UI asking for permission to purchase the University of Phoenix, an online school

The Idaho State Board of Education on Thursday will consider University of Idaho's proposal to acquire the online higher education institution the University of Phoenix.

The purchase price is $550 million, according to a UI frequently-asked-questions webpage. The UI will ask the education board for its approval to create a not-for-profit entity that would acquire the University of Phoenix.

The University of Phoenix's current owners would provide $200 million in cash that will transfer to the not-for-profit corporation.

If approved, this purchase would be financed by bonds issued by the not-for-profit entity and not taxpayer dollars. There's an expected $10 million in supplemental education funding to UI and that amount may grow over time.

"This is an incredible opportunity for both institutions to diversify our programmatic portfolios," the UI website said. "This transaction will improve student access to higher education and will expand learning technologies and strategies."

The newly formed not-for-profit would acquire all the assets of the online university, which includes a high-capacity digital education platform and a few leases for physical locations.

The University of Phoenix is a for-profit institution, and in 2021, its students were awarded a total of nearly $50 million in tuition refunds as part of a larger $191 million lawsuit for deceptive advertisements. In 2009, the U.S. Justice Department settled a False Claims Act lawsuit against the institution for $67.5 million.

If acquired by UI, the online university would go to nonprofit status. New ownership of the online university took over in 2017.

"U of I leadership has done due diligence to assess the current state of University of Phoenix and believes University of Phoenix has strong academic operations and a robust compliance-oriented approach, and that the acquisition would benefit the U of I," the website said. "The potential financial risks have been factored into the transaction structure and terms."

This transaction is targeted for completion by early 2024; the sale will need approval from both institutions' accreditors: The Higher Learning Commission and the Northwest Commission on Colleges and Universities.

The Idaho State Board of Education will meet at noon PDT Thursday at Boise in a special meeting that can be viewed live on the board's YouTube page.

Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at lguido@idahopress.com and can be found on Twitter @EyeOnBoiseGuido.