The University of Idaho and the University of Phoenix have announced a plan, pending “proper approvals,” for the public university to purchase the private for-profit university for $550 million, according to the Idaho’s institution’s website.

It is expected that the transaction would be completed by early 2024.

Initially, University of Phoenix would operate separately in a 501(c)(3) organization affiliated with the University of Idaho. University of Phoenix would remain an independent educational institution operated by its own president and leadership team, the website states.

“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,” the website states.

The seller would also provide $200 million in cash that would transfer to the not-for-profit corporation, according to the website.

The not-for-profit corporation will acquire all the assets of University of Phoenix, “including 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,” the website states.

Plans call for maintaining University of Phoenix’s staff who are highly experienced 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, according to the website.

University of Phoenix, started in 1976, has served mostly working adult learners with dependents for nearly 50 years. It offers flexible online learning options for nontraditional students. Historically, University of Phoenix included physical locations in cities across the country, including a campus in Murray and four others in Utah.

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Presently, the university primarily delivers online education to some 85,000 students at all levels, microcredentials, certificates, associate degrees, bachelor’s, master’s and doctoral degrees.

The website states that the University of Idaho seeks to “affiliate” with the University of Phoenix because “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.” 

Other public universities have purchased for-profit online universities in recent years:

  • Purdue University affiliated with Kaplan University, which was a for-profit university and is now known as Purdue Global. 
  • University of Massachusetts 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. 

Earlier this year, Inside Higher Education reported that the University of Arkansas System was considering a transaction in which it would transform the for-profit University of Phoenix into an independent nonprofit affiliate. In April, the system’s governing board rejected the arrangement by a 5-4 vote, with one abstention.

The University of Phoenix, which once boasted an enrollment of 470,000 students in the early 2000s, now serves about 85,000 students.

“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,” a Q&A on the University of Idaho website states.

According to the website, Idaho taxpayers will not pay for this purchase. “The transaction is being paid for by bonds issued by the not-for-profit entity,” the website states.

According to Inside Higher Ed, the University of Phoenix’s enrollment peaked in 2010.

“Over the course of the next decade, economic trends and aggressive regulatory scrutiny from the Obama administration battered the university’s reputation and drove enrollment down. In 2019, the institution and the Federal Trade Commission agreed to a multimillion-dollar settlement following a five-year investigation into whether the university engaged in deceptive advertising by falsely touting its relationships with big employers; the agreement did not include an admission of wrongdoing,” Inside Higher Ed reported.