![]() “The Department has the authority under federal regulations to recoup funds from the University of Phoenix for any such approved loan discharges.”ĭahn Shaulis, editor of the New Jersey-based Higher Education Inquirer blog, has followed the University of Phoenix closely for years. “While the FTC’s settlement provided relief to certain students for institutional debt, it did not resolve the students’ federal loan obligations, nor, importantly, the school’s potential liability to the Department of Education for any approved Borrower Defense to Repayment loan discharge applications,” the coalition wrote. The coalition, for example, noted that the FTC alleged that Phoenix had “targeted active duty service members, veterans, and military spouses” with deceptive advertising. ![]() Under that settlement, Phoenix agreed to pay $50 million in cash and to cancel $141 million in debts owed to the school by students who were harmed by deceptive ads, according to the FTC. In 2019, Phoenix, one of the nation’s largest for-profit colleges, agreed to a $191 million settlement with the Federal Trade Commission, which said the college had lured students with fraudulent claims. Yet some observers, including the coalition and Gibson, have concerns about Phoenix’s reputation largely because of its recent history. Hinkel dismissed what he called the coalition’s “false concerns” about “overwhelming the UA System.” He said such “would not be the case and thus is not an issue.” Gibson’s term as chairman ends today, and his term on the board will end once Gov. Gibson has previously said Bobbitt told him that a Japanese bank would provide financing for the nonprofit affiliate. In my mind, the name Phoenix would run off more folks than it would gather,” he told Bobbitt. “I would submit that the Phoenix’s national recognition is not the kind of recognition that most folks would want for their beloved University of Arkansas. Gibson, a Monticello attorney, takes a different view. “In an era of limited state funding for higher education, we feel obligated to consider opportunities such as this that both align with our mission to educate more students and have the potential to bring in new resources for the system and its campuses,” he added.īobbitt said the UA System and the University of Phoenix “have tremendous brand recognization, and we believe an affiliation could be mutually beneficial for each entity without confusing any of the great work already being done within the System.”įurther, Bobbitt said Phoenix has more than “1 million alumni, including many highly successful business and industry leaders.” He said it also has “a long history of innovation in distance and career education and a number of other discipline-specific accreditations.” “This additional revenue is not an insignificant amount, and could be used to support system-wide needs such as student scholarships, staff and faculty salaries or critical deferred maintenance needs on our campuses, among many other potential projects,” Bobbitt said. Licensing agreements allow approved usage of certain brand names and images. The UA System has not said who or what might provide financial backing for TES Inc. Bobbitt said in a recent email that “a number of financing options are still being considered with the goal of securing the most attractive financing possible to support the potential deal.”īobbitt estimated that a licensing agreement being negotiated could yield roughly $20 million annually for use by the UA System. The UA System’s negotiations with Phoenix began about 18 months ago and are ongoing. At that time, Phoenix representatives are “required to provide evidence … that they are disclosing their standing with other accreditors to the public.” ![]() 23 letter from the commission’s Institutional Actions Council to Phoenix’s interim president says in part that an interim report is due April 20. 8 email to Bobbitt that in reviewing the Higher Learning Commission’s website, he noticed a January entry that says, “Reaffirm Accreditation with Monitoring.” Outgoing UA System board member Cliff Gibson III, who opposes the Phoenix proposal, however, said in a Feb. “There would be no state or university funds at risk, and campuses would operate as efficiently and routinely as they currently do, but with the added benefits and resources of this potential affiliation,” Hinkel said. It is also worth noting that the University of Phoenix is accredited by the Higher Learning Commission, the same organization that accredits more than 500 colleges and universities in the United States, including those in Arkansas. UA System spokesman Nate Hinkel said the coalition’s “allegations … are speculative and the concerns do not contemplate the specifics of this proposed transaction.
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