AU board plans to acquire for-profit online college
A proposed deal for the University of Arkansas system to acquire a for-profit online college will be reviewed by the system’s board on Wednesday.
A deal with Grantham University could potentially revive failed efforts for UA System’s eVersity, an online-only business created with board approval in 2014 to recruit working adults and enroll them in. programs to complete their degrees.
The Board of Trustees will consider a resolution for University of Arkansas System President Donald Bobbitt “to take the additional steps necessary to establish the University of Arkansas – Grantham as the System Campus of University of Arkansas “.
An acquisition proposal says “the new campus will eventually integrate with eVersity, resulting in a single online university.”
“This potential acquisition represents a shift in our efforts to reach adults who are underserved by public higher education due to their need to attend fully online and flexible institutions,” Bobbitt said in a statement.
The proposed deal asks the UA System’s board of trustees to take on “some discreet responsibility” while acquiring – for $ 1 – “nearly all of the assets” of a school that, according to federal data, welcomes around 5,600 students and has one in four. graduate in eight years.
Financial details of the responsibilities the UA system would take on were not disclosed in the agenda documents made public ahead of Wednesday’s meeting, despite a 44-page asset purchase contract proposal referencing to a “Exhibit D” listing the assets and liabilities that would be transferred under the agreement.
The UA system refused to provide document “Exhibit D” after reviewing a request for public documents submitted by the Democrat-Gazette. The “Exhibit D” documents were exempted from public disclosure on Monday “because they involve proprietary data from a private for-profit entity and that would provide a competitive advantage,” the UA System spokesperson said, Nate Hinkel, in an email, quoting Ark. Coded. Anne. § 25-19-105 (b) (9) (A).
An acquisition proposal, however, states that “there would be no long-term service agreement, revenue sharing or ongoing relationship with the current owners of the university once the transaction is completed.” As part of the deal, the UA system would “initially” employ around 240 faculty members and pay for the services of approximately 170 Grantham University staff employees.
Grantham University, based in Lenexa, Kan., Offers associate’s, bachelor’s and master’s degrees, as well as undergraduate and graduate certificates, in more than 60 university programs, according to the proposal. A deal would also require approval from Grantham University’s board of trustees. The university’s owner, The Level Playing Field Corp., also has a board of directors that is expected to approve the transaction.
Bobbitt, in a letter to administrators, described the UA System’s eVersity as having “succeed”. But budget documents show finances fell short of expectations.
UA System’s eVersity did not make a “debt payment” on a $ 5 million loan from other UA System campuses, according to its budget proposal earlier this year.
“For FY 21, we expected eVersity to generate enough cash flow to pay off the first debt payment to campuses for loans with them, but that did not happen. We will seek to restructure the debt over a longer repayment period so that operations can stabilize, ”said the eVersity budget proposal.
In 2018, UA directors approved an extension of the deadline for eVersity to begin repaying the loan principal. Federal data lists eVersity as enrolling around 800 students.
Bobbitt, in his statement, referred to eVersity helping Arkansans who had completed college earlier in their lives but had not graduated.
“Their success in earning a degree is imperative for their future and for the future of our state and our region,” said Bobbitt. “By acquiring the assets of Grantham University, we will be able to scale up this effort to transcend the borders of Arkansas and diversify the educational offerings and income profile of our system. “
In recent years, some other large public universities have acquired or entered into agreements with for-profit institutions or institutions that started out as for-profit entities.
For-profit schools have different goals than public universities, said Robert Shireman, senior researcher at the Century Foundation, a think tank with offices in New York and Washington, DC that advocates for “economic equity. , racial and gender in education, health care and work, ”according to its website.
The University of Arkansas system, in considering the acquisition of the for-profit college, “would buy an asset that was in the hands of people whose primary motivation was to make money,” Shireman said. .
“What this has tended to encourage in for-profit colleges is low spending on education, actually to educate students,” Shireman said, with the money going more on recruiting and advertising. .
Shireman said it is important in agreements like these for a public university to have “full control” over decisions about student recruitment and what is best for students, rather than ” investors who are trying to extract money from the institution “.
“The University of Arkansas has work to do to transform Grantham into an online university worthy of state university affiliation,” said Shireman.