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University of Idaho clears first hurdle to purchase for-profit University of Phoenix

Courtesy University of Idaho

The Idaho Board of Education has voted to allow the University of Idaho to take the first step to purchasing online, for-profit college, the University of Phoenix.

U of I and state education leaders say purchasing the online school could expand access across the state.

In a unanimous vote, the Idaho Board of Education authorized the University of Idaho to create a separate non-profit to buy the University of Phoenix. The deal, which went public a day before the vote, would allow U of I to purchase the for-profit college for $550 million dollars.

U of I leaders say creating a separate non-profit should protect the university from risk.

State Board of Education leaders, such as board Vice President William Gilbert Jr. say the deal could dovetail with work to expand broadband access in the state.

“We are different than a lot of other states, in the sense that we have such a significant access differential, between our rural, remote and more suburban schools,” he said. “There's an opportunity to have a seat at that table now before that becomes a bigger problem, and you combine that with the platform with the enhancements that are coming with the broadband initiative in the state, the timing I think is really excellent.”

Board member Cally Roach said she’s hopeful it will also expand opportunities for rural, and non-traditional students.

“Many adult learners, or people out in the work force don't have the opportunity to stop their career and go to the University of Idaho, or another university, and they do have to continue to work,” she said.

The deal has raised concerns. The University of Phoenix was in negotiations on a similar sale last month with the University of Arkansas, but it was voted down by the Board of Regents.

The Idaho Statemen, has alsospoken outagainst the sale, publishing an editorial saying it looked secretive, and rushed.

In 2019 the University of Phoenix agreed to pay $191 million dollars, a large portion of which was student loan forgiveness, for allegedly misleading students about their job prospects upon graduation.

The Federal Trade Commission, accused the university of falsely implying they had special relationships with major corporations that could lead to job opportunities for graduates. In 2020, the Department of Veterans Affairs also threatened to block the University of Phoenix, as well as several other for-profit-colleges, from receiving money from the GI bill because of similar concerns.

The University of Phoenix did not admit wrongdoing and, and noted in statement that the allegations had not be heard in a courtroom.

U of I President Scott Green said turning the University of Phoenix into a non-profit, overseen by the University of Idaho, could address those challenges.

“We think they're very, very good people, we understand there's been problems in the past, and people are rightly upset with them for past behaviors,” Green said. “It is our opinion, in dealing with them, and going through our due diligence that they are on a very different path now. We recognize that as long as they are a private institution, and until the Department of Education would recognize them as a public, there is some reputational risk there.”

Thursday’s vote is the first step in a multi-month deal. Green said the sale likely won’t be finalized until 2024.

This story was change from its original version on May 22, 2023 to include additional context and clarification from the University of Phoenix, and correct that the Federal Trade Commission, not the Federal Communications Commission, settled with the college.

Rebecca White is a 2018 graduate of Edward R Murrow College of Communication at Washington State University. She's been a reporter at Spokane Public Radio since February 2021. She got her start interning at her hometown paper The Dayton Chronicle and previously covered county government at The Spokesman-Review.