Last week, the University of Idaho secured a $550 million deal to acquire the University of Phoenix, the online for-profit college that once boasted almost 470,000 students in the early 2010s. The affiliation comes at the heels of the University of Arkansas System rejecting a similar deal after college leaders were concerned the for-profit institution’s rocky legal history could hurt the reputation of the UA system.
Despite the University of Phoenix being slapped with a $191 million fine by the Federal Trade Commission in 2019 over deceptive advertising, paying back $50 million in cash to former students, and canceling $141 million in student debts, the University of Idaho believes the pros outweigh the cons. And they might be onto something.
Idaho’s acquisition of UoPX’s fully developed online infrastructure is helping expand its academic offerings and student outreach, both conducive to boosting enrollment in light of higher education’s sweeping demographic changes.
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Increased academic equity
The University of Idaho will increase its academic reach to two important student demographics busier than the average early-20-something-year-old student. The University of Phoenix primarily serves online, non-traditional students, most of whom work full-time. As more students decide to work to combat rising school costs and debt, they are at a higher risk of performing worse and taking longer to graduate. First-generation college students are also more likely to work part-time. Online program offerings from the University of Phoenix will allow these students to work and learn at their own pace and could potentially foster higher persistence and retention rates.
“U of I excels at delivering courses in person and the University of Phoenix excels at delivering courses online. Together, we can meet the needs of all learners and complement each other,” reads one statement from a University of Idaho FAQ posting.
Similarly, U of I states the two schools “share a mutual desire to reach first-generation and underserved students.” UoPX’s 80% first-generation student body will greatly increase the effectiveness of U of I’s mission.
Expand program offerings
Nursing and counseling are currently not offered among U of I’s academic programs, and the affiliation will give the college access to a new cohort of students pursuing these programs.
Diversify revenue streams
The University of Idaho is creating a nonprofit to acquire the for-profit college, yielding $10 million in annual revenue due to the municipal bond debt used to finance the purchase.
“The affiliation will diversify our revenue streams to provide greater economic stability for delivery of educational opportunities,” University of Idaho President Scott Green said during a meeting with the Idaho State Board of Education, according to Forbes.
While the two colleges will initially operate as two separate institutions, the acquisition could potentially add 85,000 students to the University of Idaho if UoPX were to fully integrate.