The University of Phoenix has moved on from a proposed affiliation with the University of Arkansas System after the system's board of trustees voted against the deal last month.
The for-profit online university will instead partner with the University of Idaho, the latter institution announced Wednesday. The arrangement is similar to the one proposed by UA System President Donald Bobbitt: a newly-created not-for-profit organization affiliated with the University of Idaho will acquire Phoenix for $550 million.
The transaction is expected to close by early 2024. It's being financed through non-taxable and taxable bonds that are separate from the university's budget.
In a statement, UA System spokesman Nate Hinkel said, “We have a thorough understanding of the value and importance of the University of Phoenix’s mission of providing high-quality learning opportunities for working adults and other nontraditional students.
"Based on the amount of due diligence we have done on this project, we are not surprised that another university also saw the value in pursuing an affiliation with University of Phoenix. We wish all parties involved much success as they move forward."
The University of Idaho said it was approached by Phoenix about an affiliation in March. By that time, the UA System's proposed deal with Phoenix had come under scrutiny from student and consumer advocates and a former chair of the board of trustees. The Arkansas Times first reported the proposal in January.
Trustees last month voted 5-4 against a resolution supporting the affiliation, citing concerns about Phoenix's reputation and contract terms they believed would've limited the UA System's power.
Still, questions remained about whether Bobbitt would pursue the deal without the board's endorsement. He had the authority to do so, but acknowledged it would be difficult.
Bobbitt said the affiliation with Phoenix would've provided the system with $20 million per year and brought the system nationwide exposure.
The University of Idaho said it expects $10 million in supplemental funding from Phoenix initially. That amount will grow over time, according to the university.
The two entities are looking to submit an application for approval to the Higher Learning Commission by Friday. The commission would consider the deal at its November board meeting.