May 22, 2023
The University of Idaho got the green light from the state’s board of education Thursday to pursue a $550 million acquisition of the University of Phoenix, a for-profit whose enrollment has plunged amid chronic allegations of illegal recruiting and marketing practices.
Still, Idaho board members voiced support for the deal, arguing that bringing the 85,000-student institution into the University of Idaho’s orbit would help expand the state’s educational access and stave off an expected decline in traditional college-aged students. The board did not take public comments during the meeting.
“We’re going to face an enrollment cliff,” board member Kurt Liebich said. “We’ve got to be bold and innovative.”
But higher education experts have been more skeptical, suggesting the University of Idaho’s leaders are about to enter a political and reputational minefield as they pursue the acquisition. Not only will they have their work cut out for them answering questions about the University of Phoenix’s checkered past, they could also take on the for-profit college’s unknown, but potentially expensive, liabilities.
Some of those issues have already begun to surface. The editorial board of the Idaho Statesman newspaper argued Thursday that the education board should defer action on the acquisition, saying the breakneck pace of the deal hasn’t provided adequate time to vet it. News of the acquisition made headlines only one day before the board of education’s meeting.
“If that means the deal falls through, so be it,” the editorial board wrote.
Meanwhile, in a letter Thursday, several national higher education advocacy organizations and for-profit critics urged the University of Idaho’s governing board to further investigate whether the transaction was worth pursuing, given the University of Phoenix’s history of poor student outcomes and allegations it has used deceptive recruiting practices.
The for-profit has faced a string of lawsuits and government investigations, including a $191 million settlement in 2019 with the Federal Trade Commission over accusations that it produced misleading advertisements.