UA 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 considered by the system’s board of trustees on Wednesday.
A deal for Grantham University could potentially jump-start stalled efforts for the UA System’s eVersity, an online-only venture 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 further steps necessary to establish the University of Arkansas – Grantham as a campus of the University of Arkansas System. the University of Arkansas”.
An acquisition proposal states that “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 flexible, fully online institutions,” Bobbitt said in a statement.
The proposed deal calls for the UA system’s board of trustees to take on “certain quiet responsibilities” while acquiring – for $1 – “substantially all of the assets” of a school that federal data shows enrolls about 5 600 students and has one in four. graduate within eight years.
Financial details of what responsibilities the UA system would take on were not disclosed in agenda documents made public ahead of Wednesday’s meeting, despite a 44-page proposed asset purchase agreement making reference to an “Exhibit D” listing the assets and liabilities that would be transferred under the agreement.
The UA system declined to provide the “Exhibit D” document after reviewing a request for public records 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 would provide a competitive advantage,” the UA System spokesperson said, Nate Hinkel, in an email, quoting Ark. Coded. Ann. §25-19-105(b)(9)(A).
An acquisition proposal states, however, that “there would be no long-term service agreement, revenue sharing, or ongoing relationship with the current owners of the university after the transaction is completed.” As part of the deal, the UA system would “initially” employ about 240 faculty members and pay for the services of about 170 Grantham University employees.
Grantham University, based in Lenexa, Kansas, offers associate’s, bachelor’s and master’s degrees, as well as undergraduate and graduate certificates, in more than 60 academic 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 “successful.” But budget documents show that finances have fallen short of expectations.
UA System’s eVersity has not made a “debt payment” on a $5 million loan from other UA System campuses, according to its budget proposal earlier this year.
“For FY21, we expected eVersity to generate enough cash to pay the first debt payment to campuses for loans with them, but that didn’t happen. We will seek to restructure debt over a longer repayment period so that operations can stabilize,” eVersity’s draft budget states.
AU trustees in 2018 approved an extension of the time frame for eVersity to begin repaying the principal of the loan. Federal data lists eVersity as enrolling about 800 students.
Bobbitt, in his statement, referenced eVersity helping Arkansans who had completed college earlier in life but had not graduated.
“Their success in earning a title is imperative to their future and to the future of our state and our region,” Bobbitt said. “By acquiring the assets of Grantham University, we will be able to scale this effort to reach beyond Arkansas’ borders and diversify the educational offerings and revenue profile of our system.”
In recent years, some other major public universities have acquired or entered into agreements with for-profit institutions or institutions that started out as for-profit entities.
For-profit schools operate with different goals than public universities, said Robert Shireman, senior fellow at the Century Foundation, a think tank with offices in New York and Washington, D.C. that advocates for “equity economic, racial and gender in education, health care and work,” according to its website.
The University of Arkansas system, in considering acquiring the for-profit college, “would be buying an asset that has been in the hands of people whose primary motivation was to make money from it,” said Shireman said.
“What this has tended to encourage in for-profit colleges is low teaching expenses, in fact student education,” Shireman said, with the money instead being spent on recruiting and advertising. .
Shireman said it’s important in deals like these that a public university has “full control” over decisions about student recruitment and what’s best for students, rather than ” investors trying to extract money from the establishment”.
“The University of Arkansas has work to do to turn Grantham into an online university worthy of state university affiliation,” Shireman said.