Apr 26, 2023 - News

University of Arkansas board votes against University of Phoenix deal

A black sign with white lettering marks the location of the University of Phoenix.

Photo: Scott Olsen/Getty Images

The University of Arkansas System board of trustees on Monday rejected a resolution that would have supported a future affiliation with the University of Phoenix, the for-profit online school.

State of play: UA System president Donald Bobbitt still has the authority to move forward with the controversial deal despite the split vote.

  • The university system created a nonprofit called Transformative Education Services Inc., last year to acquire the private school, rather than buy it directly, to protect Arkansas from legal and financial liability, the Washington Post reported.
  • Per the proposal, the University of Phoenix would act as an affiliate institution with a licensing agreement that could generate about $20 million in revenue.

Zoom in: About 80,000 students are enrolled at University of Phoenix, and most take online classes. The brand is a household name and its degrees are accessible to adult learners, an increasingly important and growing applicant pool for colleges.

  • The university once had the largest student body in the country with nearly 470,000 students as of 2010, but its reputation and enrollment took hits thanks to "aggressive regulatory scrutiny from the Obama administration," according to Inside Higher Ed.

Flashback: The Great Recession fueled the growth of for-profit colleges, which attracted low-income students looking for options amid a tough job market.

Yes, but: While for-profit schools can give students a more flexible way to earn a degree, many such programs have closed amid accusations of predatory lending and false advertising.

  • Phoenix agreed to cancel $141 million in student debt in 2021 through a settlement with the Federal Trade Commission over deceptive recruiting tactics that boasted relationships with high-profile companies.

What's next: University of Phoenix has reportedly been on the market for years as public universities are looking to expand online learning programs. So, even if Bobbitt doesn't make the deal, this might not be the last acquisition attempt.

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