University of Idaho to Create Not-For-Profit to Acquire University of Phoenix

This week, the Idaho State Board of Education sitting as the Board of Regents of the University of Idaho granted approval for the creation of a not-for-profit entity that will acquire the operations of the University of Phoenix.

This represents a historic opportunity to improve student access to higher education, a monumental broadening of U of I’s reach to nontraditional adult learners, and the completion of University of Phoenix’s transformation. U of I’s affiliation with University of Phoenix unites the two institutions in a shared mission to illuminate and elevate students by expanding access to affordable, career-relevant online education.

University of Phoenix primarily serves students who are working adult learners, while U of I will remain Idaho’s land-grant, residential university serving primarily traditional learners.

“Higher education across the country is changing. This, together with the impending national enrollment cliff, where smaller class sizes mean fewer traditional students, creates an opportunity for us to innovate,” said U of I President Scott Green. “By affiliating with University of Phoenix, a leader in online higher education, we bring together the best of both systems and build on our common desire to educate students.”

“Since John Sperling founded University of Phoenix in 1976, almost 50 years ago, our mission has been to provide accessible, career-relevant education to underrepresented adult learners,” said University of Phoenix President Chris Lynne. “The university has focused on student outcomes, support and upskilling, as well as understanding and reacting to marketplace trends from employers, and innovating ways to make online higher education more accessible and achievable. We are excited to build on the great legacy of our institution by working with University of Idaho, one of our nation’s leading public universities.”

What to know:

• From a regulatory and accreditation standpoint, the path to non-profit status will take some time, as each regulatory and accrediting entity has their own processes to recognize University of Phoenix as a non-profit entity.
• During this transition, University of Phoenix will maintain its current operating team, status and mission.
• The initial financial benefit to U of I will be $10 million per year, to be invested in strategic efforts at U of I. This amount is expected to grow over time.
• Beyond the financial support, the affiliation also provides U of I with a robust technology infrastructure that can be adapted for U of I as well as statewide online programs. The student information system University of Phoenix has built for enrollment and student support is comprehensive and well-tested.
• Unlike other recent transitions of for-profit universities to non-profit status, no private beneficiaries, previous owners or for-profit affiliates will remain associated with the university moving forward.

The demand for online programs for adult learners continues to grow each year. This affiliation allows U of I to serve this adult learner audience as well as place-bound Idahoans who deserve access to higher education. By working together, we can best meet the needs of all learners wanting to expand their education.

“As an alumnus of the University of Idaho, I know and appreciate the value of a Vandal education,” Green said. “This affiliation only strengthens our ability to continue delivering on that promise of value to our students.”

The president of University of Phoenix, Chris Lynne, will report to a non-profit board that is being created for the acquisition. The acquisition is contingent on accreditor approvals. There are possibilities for future integration, but there are no specific plans at this point.

The acquisition agreement is for $550 million and will be funded by a mix of taxable and non-taxable bonds issued by the new not-for-profit. This money is separate from any U of I budgets, funding lines or state appropriations. University of Phoenix’s current ownership will also provide $200 million in cash that will transfer to the new non-profit.