Originally Appeared in the Idaho Statesman
By Eileen Connor
March 18, 2024
Last week, the Idaho House voted to urge the State Board of Education to reconsider the $685 million purchase of the University of Phoenix, the online for-profit college behemoth known for its aggressive advertising and poor outcomes.
Now, the Legislature must act to stop this deal once and for all. Not just because University of Phoenix is a predatory company with a poor reputation — which it is. Not only because Phoenix was fined by the FTC for lying to students about employment opportunities at desirable companies — which it was. Not even because the deal could put the state at legal risk — which it will.
The Legislature should stop this deal because its primary obligation is to the people of Idaho and getting in bed with University of Phoenix will not benefit the people of Idaho. It will instead tarnish Idaho’s brand and offer an inferior education to unsuspecting students.
At the Project on Predatory Student Lending, we represent more than one million student borrowers who were defrauded by for-profit schools, including many who attended the University of Phoenix. We have direct experience with the harm these schools cause, and the short-sighted efforts by public and private institutions of higher education to improve their bottom lines with dubious for-profit partnerships.
University of Idaho will lose credibility and devalue the degrees of alumni
The University of Phoenix is, objectively and factually, a terrible school.
According to College Score Card, only 27% of students graduate, leaving nearly three-quarters of the class in default. This can cause a cascade of financial harm for students; they are more likely to experience poor credit reporting, wage garnishment, tax offset, and collection fees.
Many who attended the University of Phoenix over the last decade tell us that having the school on their resume harmed their job prospects — that employers would laugh at the degree. This is not to take anything away from people who worked hard for their Phoenix credentials — the system failed them, and they deserve better. It is also not to say that some students have not succeeded — despite, not because of, their time at Phoenix.
But it doesn’t change the fact that associating with Phoenix will hurt the reputation of Idaho’s flagship university, devalue the degrees of Idahoans, and keep people from seeking education here.
Idaho students will not benefit from The University of Phoenix
The University of Idaho argues that the University of Phoenix’s online platform would increase access to opportunities for Idahoans. This is false.
In fact, Idaho already offers online programs for undergraduates. And it has spent significantly on digital marketing to attract students. According to its outside marketing firm, the University of Idaho saw a 36% increase in first-year enrollment from 2020 to 2022 and is on track for continued growth. And Idaho, the fastest-growing state in the country, does not face the same demographic challenges to sustained enrollments as do other public colleges.
The state’s demographics are also counter to the prevailing trends — Idaho was the fastest-growing state in the country in 2022, driven by an influx of people in their 20s and 30s, according to U of I professor Jaap Vos. The birth rate in Idaho is also higher than in most states. In other words, to the extent U of I’s goal is enrollment growth, it need not look beyond its borders.
The people recruited for these programs will never set foot in Idaho. They will not contribute to the local economy. And they will not be working and raising families here. But maybe serving the people of Idaho is not what this plan is about.
The partnership brings legal and financial risk to the state
Does Idaho really want to get into the business of targeting students around the country because they are perceived to have no other options?
Phoenix spent over $100 million last year, the most of any school, on digital advertising, in order to recruit Black prospective students and others historically excluded from higher education. The school’s disproportionate Black enrollment is larger than the entire Black community in Idaho. Targeted, race-based marketing of a school with outcomes as poor as those of the University of Phoenix is classic predatory inclusion, also known as reverse redlining.
It’s also illegal under Title VI of the Civil Rights Act, among other laws.
And then there’s potential liability for the consumer deception endemic to Phoenix’s business model. Just this week, the Department of Education announced a recoupment action against the University of Arizona over 2,300 borrower defense claims made against Ashford University which was acquired in 2020 and renamed the University of Arizona Global Campus. Idaho would be on the hook for any liabilities already created by the University of Phoenix, as well as any claims against it going forward.
Higher education is at a crossroads. But treating students as profit centers is not the path forward. Call this what it is — a play to drive up revenue, not quality, and to expand capacity to recruit students outside of Idaho (who, perhaps not coincidentally, pay more than three times as much tuition to attend U of I than Idahoans).
Idaho must say no to the University of Phoenix. The state has an obligation to do better for the people of Idaho and for the unsuspecting online students nationwide.
Eileen Connor is president and director of the Project on Predatory Student Lending.
