Lots of schools are changing hands. Buyers and sellers are abound! Looking to sell? Looking to buy? Maybe you’re contemplating retiring? It happens all the time, and if you’re a school owner, you can’t afford not to understand the basics of a Change in Ownership (CIO) and what the U.S. Department of ED requires. School sales (a change in ownership that results in a change of control) are often contingent on the new owner securing approval from ED. Fail to get ED’s approval or fail to submit all of the required documentation within 10 days of the change and the new owners risk an interruption in Title IV eligibility. If ED doesn’t approve the CIO, the whole deal can fall apart faster than a cheap bookshelf. That’s why you need a preacquisition review.
A preacquisition review allows a prospective school owner to get a guaranteed response from the School Participation Team in your region alerting you to anything that needs to be addressed, including deficiencies (like audited financials) and conditions (like a required letter of Credit) for the new owners, before the application is considered approvable. Save time, save money and avoid last minute surprises.
A preacquisition review must be submitted at least 45 days prior to the sale. Sometimes these sales move quick, too quick for a preacquisition review, but build this into your timeline and you’ll be sitting pretty whether you’re a buyer or a seller.
And don’t forget – a whole bunch of new rules take effect 7/1/216…Are you ready?
Got questions? Need help? Let’s Talk!
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