Processes for Seeking Approval of Change of Control, Structure or Organization

The Higher Learning Commission Board of Trustees (the “Board”) will make all decisions regarding approval of applications for Change of Control, Structure or Organization taking into consideration a Change of Control report developed as a result of the evaluation of any such application. For such Change of Control evaluations, HLC staff may require an on-site visit to gather evidence about the proposed Change of Control, Structure or Organization.

The Board may act in agreement with any recommendation put forward in a Change of Control report (if one is made) or the Board may develop and act on its own recommendation. The Board may elect to provide the institution with thirty days to respond to any recommendation the Board develops before the Board takes final action.

The Board may approve the application, thereby authorizing the continuation of accreditation for the institution subsequent to the close of the transaction, or it may deny the application. The Board may defer its consideration of the application to the next Board meeting date pending receipt of additional information or action by a third party such as the state or another recognized accreditor.

The Board may approve the application subject to certain conditions. Such conditions may include, but are not limited to, limitations on new educational programs, student enrollment growth, development of new campuses or sites, etc. Related to these conditions, the Board may require that it review and approve certain changes at the institution prior to their inception. The institution and other parties involved in the transaction have 14 days after receiving the Board’s action letter to indicate in writing the acceptance of these conditions. If the institution and the other parties do not respond in writing or decline to accept the conditions, the Board may immediately act to rescind its approval. Under such circumstances, the parties to the Change of Control, Structure or Organization may not act to consummate the Change of Control contemplated by the Change of Control application until accepting in writing the Board’s conditions, if any. A Change of Control consummated after failing to accept the Board’s conditions shall be treated as not having received prior HLC approval under these policies and the resulting institution’s accreditation may be withdrawn.

The Board reserves the right to delegate to a Board subcommittee, prior to the decision by the full Board, the reviewof any Change of Control application, and that subcommittee may make a recommendation to the full Board regarding the decision on such application.

The Board’s action to approve a Change of Control, Structure or Organization application may designate an effective date of approval provided that such date will be not later than 30 days from the date of the action. The Board’s approval will expire if the transaction is not consummated by the date designated. In the absence of a designated effective date, if the institution does not consummate the Change of Control within the 30-day period following approval, the Board’s approval will expire. In the event that the Board’s approval expires, the institution must notify HLC and seek a revised effective date for the Board’s approval, which may involve providing additional information to HLC and another action by the Board of Trustees. Any consummation of a transaction without a valid Board approval in place constitutes a Change of Control, Structure or Organization Without Prior HLC Approval as set forth in these policies.

Evaluative Framework for Change of Control, Structure or Organization

Among multiple factors considered in determining whether to approve a particular application, the Board shall weigh the following five key factors:

1. Whether the proposed change represents the extension of the mission, educational programs, student body and faculty that were in place when HLC last conducted an on-site evaluation of the member institution;
2. The on-going continuation and maintenance of the institution that has historically been a member of HLC with regard to its objectives, outreach, scope, structure, and related factors;
3. Substantial likelihood that the institution, including the revised governance and management structure of the institution, will continue to meet HLC’s Eligibility Requirements, and will continue to meet, or meet with concerns, the Criteria for Accreditation;
4. Sufficiency of financial support for the transaction; and
5. Previous experience in higher education and accreditation, qualifications, and resources of new owners, Board members or other individuals who play a key role in the institution or related entities subsequent to the transaction, as well as such parties’ record of integrity in dealing with students, the business community, agencies of government or other accreditors.

If the Board determines in its sole discretion that the application does not meet one or more of the five key factors, the Board will not approve the proposed Change of Control, Structure or Organization.

The Board reserves the right to deny an application based on other evidence unrelated to the five key factors, provided the Board signals its intent to the institution submitting the application, articulates its rationale and makes such evidence available to the institution for response. An institution shall have 30 days to respond to notice of the Board’s intended action.

The Board may also renew or maintain the institution’s eligibility for its existing pathways assignment or place the institution on a different pathway.

Other Board Options

The Board may act, prior to approving the proposed Change of Control, to require additional review through the Eligibility Process or through a Fact-Finding Review, which may be an additional such Review, conducted by peer reviewers or by other higher education, legal or accounting professionals. The review shall be conducted within 60 days of the Board’s action requiring such review, and the results shall be available to the Board at its next regularly scheduled or special meeting. The institution will have seven days to respond to the report prepared for the Board prior to the Board’s meeting.

In cases in which the Board decides, in its sole discretion, that the proposed transaction builds a new institution bypassing HLC’s established policies for seeking accreditation, the Board shall not approve the Change of Control, Structure or Organization.

Evaluations Related to Change of Control, Structure or Organization

Change of Control Evaluation. Evaluations conducted under this policy, which may involve an on-site visit in addition to a documentary review, shall be conducted in accordance with HLC’s published Change of Control procedures prior to any Board decision regarding a proposed Change of Control, Structure or Organization. The role of such evaluations will be to determine the extent to which the Change of Control application meets the Key Factors for approval articulated in this policy.

Additional Requirements for Certain Transactions Constituting a Merger or Consolidation

A Change of Control, Structure or Organization involving the acquisition and subsequent merger or consolidation of an institution within the accreditation of another institution may be subject to additional requirements as set forth in this policy and HLC’s Change of Control procedures. 

When a member institution is being acquired and subsequently merged or consolidated into the accreditation of another institution, prior review and approval of the acquisition under these policies is required. Following approval of the acquisition, in addition to other requirements outlined in HLC policy, the acquired institution shall be placed on “Accredited Change of Control” status as set forth in HLC policy until resignation of membership or the Board removes the institution from that status. 

When a member institution seeks to acquire and subsequently merge or consolidate another institution into its structure, the institution must first undergo prior review and approval of the acquisition. After review and approval of the acquisition, the institution may then seek subsequent approval of the merger or consolidation of the acquired institution into the accreditation of the member institution as set forth in HLC procedure.

Policy History

Last Revised: June 2023
First Adopted: June 2009
Revision History: February 2010, February 2012, June 2012, June 2015, February 2017, November 2018, November 2019, November 2020, February 2022, November 2022, June 2023
Notes: Policies combined November 2012 – 3.3©, 3.3(c)1, 3.3(c)2, 3.3(c)3, 3.3(d), 3.3(d)1. In February 2021, references to the Higher Learning Commission as “the Commission” were replaced with the term “HLC.” Policy renumbered in June 2023 (former policy number INST.F.20.070).