A Washington, D.C.-based nonprofit has assumed ownership of Keystone College, a long-awaited step meant to assure the school’s survival.
As of Friday, Keystone merged into a new controlling entity, Keystone College LLC, which is solely owned by the Washington Institute for Education and Research (WIER), the school said in a news release.
The release said the merger would allow “Keystone to continue operations under its current name and educational mission.” The school did not disclose the merger’s financial and other terms.
Keystone president John F. Pullo Sr. reported the news in a message to faculty, students, trustees and other employees, according to the release.
Pullo described the merger as part of an almost “a three-year journey that at times threatened” the college’s future.
“The fact that we can make this announcement today is a testament to the remarkable commitment and trust that (the institute), especially Dr. Ahmed Alwani, placed in Keystone and to the perseverance, courage, and resilience of the extraordinary group of individuals on the Keystone team who fought through the adversity and took respite in the positive developments as things began to turn our way,” Pullo wrote, according to the release.
Pullo is a WVIA board member.
For the first time, the school issued a news release with comments from Alwani, the 2-year-old institute’s president and founder, who said he’s “delighted and grateful” the deal is done.
“When I was first introduced to Keystone, I realized that it was a special place with a rich history in serving students for whom a college education changes their entire family’s trajectory,” Alwani said. “While we are dedicated to enhancing that mission, we are equally driven to being innovative with respect to the educational opportunities needed for today’s students in all areas, including online, international, and certifications.”
WVIA’s repeated efforts to reach Alwani during the past year, including today, were unsuccessful. Alwani founded the institute in 2023, according to its website.
Keystone's path to today
Like many small colleges, Keystone has long struggled financially. For most of the last 16 years, the U.S. Department of Education has listed Keystone as requiring heightened cash monitoring. That triggers closer scrutiny of finances. The department cares about schools’ financial health because of its financial aid to students.
Keystone suffered with a COVID-19 pandemic loss of enrollment that damaged its finances.
In 2022, the board of trustees named Pullo interim president then the school began seeking long-term solutions.
In January 2023, the board authorized exploring a merger with the institute. The two sides signed agreements a month later. In March 2024, both agreed to pull out because the college’s finances had worsened, according to Keystone’s audit covering the year ending May 31, 2023.
Both continued to talk, but a month later the merger’s end prompted the Middle States Commission on Higher Education to ask the school to begin developing a teach-out plan for students to complete degrees if the school closed.
The commission evaluates schools and offers accreditation to the ones that meet its standards, which allow students to access federal aid for tuition and other expenses.
Keystone characterized the request as normal considering the merger fell apart, but three weeks after requiring teach-out plans the commission said the school was in danger of “imminent closure,” which the school disputed.
The commission gave Keystone until last August to explain why it shouldn’t lose its accreditation.
In late May 2024, Keystone officials announced a letter of intent with an unnamed financial partner that the school months later revealed was the institute. Keystone officials said they presented detailed financial and other plans meant to prove the school’s future viability, but the commission rejected them as inadequate.
In November, the commission withdrew Keystone’s accreditation, effective at the end of 2024, and forbid the college from recruiting new students while appealing the decision. Keystone appealed and hired a law firm with expertise in accreditation.
The commission’s decision prompted the U.S. Department of Education to step up Keystone’s cash monitoring, according to Middle States. That meant the college could no longer automatically draw down federal reimbursements of money paid out of school funds to students for tuition and other costs. The school had to apply for drawdowns first.
In February, as the appeal hearing approached, the commission backed off and restored Keystone’s accreditation. The commission cited a letter from the U.S. Department of Agriculture and new details of the institute deal as reasons for changing its decision, according to Middle States. Neither factor was known to the commission when it decided to withdraw the accreditation, the commission said in its statement. The Department of Agriculture sometimes offers loans to rural schools.
Once the commission restored Keystone’s accreditation, the Department of Education allowed the school to automatically draw down federal aid again.
The commission February decision essentially returned Keystone to its status before its accreditation was withdrawn.
While the commission has accepted the merger with WIER, Keystone must continue to explain why Middle States shouldn’t withdraw accreditation.
In a notice the commission posted on its website Thursday, Keystone must provide:
- A report on the merger’s progress by Sept. 2.
- Written approvals of the merger by the state attorney general’s office and the U.S. Department of Education.
- Evidence of “a comprehensive financial planning process” that includes a multi-year budget, annual independent audits that verify financial viability and internal financial controls and a “documented funding base adequate to support the educational purposes and ensure financial stability.”
- Evidence of planning that integrates goals for institutional effectiveness, including overall improvement and efforts to expand international recruitment.
- An update on recruiting a qualified chief financial officer. The school’s last financial officer was suspended in February 2024 for undisclosed reasons with Keystone saying it cooperated with an independent investigation. The attorney general’s office acknowledges receiving a referral of the matter from Wyoming County’s district attorney, but has declined to comment further.
- Evidence the school is part of a national council that regulates distance learning.
- Evidence the school implemented a written conflict of interest policy to ensure the impartiality of its board of trustees.
- A governance structure, “clearly articulated and transparent,” that “outlines roles, responsibilities, and accountability for inclusive decision making by each constituency, including the institution's legally constituted governing body and any related entities.”
Keystone must also allow the commission to visit to review the merger by the end of November.
