How do you start your own college?
First and foremost, you are posting in an entrepreneur section,
which is the right place because this is an incredible challenge
that will test your entrepreneurial ability to survive. The
greatest challenge is surviving in a highly regulated business
environment with rules by which other businesses are not
constrained. You will also need sufficient funding, or funding
guarantees, which is an entirely separate topic beyond this scope.
That said, the mechanics are as follows:
You will first need to obtain a license from the board of
education in the state of operation. The official regulatory body
is usually a commission for private colleges and schools under the
state board of education. Applications can be obtained from each
The license process is comprehensive for a reason - to protect
students. Generally the license requires that you demonstrate
viability from an academic, infrastructure and financial
standpoint. Therefore, the license application will require
information on academics (curriculum, faculty, etc.),
infrastructure (facilities, staff), finances (sufficient financial
resources, budgets and financial plans), institutional planning,
Once the license is approved that is just the beginning. You
would open under some provisional approval. You must have
sufficient resources and plans for marketing (who will attend your
school and why, and how do you let them know you are there?),
admissions (how do you help a student determine if you are the
right fit for them?), financial assistance (how can students pay?
more on that below), staff to process this all, a campus management
computer system to track it all, faculty to teach the students,
classrooms, computer labs, a library, student services, operations
and maintenance, a financial management system, etc.
How can students pay?
This is one of the most critical points for a new institution.
It will take about 5 years to pass all the regulatory hurdles to
obtain federal financial aid approval, which provides reasonable
access to grants and loans and allows students to pay for the
education at your college. In the meantime, you must obtain
approvals from one of only several private loan companies so that
your students can finance their education. These private loans are
credit-based, and therefore it is very difficult to receive loan
approvals. Families often need co-signers on the loan and you need
a very strong financial services person to help them find a way to
pay. They may have few other options unless they can pay cash and
you will need a scholarship program to help them pay.
What is really critical is that you maintain sufficient
"financial stability" criteria each year (through student
enrollment, or revenue growth, and expense management) that you
continue to receive license renewals each year - again this is the
state's function to protect the students.
What you strive for in addition to financial stability is
sufficient institutional quality planning and process
implementation that proves your worthiness for a grant of
accreditation, which is another step in the regulatory compliance
Once accredited, you must pass more intense financial scrutiny
to obtain approval from the U.S. Department of Education to
participate in "Title IV" Federal Financial Aid programs. This last
step is so critical to the long-term growth and success of your
institution. Post a message on my board if you have further
questions or need help determining if this path is for you!