The faculty senate of the University of Arkansas at Fayetteville said today that it opposes acquisition of the University of Phoenix by a nonprofit affiliated with the UA System.

In an email accompanying an open letter to System President Donald Bobbitt and members of the board of trustees, Stephen E. Caldwell said, “As Chair of our Faculty Senate, it is my duty to represent and express the concerns of that body on all matters effecting our campus. I cannot think of any other issue that has so universally bound our faculty into a singular voice, and I am proud to represent that voice.”


Under the proposal, which the UA System has been considering roughly 19 months, a nonprofit created in August and affiliated with the UA System — Transformative Education Services Inc., or TES Inc. — would buy the University of Phoenix, one of the nation’s largest for-profit colleges. A source has estimated the cost at $500 million to $700 million, money which UA System officials have said would come from private, not public, funds. Phoenix also would not become a part of the UA System under the plan and would gradually be converted to a nonprofit university.

Bobbitt has estimated that a licensing agreement being negotiated with Phoenix could yield roughly $20 million annually for use by the UA System. Licensing agreements allow approved usage of certain brand names and images.


The faculty senate’s letter said, “We recognize that the proposed $20 million licensing agreement between Phoenix and the System could have a beneficial impact if it proves to be sustainable, but we have serious reservations about that sustainability.”

The faculty senate also expressed concern because of the Phoenix school’s history of problems financial and otherwise.


“Though you acknowledge the ‘checkered past’ of the University of Phoenix, we feel you are too quick to dismiss those problems as being in the past,” the letter said. “We feel the reputation of Phoenix’s history will linger for years to come, and our campus is at the most risk for association with it.

“The University of Phoenix has proven itself, through strikingly low graduation and retention rates, to be unsuccessful at helping students reach their educational goals, anathema to what we do here on the Hill. As the flagship campus, the System brand is inextricably linked to the Razorbacks, to Old Main, and the brand-defining world-class instruction that takes place on our campus every day.


“Phoenix’s well-documented history of dishonest and predatory practices with students resulting in poor educational experiences are the defining features of the University of Phoenix brand, in opposition to ours,” the letter said.

The senate letter also said Arkansans can see that “access to world-class education need not flow through back door acquisitions of entities from Arizona but rather that world-class structures already exist in our state.”


“These structures are taught and supported by Arkansas citizens,” the senate added.

The letter said Apollo Global Management, the current owner of the University of Phoenix, has nearly $550 billion of assets under management.


“For them, this deal represents just .09% of their total” assets under management, the letter added. “The projected purchase price, however, represents a total greater than many of the annual budgets of system institutions. If the University of Arkansas System sees the need to make a $500 million investment in the future of higher education, let’s make that investment here in the only state in America where one can still find diamonds.”

The letter acknowledged that the faculty senate was “initially put off by the secrecy in which this proposal began and how it was reported,” but said members now  appreciate the time Bobbitt has since taken to talk with the senate about the matter.

The statement about the UA System making the investment prompted system spokesman Nate Hinkel to stress again “that the contemplated structure of this potential deal would use no public funds and that the University of Arkansas System is not acquiring University of Phoenix.”

Hinkel said those facts have been “heavily reported” and “explained in great detail,” though he said parts of the letter were “misleading” in this regard. “It’s important to be clear about that so there isn’t any confusion,” he said.


He said he has not had a chance to talk with Bobbitt or Michael Moore, the system’s vice president for academic affairs, and had no further comment at this time.

Asked if the senate vote was unanimous or otherwise, Caldwell said the senate almost always has one or two people away on sabbatical. “In this case 88% of our Senate,” or 48 of 54 senators “chose to add their name to the letter in support,” he said.

“No senator expressed support for the acquisition, and no senator expressed opposition to this letter as written and sent,” Caldwell added.