(An earlier model incorrectly reported that the College of Phoenix would have been folded into the UA System.)
In early 2021, with faculty lecture rooms nonetheless sporadically shuttered by the COVID-19 pandemic, observers of upper training had been already warning of the following catastrophe-level risk to enrollment numbers.
An upcoming “enrollment cliff” was on its manner. Declining delivery charges in the course of the nation’s recession greater than a decade earlier meant fewer younger adults enrolling in faculty as quickly as 2025.
The College of Phoenix — one of many nation’s largest for-profit and on-line universities — was additionally struggling, enrollment having dropped from about 470,000 college students in 2010 to about 79,000 in 2023. In 2019, monetary and regulatory issues led to Phoenix’s agreeing to a $191 million settlement with the Federal Commerce Fee, severely damaging the college’s popularity.
And its proprietor, Apollo Training Group Inc., started actively looking for a purchaser, somebody to take the primarily on-line faculty off its fingers.
A clandestine plan for a nonprofit entity affiliated with the College of Arkansas System to accumulate the College of Phoenix started to take form. The deal has since gone south, and the College of Phoenix is in talks with different potential consumers.
However the secret plot to accumulate a struggling for-profit faculty for the college’s arsenal hints on the system’s struggles to remain afloat as pupil our bodies shrink and anti-intellectualism on the state Capitol threatens campus finances numbers.
Sinking Phoenix
Within the aftermath of the College of Phoenix’s embarrassing authorized troubles, alumni — veterans, civil rights advocates and others who felt wronged by the college — united to warn potential consumers of the risks that might include buying Phoenix.
By early March 2021, somebody on the College of Phoenix had reached out to Donald Bobbitt, president of the College of Arkansas System since November 2011 and an educator already identified for his fascination with on-line training. In 2014, the UA System created the ill-fated eVersity, an online-only enterprise aimed toward enrolling working adults. And in September 2021, the college system paid $1 to purchase the web Grantham College, which has since turn into a part of the UA umbrella.
So, maybe it shouldn’t have been stunning that somebody on the College of Phoenix contacted Bobbitt to see if the system or a nonprofit affiliate could be excited by shopping for.
Bobbitt was . He envisioned the UA System affiliating with a nonprofit entity that might purchase Phoenix with non-public, not public, funds. In his view, the acquisition would profit each the UA System and Phoenix by a licensing settlement that might pay the system an estimated $20 million yearly.
For nearly two years, Bobbitt wooed Phoenix, enshrouding the pursuit in a secrecy seldom seen in public universities. Not till January of this 12 months, after somebody overheard trustees arguing throughout an government, or closed, session, presumably allowed just for personnel issues, did phrase get out about Bobbitt’s personal phoenix-like campaign.
Not for 3 extra months would Bobbitt convey his proposal to the UA System’s board throughout a public assembly, the place just a few trustees lavished it with reward whereas a few others had been angered by the quantity of monetary and authorized particulars involving the $500 million to $700 million transaction they had been anticipated to soak up in a single assembly.
“Pretty or unfairly, Phoenix introduced important reputational harm with it,” mentioned Skip Rutherford, dean emeritus of the College of Arkansas Clinton College of Public Service. “With few exceptions, most individuals in Arkansas increased training that I talked to had been in opposition to [the proposal]. For some it was extra than simply mission creep; it was mission leap. With out 10-0 or 9-1 assist, a divided board made the proper resolution to not transfer ahead.”
The precise vote was 4 for the plan, 5 in opposition to it and one abstention or recusal.
“Critics have additionally famous the secrecy surrounding the deal adopted by a fast board vote,” Rutherford mentioned. “Which may be an excellent ‘deal making’ technique however it isn’t an excellent ‘deal promoting’ one.’
Secrets and techniques brewing
On March 9, 2021, Bobbitt signed a nondisclosure, or confidentiality, settlement with the College of Phoenix, based on now-former UA System board chairman Cliff Gibson III, who was proven a canopy sheet with Bobbitt’s dated signature and was requested to signal it as nicely in February of this 12 months.
Gibson mentioned he declined to signal the doc, which system spokesman Nate Hinkel mentioned he couldn’t discover. Gibson subsequently emailed it to Hinkel, who then shared it with the Arkansas Instances. Hinkel mentioned he additionally couldn’t discover comparable paperwork signed by every other trustees however did discover one signed in June 2021 by Michael Moore, the system’s vice chairman for educational affairs.
Secrecy and Phoenix’s tarnished popularity weren’t the one issues Bobbitt confronted in promoting his Phoenix dream. There additionally had been severe issues, although not spoken aloud in the course of the UA System board’s public assembly, about Arkansas-based Stephens Inc.’s function within the sport.
Stephens, a monetary companies agency and the UA System’s mergers and acquisition companion, stood to make hundreds of thousands if the deal went by. The larger the value tag, the extra Stephens would have made.
One other drawback for Bobbitt was that one of many board votes he wanted was that of trustee Kelly Eichler. A deputy chief of workers to Gov. Sarah Huckabee Sanders, Eichler is married to Brad Eichler, Stephens’ chief working officer. Although Kelly Eichler voiced her assist for the plan at an April 19 assembly, she recused herself from the April 23 board vote after publicity arose surrounding her battle of curiosity.
“Conflicts of curiosity or the perceptions of them are additionally not useful,” Rutherford mentioned.
Nonetheless, Rutherford believes Bobbitt “was sincerely making an attempt to deal with the projected enrollment cliff and income impression” with the Phoenix proposal.
“However like with the College of Arkansas chancellor’s search, communications had been fumbled early. When the Phoenix proposal was publicly unveiled, the board was already cut up, and Dr. Bobbitt and UA-Phoenix had been paddling upstream,” Rutherford mentioned.
Bobbitt’s debacles
Certainly, the Phoenix debacle was the second main defeat Bobbitt has suffered earlier than the board prior to now six months. In mid-November, the board unanimously voted to call Charles Robinson as the brand new chancellor of the system’s flagship campus, the College of Arkansas at Fayetteville, regardless of efforts by Bobbitt to get Robinson to withdraw his utility. Bobbitt had even supplied Robinson a half-million {dollars} to drop out of the choice course of and stay provost. He had favored Daniel Reed, an Arkansas native and laptop science professor, who additionally had the assist of Walmart inheritor Steuart Walton. Robinson had served as interim chancellor for greater than a 12 months, paving the way in which for him to turn into the college’s first Black chief.
Even after the board rejected the decision supporting a Phoenix buy, Bobbitt by no means would say publicly that the hassle was over, regardless of emails asking in regards to the standing of it. Nor did Phoenix spokeswoman Andrea Smiley reply to emails.
Earlier than the vote, some had feared Bobbitt may attempt to make the acquisition on his personal with out looking for board approval — one thing he apparently may have legally completed underneath board coverage, although not simply. So, may he nonetheless attempt to transfer forward?
“Dr. Bobbitt has mentioned it’s tough to maneuver ahead on the mission with out the assist of the Board,” Hinkel mentioned. “That continues to be the case and I don’t have something so as to add right now.”
Days later, when the information broke of the College of Idaho’s comparable effort to create a nonprofit to purchase Phoenix, Hinkel issued an announcement that got here the closest but to a sign that the UA System was out of the sport.
“Based mostly on the quantity of due diligence we now have completed on this mission, we’re not shocked that one other college additionally noticed the worth in pursuing an affiliation with College of Phoenix,” Hinkel mentioned. “We want all events concerned a lot success as they transfer ahead.”
Additional, the federal Increased Studying Fee mentioned on Might 17 that it had not acquired something from the UA System regardless of an legal professional’s assertion throughout a latest UA System board assembly {that a} doc regarding the Phoenix proposal was due on the fee Might 2. Not like the UA System Board, the Idaho State Board of Training unanimously accredited the College of Idaho president’s proposal, that means it may well transfer ahead however nonetheless isn’t a completed deal. UA System trustee Ed Fryar, who supported Bobbitt’s plan, mentioned just lately that no less than two different establishments had been speaking with Phoenix. He didn’t identify them. Additional, a chart shared with Idaho’s board members in Might indicated {that a} pending closing situation was the flexibility to finance the massive transaction.
Some have speculated privately that Bobbitt’s job could also be in peril. His contract is because of expire Dec. 31 until it’s prolonged. Neither Bobbitt nor Hinkel answered a query about whether or not Bobbitt plans to hunt an extension.
A former chemistry professor who seems fairly self-confident although clearly upset within the board’s rejection of his Phoenix imaginative and prescient, Bobbitt, 66, may choose to retire. He additionally may nonetheless get a contract extension. Or he may transfer to a different establishment and there pursue his imaginative and prescient of embracing “expertise and innovation.” Alongside the way in which, he simply may rise just like the immortal phoenix itself did in Greek mythology and give you one more grand plan.