BOISE, Idaho — This article originally appeared in the Idaho Press.
The Idaho State Board of Education voted unanimously Thursday to approve the University of Idaho’s request to take the first steps to acquire the University of Phoenix.
UI will create a nonprofit entity to acquire the online higher-education institution.
The purchase price is $550 million, according to a UI frequently-asked-questions webpage. The University of Phoenix's current owners would provide $200 million in cash that will transfer to the nonprofit corporation.
This purchase will be financed by bonds issued by the nonprofit and not taxpayer dollars. There's an expected economic benefit of $10 million in supplemental education funding going to UI and that amount may grow over time.
"This is an incredible opportunity for both institutions to diversify our programmatic portfolios," the UI website said. "This transaction will improve student access to higher education and will expand learning technologies and strategies."
The newly formed nonprofit would acquire all the assets of the online university, which includes a high-capacity digital education platform and a few leases for physical locations.
The University of Phoenix is a for-profit institution, and in 2021, its students were awarded a total of nearly $50 million in tuition refunds as part of a larger $191 million lawsuit for deceptive advertisements. In 2009, the U.S. Justice Department settled a False Claims Act lawsuit against the institution for $67.5 million.
If acquired by UI, the online university would go to nonprofit status. New ownership of the online university took over in 2017.
"U of I leadership has done due diligence to assess the current state of University of Phoenix and believes University of Phoenix has strong academic operations and a robust compliance-oriented approach, and that the acquisition would benefit the U of I," the website said. "The potential financial risks have been factored into the transaction structure and terms."
This transaction is targeted for completion by early 2024; the sale will need approval from both institutions' accreditors: The Higher Learning Commission and the Northwest Commission on Colleges and Universities.
This article originally appeared in the Idaho Press, read more on IdahoPress.com.
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