OUTSIDE THE LINES: The University of Arkansas system has campuses throughout the state. A plan to fold in an online university would have expanded its reach beyond state borders.
In early 2021, with college class still sporadically shuttered by the COVID-19 pandemic, observers of college were already warning of the next catastrophe-level risk to enrollment numbers.
An upcoming "enrollment cliff" was on its method. Declining birth rates during the country's recession more than a years earlier indicated fewer young adults registering in college as soon as 2025.
The University of
Phoenix-- among the country's biggest online and for-profit universities-- was likewise struggling, registration having dropped from about 470,000 students in 2010 to about 79,000 in 2023. In 2019, regulative and financial problems caused
Phoenix's accepting a $191 million settlement with the Federal Trade Commission, severely harming the school's reputation.
And its owner, Apollo Education Group Inc., started actively looking for a buyer, somebody to take the mainly online college off its hands.
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A clandestine plan to obtain the University of
Phoenix and fold it into the University of Arkansas System started to take shape, with the goal of expanding the University of Arkansas's ability to provide education inexpensively and beyond the state's borders online. The deal has since gone south, and the University of
Phoenix is in talks with other potential buyers.
But the secret plot to acquire a having a hard time for-profit diploma mill for the university's arsenal hints at the system's battles to stay afloat as student bodies shrink and anti-intellectualism at the state Capitol threatens school budget plan numbers.
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Sinking
Phoenix
In the consequences of the University of
Phoenix's humiliating legal problems, alumni-- veterans, civil liberties supporters and others who felt mistreated by the university-- joined to caution prospective purchasers of the threats that would feature acquiring
Phoenix.
By early March 2021, someone at the University of
Phoenix had actually connected to Donald Bobbitt, president of the University of Arkansas System considering that November 2011 and a teacher currently understood for his fascination with online education. In 2014, the UA System developed the ill-fated eVersity, an online-only venture targeted at enrolling working grownups. And in September 2021, the university system paid $1 to purchase the online Grantham University, which has since become part of the UA umbrella.
Possibly it shouldn't have been surprising that somebody at the University of
Phoenix called Bobbitt to see if the system or a nonprofit affiliate might be interested in buying.
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Bobbitt was interested. He visualized the UA System affiliating with a not-for-profit entity that would purchase
Phoenix with private, not public, funds. In his view, the purchase would benefit both the UA System and
Phoenix through a licensing agreement that would pay the system an approximated $20 million each year.
For almost two years, Bobbitt wooed
Phoenix, enshrouding the pursuit in a secrecy seldom seen in public universities. Not up until January of this year, after somebody overheard trustees arguing throughout an executive, or closed, session, presumably enabled just for personnel matters, did word go out about Bobbitt's own phoenix-like crusade.
Not for three more months would Bobbitt bring his proposition to the UA System's board throughout a public conference, where a couple of trustees lavished it with appreciation while a couple of others were outraged by the amount of financial and legal information involving the $500 million to $700 million transaction they were expected to soak up in a single meeting.
" Fairly or unfairly,
Phoenix brought considerable reputational damage with it," stated Skip Rutherford, dean emeritus of the University of Arkansas Clinton School of Public Service. Without 10-0 or 9-1 support, a divided board made the right choice not to move forward."
The real vote was 4 for the plan, five versus it and one abstention or recusal.
" Critics have actually also kept in mind the secrecy surrounding the deal followed by a quick board vote," Rutherford said. "That might be a good 'deal making' strategy but it is not a great 'deal selling' one.'
Tricks brewing
On March 9, 2021, Bobbitt signed a nondisclosure, or privacy, arrangement with the University of
Phoenix, according to now-former UA System board chairman Cliff Gibson III, who was revealed a cover sheet with Bobbitt's outdated signature and was asked to sign it too in February of this year.
Gibson stated he decreased to sign the document, which system representative Nate Hinkel stated he could not find. Gibson subsequently emailed it to Hinkel, who then shared it with the Arkansas Times. Hinkel stated he also might not find comparable documents signed by any other trustees but did find one checked in June 2021 by Michael Moore, the system's vice president for academic affairs.
Secrecy and
Phoenix's ruined credibility weren't the only problems Bobbitt faced in offering his
Phoenix dream. There also were severe concerns, though not spoken aloud throughout the UA System board's public conference, about Arkansas-based Stephens Inc.'s function in the game.
Stephens, a financial services firm and the UA System's mergers and acquisition partner, stood to make millions if the deal went through. The larger the price tag, the more Stephens would have made.
Another issue for Bobbitt was that one of the board votes he needed was that of trustee Kelly Eichler. A deputy chief of staff to Gov. Sarah Huckabee Sanders, Eichler is wed to Brad Eichler, Stephens' primary operating officer. Kelly Eichler voiced her support for the strategy at an April 19 conference, she recused herself from the April 23 board vote after promotion occurred surrounding her conflict of interest.
" Conflicts of interest or the perceptions of them are likewise not practical," Rutherford stated.
Still, Rutherford believes Bobbitt "was truly attempting to attend to the forecasted enrollment cliff and profits effect" with the
Phoenix proposal.
" But like with the University of Arkansas chancellor's search, communications were fumbled early. When the
Phoenix proposal was openly revealed, the board was currently split, and Dr. Bobbitt and UA-
Phoenix were paddling upstream," Rutherford said.
Bobbitt's fiascos
Certainly, the
Phoenix fiasco was the second significant defeat Bobbitt has suffered prior to the board in the previous 6 months. In mid-November, the board unanimously voted to call Charles Robinson as the brand-new chancellor of the system's flagship school, the University of Arkansas at
Fayetteville, in spite of efforts by Bobbitt to get Robinson to withdraw his application. Bobbitt had actually even used Robinson a half-million dollars to leave of the choice process and stay provost. He had preferred Daniel Reed, an Arkansas native and computer science professor, who likewise had the support of Walmart successor Steuart Walton. Robinson had worked as interim chancellor for more than a year, paving the way for him to end up being the university's very first Black leader.
Even after the board rejected the resolution supporting a
Phoenix purchase, Bobbitt never would say publicly that the effort was over, regardless of emails inquiring about the status of it. Nor did
Phoenix spokeswoman Andrea Smiley react to emails.
Before the vote, some had actually feared Bobbitt might try to make the acquisition on his own without seeking board approval-- something he apparently could have lawfully done under board policy, though not quickly. So, might he still try to continue?
" Dr. Bobbitt has said it is tough to progress on the task without the assistance of the Board," Hinkel stated. "That stays the case and I don't have anything to include at this time."
Days later, when the news broke of the University of Idaho's comparable effort to develop a nonprofit to purchase
Phoenix, Hinkel provided a statement that came the closest yet to a sign that the UA System was out of the game.
" Based on the amount of due diligence we have done on this task, we are not shocked that another university also saw the value in pursuing an affiliation with University of
Phoenix," Hinkel stated. "We want all parties involved much success as they move forward."
Further, the federal Higher Learning Commission stated on May 17 that it had actually not received anything from the UA System despite a lawyer's declaration throughout a current UA System board meeting that a document relating to the
Phoenix proposition was due at the commission May 2. Unlike the UA System Board, the Idaho State Board of Education all authorized the University of Idaho president's proposition, implying it can move on but still isn't a done offer. UA System trustee Ed Fryar, who supported Bobbitt's strategy, said recently that a minimum of two other organizations were talking with
Phoenix. He did not name them. Even more, a chart shared with Idaho's board members in May showed that a pending closing condition was the ability to finance the substantial transaction.
Some have actually hypothesized independently that Bobbitt's job may remain in risk. His agreement is due to expire Dec. 31 unless it's extended. Neither Bobbitt nor Hinkel answered a question about whether Bobbitt plans to look for an extension.
A former chemistry professor who appears rather self-assured though clearly dissatisfied in the board's rejection of his
Phoenix vision, Bobbitt, 66, might choose to retire. He likewise might still get an agreement extension. Or he could move to another organization and there pursue his vision of welcoming "innovation and innovation." Along the method, he simply might increase like the never-ceasing phoenix itself did in Greek mythology and develop yet another grand plan.
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