The University of Phoenix today confirmed it has been talking with a nonprofit affiliate of the University of Arkansas System about a possible sale to the Arkansas entity.

Phoenix is one of the nation’s largest for-profit colleges and offers its courses largely, though not entirely, online.

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You’ll recall that Nate Hinkel, spokesman for the Arkansas system, first told the Arkansas Times on Tuesday about the potential purchase. Hinkel has not yet publicly identified the nonprofit, and the Phoenix spokeswoman, Andrea Smiley, said she did not have that information.

In a brief telephone interview today, Smiley said, “Being private equity owned, conversations regarding our future ownership have been ongoing for some time.” Regarding the UA System-related talks, she said, “I can confirm that, that conversation is occurring.”

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Asked if discussions with other prospective buyers also were under way, Smiley said, “That’s my understanding.”

Smiley said she was not aware of a prospective purchase price for the institution.

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A source commenting on condition of anonymity told the Arkansas Times on Tuesday that one cost estimate we’d been told —  $500 million to $700 million — was probably about right.

In a prepared statement, Smiley said, “Since our founding, University of Phoenix has been focused on serving adult learners who are historically overlooked and underrepresented in higher education. As we plan for the long-term future and longevity of the university, we are committed to and will remain focused on adult learners seeking to enhance their careers and lives through accessible, affordable and career-relevant higher education, regardless of our structure.”

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On Tuesday, Hinkel said he was not able to provide much detail because the discussions were ongoing.

“However, I do want to confirm that the UA System itself would not be acquiring the University of Phoenix and no public or university funds would be involved in this potential transaction,” Hinkel added. “The contemplated structure would also not include any remaining private ownership of the nonprofit entity or the University of Phoenix.”

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Hinkel said the nonprofit entity affiliated “would support and facilitate the transition of the University of Phoenix to completely independent nonprofit status, while supporting the university’s mission of advancing high-quality, career-focused education.” The process to nonprofit status would be gradual, he said.

The University of Phoenix, founded in 1976, has been beset with problems in recent  years. In December 2019, it agreed to a $191 million settlement with the Federal Trade Commission. The commission said the college had lured students with fraudulent claims about partnerships with major companies, The New York Times reported at the time.

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That sum included a $50 million penalty to the commission and cancellation of $141 million in debts, largely for unpaid tuition and fees, owed by tens of thousands of former students, The New York Times reported.

The University of Phoenix website says the college focuses on “adult learners” rather than the 18-22 year-old students focused on by most colleges traditionally. Classes are offered online or at a site in Phoenix. The website says the college’s other campus sites — in California, Hawaii, Nevada and Texas — are no longer enrolling students.

In June 2022, the University of Phoenix president, George Burnett, resigned just months after taking the post, USA Today reported. Documents obtained  by USA Today showed that the departure came after an inquiry by the Department of Education. The department questioned Burnett’s time overseeing Westwood College, a Colorado-based for-profit college that had run-ins with regulators over deceptive advertising among other concerns, USA Today reported.

According to the USA Today article, the University of Phoenix has about 75,000 students. The newspaper said the college, whose courses are largely offered online, received about $930 million in federal money meant for student financial aid in fiscal year 2020-2021. At its peak, the university had about 470,000 students in 2010, USA Today reported.

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