Nonprofit Chain from India Expands to U.S.

BROOKLINE, Mass.— One of India’s largest colleges is expanding into the U.S. with the purchase of one campus in New York and a proposal to buy two more, drawing opposition from state officials in Massachusetts about the quality of the education it will offer.

Dozens of U.S. colleges have opened overseas campuses, but few foreign schools have sought to establish branches in the United States, in part because of the cost and tighter regulation. Amity University, a system of private colleges based in New Delhi, has long sought to create a global network of schools, however.

Since it was founded in 2003, the chain has opened campuses in India, England, China, South Africa and five other countries.

Add the U.S. to that list.

Amity paid $22 million last month to buy a Long Island branch of St. John’s University in New York City, which was selling the campus and shifting to a smaller site on Long Island. Amity plans to open its first U.S. branch at the 170-acre, century-old campus after it gains ownership in June 2017.

The chain also has made a deal to buy the New England Institute of Art, a for-profit college near Boston, and one of its sister schools, the Art Institute of New York City, according to paperwork filed in Massachusetts. The deal would require approval from state education officials.

“We are very, very skeptical about this,” said Massachusetts Attorney General Maura Healey, who is asking the state’s Board of Higher Education to block the sale. “It’s hard to imagine that this outfit from overseas, which has never done any education work here in this country, is well-suited to provide any kind of education to these students.”

Amity hopes a U.S. campus will attract students from abroad who want to gain the prestige that comes with studying in the United States. It also hopes to forge research partnerships with other colleges, and to connect foreign scholars with their counterparts here.

“We have a global vision for education, a model of education which allows for student mobility, faculty collaboration and research collaboration,” said Aseem Chauhan, Amity’s chancellor. “We believe that the leaders of tomorrow will be those who have perspectives from different parts of the world.”

Owned by a nonprofit company, the chain offers bachelor’s and graduate degrees in a range of fields, from art to engineering. It enrolls 125,000 students at more than a dozen campuses, and has grown rapidly amid rising demand for higher education in India.

Its founder president, Ashok Chauhan, was charged with fraud in the 1990s by authorities in Germany, where he ran a network of companies. He returned to India and was never extradited. A plastics company in the U.S. also sued Chauhan in 1995 for failing to pay $20 million in debts, which led to an ongoing court battle in India. The university is now in the hands of his sons, Aseem Chauhan and Atul Chauhan.

Some in the U.S. say the school is more similar to a for-profit college than a traditional four-year university.
“They are a subsidiary of a conglomerate of companies,” said Barmak Nassirian, director of federal relations and policy analysis for the American Association of State College and Universities. “This is by no means reassuring, if you ask me.”

Aseem Chauhan counters that Amity has an “excellent and exceptional” track record of student outcomes, although he declined to provide the statistics.

The school’s leaders have been eyeing a U.S. expansion for years. In 2011, Amity was one of seven colleges that entered a competition to build an engineering campus in New York City. Cornell University and a school in Israel ultimately won. In 2014, Amity filed paperwork to open a nonprofit school in California, tax records show, but never opened a campus.

Amity has been pushing for U.S. expansion while some traditional schools close because of dwindling enrollment, and as many for-profit institutions seek buyers amid increasing federal regulation and oversight.
“The for-profit market is really wide open right now,” said Kevin Kinser, a professor of education policy at Pennsylvania State University. “An institution with a lot of resources might see this as a cheap opportunity to get a foothold in the industry.”

Chauhan wouldn’t discuss Amity’s proposed purchase of the two for-profit schools, and neither would the company that’s selling them, the Pittsburgh-based Education Management Corporation. But both sides signed a letter to Massachusetts education officials in July outlining the “anticipated acquisition” by Amity.

They say the sale would save the New England Institute of Art, which started making plans to close last year after half a decade of steep enrollment and revenue losses. The institute has stopped adding new students, and many others have left. Some former students are now planning to sue the institute for fraud.

Massachusetts education officials have requested more information from Amity about the proposal.

Even if it’s approved, Amity could face a long road before it starts work in the U.S. To begin granting degrees, it would need approval from a U.S. accreditor, often a rigorous process. And to receive federal financial aid for its students, it would have to be screened by the U.S. Department of Education.
Still, Chauhan said he’s ready to make his case.

“We continuously benchmark our quality with the best quality standards and the best accreditation standards globally,” he said.

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