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University of Phoenix Affiliation FAQ

The University of Idaho and the University of Phoenix intend, with proper approvals, to affiliate with the goal of increasing access to all learners, improving capacity for supporting all learners and helping all learners achieve their higher education goals.

Background

University of Phoenix is an institution of higher learning that has served mostly working adult learners with dependents for almost 50 years. Started in 1976, the university offers flexible online learning options for non-traditional students. Historically, University of Phoenix included physical locations in cities across the country, but the university now delivers education primarily in an online format due to the overwhelming preference of its students and prospective students choosing to access the flexible, innovative online learning environment. 

University of Phoenix has approximately 85,000 students and offers programs at all levels: microcredentials, certificates, associate degrees, bachelor’s, master’s and doctoral degrees. 

Mission: University of Phoenix provides access to higher education opportunities that enable students to develop knowledge and skills necessary to achieve their professional goals, improve the performance of their organizations, and provide leadership and service to their communities.  

Yes. It is accredited by The Higher Learning Commission and recently was reaccredited for a period of 10 years. The Higher Learning Commission is a U.S. Department of Education-recognized accreditor.

The primary reason is that we share a common mission, to illuminate and elevate students to be successful in their careers and lives. Both institutions serve a significant number of first-generation students who benefit from robust support systems. We can learn from each other how to best serve all learners and ensure that address does not dictate access. We believe we are culturally aligned around student success.   

  • This is an incredible opportunity for both institutions to diversify our programmatic portfolios. This transaction will improve student access to higher education and will expand learning technologies and strategies. 
  • It builds capacity for expanding service to higher education by broadening U of I’s reach to adult learners and University of Phoenix’s reach into Idaho. As we face a national enrollment cliff in traditional students and increased demand from adult learners, this brings together two institutions that complement each other and share a vision for student success.
  • It provides a robust technology infrastructure we can iterate for use by University of Idaho and statewide online programs. The student information system University of Phoenix has built for enrollment and student support is comprehensive and well-tested.   
  • This diversifies revenue streams, adding stability for both institutions during a time of uncertainty in state funding in Idaho and significant changes in the national higher education landscape. 

University of Phoenix employs approximately 130 full-time faculty and 2,800 adjuncts. Most of the faculty are working professionals in their field. They are vetted, provided professional development and teaching support, and regularly reviewed to ensure classes are high quality. University of Phoenix instructors have an average of 14 years of teaching experience and 27.6 years of professional experience in their field.  

The not-for-profit corporation will acquire all the assets of University of Phoenix. This includes a high-capacity, well-developed digital education platform and a few remaining leases for physical locations. A few of University of Phoenix’s campuses remain open but are expected to migrate to a fully online modality. In addition, the plan is to maintain University of Phoenix’s leadership and staff who are highly skilled at delivering online education. The Phoenix campus, which houses the administrative offices of the university and offers space for in-person components of various degree programs, will remain open.

University of Phoenix has been working diligently to improve its reputation by continuing and amplifying its focus on student success and outcomes since it was purchased by its current owners in 2017. University of Phoenix management believes the goals set several years ago have been accomplished and is ready for the next chapter in the university’s evolution.

Details of the Acquisition

At this stage, the parties have entered into an agreement pursuant to which the newly created not-for-profit corporation affiliated with the U of I will acquire University of Phoenix. The transaction is subject to various necessary regulatory approvals and other actions that will take several months to accomplish.  Accordingly, it is expected that the transaction will be consummated by early 2024. 

The purchase price is $550 million. The seller is also providing $200 million in cash that will transfer to the not-for-profit corporation.

The initial benefit is $10 million in supplemental education funding to U of I. We expect that amount will grow over time. 

The purchase will be financed through non-taxable and taxable bonds. This money is separate from any U of I budgets or funding lines.

Should the not-for-profit corporation miss payments on debt related to the acquisition, U of I is agreeing to guarantee up to $10 million annually to cover the payment. However, cash modeling has been undertaken and University of Phoenix currently generates approximately $100 million of unrestricted cash flow annually.

Participation in federal student aid programs is a risk to every institution that participates in such programs, including U of I. We had specialists evaluate the risks and built that into our purchase price and mitigation tools to limit the risk to both institutions.

No, the transaction is being paid for by bonds issued by the not-for-profit entity.

U of I’s collaboration and innovative thinking on other projects drew University of Phoenix’s attention and they approached us in March. We recognized the potential value to our university, the benefit for students and the need to move quickly to take advantage of this unique opportunity.

The institutions are interested in obtaining accreditor approval as soon as possible. The transaction will need the approval of The Higher Learning Commission, the accrediting body for University of Phoenix, before it is consummated. The parties are seeking to have The Higher Learning Commission consider their application for approval at the commission’s November board meeting and therefore must submit the application by Friday, May 19. A similar process will happen with U of I’s accreditor, the Northwest Commission on Colleges and Universities (NWCCU).

Because of the sensitive nature of such a transaction, a very limited number of members of U of I leadership, supported by outside advisors who specialize in the nuances of such acquisitions, worked on the transaction pursuant to a seller-required non-disclosure agreement.

As part of the transaction, University of Phoenix will become operated by a not-for-profit corporation that will have tax-exempt status under Section 501(c)(3) of the Internal Revenue Code.

We are working with the accreditors of both institutions, The Higher Learning Commission and NWCCU, to address any requirements they may have in relation to the transaction.

Fit and Focus

U of I executive leadership has met with University of Phoenix leadership. Our programs are complementary and our goals for serving students are similar. We share a mutual desire to reach first-generation and underserved students. U of I has 52% first-generation students. University of Phoenix has 80%. Our student populations are different – U of I focuses primarily on traditional, residential students and University of Phoenix focuses primarily on adult learners who are working. U of I excels at delivering courses in person and University of Phoenix excels at delivering courses online. Together, we can meet the needs of all learners and complement each other.

Beyond the financial support to U of I, University of Phoenix has the expertise and experience to quickly and cost-effectively develop data-informed courses to meet the immediate skill and competency needs of its students.

University of Phoenix provides a robust technology infrastructure we can iterate for use for U of I and statewide online programs. The student information system University of Phoenix has built for enrollment and student support is comprehensive and well-tested.

U of I has a 135-year history of delivering high-quality education in a public setting.

The affiliation with U of I allows University of Phoenix to move to a not-for-profit operation. This will allow surplus revenue to be directed to the benefit of the institution’s students and operations without the need to consider investor financial expectations.

Initially, University of Phoenix will operate separately from U of I, in a 501(c)(3) that is affiliated with the University of Idaho. University of Phoenix will remain an independent educational institution operated by its own president and leadership team.  

There are areas of future collaboration and integration that we will explore and evaluate together. We will take the time to do this right for all involved.

Mission: The University of Idaho will shape the future through innovative thinking, community engagement and transformative education.  

This transaction and resulting affiliations gives us the opportunity to expand the educational offering and financial resources of U of I and is innovative, engaging and transformative. We are a high-value educational organization, and this brings our value to even more students for the betterment of the university, the students, our state and our country.

It does not change the mission, focus or goals of U of I. U of I will continue to be a great value for Idaho – teaching its future leaders, answering its most vexing questions and collaborating with industry and citizens to make Idaho productive and relevant in the world market. 

In addition, University of Phoenix’s mission is aligned with our mission:

University of Phoenix provides access to higher education opportunities that enable students to develop knowledge and skills necessary to achieve their professional goals, improve the performance of their organizations, and provide leadership and service to their communities. 

U of I is a traditional land-grant university focused on education, research and outreach in the state of Idaho. Our largest audience is undergraduate students – primarily from the Northwest. We also have a robust research portfolio and extend our outreach to every county in the state. 

University of Phoenix serves primarily adult learners nationwide in an online environment. There is some overlap in classes and programs, but University of Phoenix’s online programs are largely complementary, including in fields U of I does not offer, such as nursing, healthcare administration and counseling.  

Classes at University of Phoenix are not on a traditional academic schedule. New classes begin every five to six weeks, depending on the program, offering greater flexibility for working adults.

It is a separate institution from Online Idaho which is a collaborative effort to provide a marketplace for Idaho-based online classes. We are in discussion with the State Board of Education about iterating University of Phoenix’s platform to support Online Idaho.

When looking at both online and in-person delivery, there are some overlapping programs between U of I and University of Phoenix, but they are primarily complementary. The audience and delivery methods are quite different. But there are also places of future collaboration where students could benefit from moving between the institutions to more efficiently and effectively complete degree programs.

More than 560 University of Phoenix courses are already accepted as transfer credits at U of I. 

U of I is the No. 1 Best Value Public University in the West because we provide quality education while working hard to keep costs to students low. We provide more than $30 million a year in scholarships and grants to students. By affiliating with University of Phoenix, more money will be available to students at both U of I and University of Phoenix.

  • Tax savings are estimated at $16 million annually. 
  • Operational successes from both institutions can be reinvested in the institutions and the students without factoring in return to investors.  
  • Because of these changed financial streams, University of Phoenix students can benefit without detracting from the support for U of I students. 

Impact to U of I

No. U of I will continue to pursue the classification and affiliating with University of Phoenix will not change our metrics or our current status. We will continue to invest in our goal of R1 with financial support from P3.

This transaction is about more than revenue, but the revenue U of I does receive may be reinvested in strategic initiatives.

University of Phoenix is a complete system of instructors, staff and leadership. We do not expect a significant impact to U of I operations, jobs or needs.

No. U of I’s online programs will continue as currently offered.

Degree paths will remain separate for now. U of I already accepts more than 560 transfer courses from University of Phoenix.

U of I through the Board of Regents will be the sole member of the new not-for-profit corporation that will operate University of Phoenix after the transaction is consummated. The not-for-profit corporation will be governed by a fiduciary board of trustees. The U of I Board of Regents will appoint the trustees consistent with accreditor expectations regarding an independent board.

In the areas of academics, shared governance will have a large role in any potential integration of academic programs. It is the goal of both U of I and University of Phoenix to ensure all students receive a quality education and that both institutions are good places to work.

There is no expectation for faculty at either institution to teach at the affiliated institution.

University of Phoenix has robust student support systems for non-traditional students that it honed over nearly 50 years. There are best practices established by University of Phoenix that U of I will be able to incorporate into our own student support systems. These include skills mapping courses to help students identify the skills built through coursework; around-the-clock support through their Life Resource Center and a Virtual Student Union; and a commitment to support after graduation through their Career Services for Life program, among other resources.

Yes. Their commencement ceremony looks very much like U of I’s. View their April 29 ceremony (ceremony starts at 14:25).

Reputational Issues

Yes. A number of public institutions have affiliated-through-acquisition of online universities. A few examples include: 

  • Purdue affiliated with Kaplan University, which was a for-profit university and is now known as Purdue Global. 
  • UMass affiliated with Brandman University, a not-for-profit institution that is now known as UMass Global. 
  • University of Arizona affiliated with Ashford University, formerly a for-profit institution now known as University of Arizona Global Campus. 

University of Phoenix's reputation was tarnished by massive growth in the mid-2000. A change in ownership refocused the university on its founding mission to serve working adult learners who did not have the ability to attend college in a traditional setting and found the need for credentials to advance in their careers. They required a career-relevant education, significant student support and flexible online learning. Part of the evolution under new ownership in 2017 included the strategic closing of some physical campuses, greater investment in student support and outcomes, and improving business practices. 

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 potential financial risks have been factored into the transaction structure and terms. 

University of Phoenix experienced massive growth with enrollment as high as 470,000 students in the early 2000s. The university has since refocused and redoubled its efforts on returning to its founding mission of quality education for adult learners with support and flexible online learning. Today, it has 85,000 students that will greatly enhance opportunities for U of I.

U of I has a long history of providing the best value public education in the West. U of I leadership has met with University of Phoenix leadership. University of Phoenix leadership cares deeply about education and access for non-traditional students. By becoming a non-profit university affiliated with U of I, University of Phoenix can focus on what it values — helping working adults advance their education and find success in their careers. We believe this shared value will lead to a successful collaboration.

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