reduction in enrollment of only 7 percent, the academics said in a report published April 22 by the Century Foundation, an independent think tank that conducts research.


“In contrast, during the same period, enrollment in private nonprofits decreased by 27 percent, and in public universities by 15 percent,” they said. “And while for-profit universities accounted for only 4 percent of all graduate enrollment in Puerto Rico in 2013, this figure had more than doubled, to 10 percent, by 2020.”


Currently, more than one in five college students in Puerto Rico is enrolled at a for-profit college.


“Current data from NCES (as of March 6, 2022) indicates that, in total, there are 157 campuses offering some kind of post-secondary degree in Puerto Rico, and they enrolled 194,589 students in fall 2020. Of these campuses, 88 are for-profit, and together these enrolled a total of 44,200 students,” the researchers said. “By our count, 25 of the 88 for-profit campuses belong to one of the three private equity firms discussed above (Leeds, Rendezvous and Arist), and together, these have a combined enrollment of 30,013 — over two-thirds of the students attending a for-profit in Puerto Rico, and one out of every seven college students there.”


The remaining 63 for-profit schools enroll relatively fewer students, and the majority 56 are technical/career colleges offering only certificates, and in some cases associate degrees, that traditionally have not competed with the public university, where students enroll seeking a four-year degree or higher.


The for-profit universities have been growing despite Puerto Rico’s bankruptcy or as a result of it, they said.


A “particularly visible player” in Puerto Rico’s for-profit sector is NUC University, which recently changed its name from National University College to highlight its “university” status, despite having largely conferred only two-year associates degrees and vocational certificates for most of its existence. NUC has gone on an advertising binge, the report said, with frequent television and newspaper ads, and numerous billboards of all sizes in the main streets of towns such as Mayagüez, including two large banners right next to and across the street from the UPR campus’s main entrance. NUC University has absorbed some other, older for-profit institutions on the island, including specialized colleges that offer one or two-year degrees in health or technical fields, such as Ponce Paramedical College (POPAC), and Instituto de Banca (IB). The resulting bundle was purchased in 2007 by the private equity firm Leeds Equity, which has at least 19 campuses in Puerto Rico, and additional campuses in Florida (Florida Technical College and DAVE–Digital Animation and Visual Effects) and others.


Leeds may be the main stateside firm investing in for-profit educational institutions in Puerto Rico (and the second most-prolific in the United States, according to some reports), but it is certainly not the only one. For example, in 2012, Renovus Capital Partners acquired EDIC College, a privately owned for-profit college — the sixth largest private equity acquisition in postsecondary education between 2007 and 2019. In spite of Puerto Rico’s 2016 bankruptcy, Renovus doubled down and increased the size of its for-profit education portfolio in 2020, merging EDIC with Columbia Central College, a previously privately owned for-profit specializing in health sciences, the researchers wrote.


A third private equity firm operating in Puerto Rico is Arist Education, which in 2014 purchased the nonprofit medical school Ponce Health Sciences University, turning it into a for profit school managed by a firm called University Ventures.


“The context in which Arist made this investment in Ponce Health Sciences University is particularly intriguing. Between 2017 and 2021, University of Puerto Rico’s budget was slashed by half, and its health and medical sciences campus — where 100 percent of students from programs such as internal medicine and nursing routinely pass their board exam on the first try, and where most of the doctors in Puerto Rico have started or completed their careers — was hit particularly hard by cuts,” they said. “The reduction in funding was so severe at UPR’s health and medical sciences campus that one of its programs, neurosurgery, recently lost its accreditation simply because it did not have the funds needed to pay for basic resources, such as faculty and equipment.”


With UPR’s prestigious health and medical sciences campus reeling from budget cuts and unable to maintain past programs and enrollment, Ponce Health Sciences University is poised to take advantage, they said.


“So, while the FOMB [the Financial Oversight and Management Board], the Puerto Rican government, and even some academic administrators cite population loss and demographic changes as one of the main reasons behind cut to the public university and the closure of hundreds of public schools, private equity investors seem to have been confident in finding enough student clients to make a profit,” the professors wrote.

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