University of Idaho Affirms $700 Million Deal with University of Phoenix Despite Legal Hurdles

The University of Idaho is set to proceed with its planned affiliation with the for-profit University of Phoenix in a nearly $700 million deal, following the dismissal of a lawsuit by the state attorney general. On January 31, 2024, a judge ruled that Attorney General Raúl Labrador failed to demonstrate a violation of Idaho's Open Meetings Law during the consideration of the transaction by the Board of Regents.

Labrador's lawsuit, which alleged improprieties in the deal, was a major obstacle to the collaboration. However, the judge's decision was seen as a victory by the University of Idaho, which applauded the affirmation of the board's executive session practices and emphasized the positive impact on access to higher education in the state.

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A university spokesperson, Jodi Walker, expressed anticipation for the completion of the affiliation in the coming months, underscoring the importance of higher education in addressing the workforce needs of Idaho. The move signifies a unique opportunity, according to Walker, as the University of Phoenix attempts to improve its reputation amidst past investigations into deceptive practices.

The $700 million deal is part of a broader trend where troubled for-profit schools aim to reposition themselves by facing less regulation as nonprofits. David Halperin, a Washington, D.C., attorney critical of the for-profit college industry, noted that such initiatives are common following investigations into deceptive practices.

Labrador, however, criticized the lack of government transparency and accountability resulting from the ruling, emphasizing the potential negative impact on Idaho citizens. He expressed his intent to explore appellate options to maintain the integrity of Idaho's Open Meetings Law.

Labrador's concerns include the board's secrecy regarding deal details until the last moment, as well as the decision to acquire the University of Phoenix despite fines for deceptive and unfair practices. The University of Phoenix had previously settled federal charges in 2019 and participated in a 2022 settlement to cancel federal student debt for former students affected by alleged misconduct.

The University of Idaho views the affiliation as an opportunity to expand educational access for adult learners seeking online programs, with a focus on serving working adults. The institutions will maintain separate operational structures, each with its own president and leadership team.

Representatives for the University of Phoenix did not immediately respond to requests for comment on the recent developments. Meanwhile, State Board President Linda Clark announced her intentions to seek payment of legal fees from the attorney general's office, further emphasizing the contentious nature of the legal battle surrounding this multimillion-dollar collaboration.