U of Idaho President Seems To Temper His Cheerleading for U of Phoenix Purchase (David Halperin)

In testimony Monday before a joint committee of the Idaho legislature, University of Idaho president C. Scott Green seemed a little less committed to the deal he has relentlessly touted for more than a year and a half — for his school to buy, for $685 million, the huge for-profit University of Phoenix from private equity giant Apollo Global Management.

According to Idaho Education News, Green said the next move was Apollo’s. “We’re waiting to hear what they would like to do,” Green said.

Green’s plan has been thwarted again and again, with negative votes in the Idaho legislature, a successful court challenge by the state’s attorney general, criticism from the state treasurer, and sharp scrutiny from news outlets in the state.

The Green school deal has assumed that operation of Phoenix would bring millions in new revenue to fund his university. But it ignores that running a for-profit college, one that has repeatedly gotten in trouble with law enforcement, would be a tremendous challenge: If Green pushed to end Phoenix’s predatory practices and improve student outcomes, it probably would start losing money, because predatory practices, coupled with high prices and low spending on education, have made up the school’s secret sauce. But if Green allowed the deceptive conduct to persist, the school could face more legal peril. And, whatever route he took, Green’s school might end up assuming massive liability for student loan debt the government has cancelled based on past abuses at Phoenix.

At its peak, Phoenix was the largest for-profit college in the country and got upwards of $2 billion a year in federal student aid, while boasting dismal graduation rates and high levels of loan defaults.

Last summer, the University of Idaho and Apollo agreed to a one-year extension of their purchase deal. That arrangement expires June 10. Meanwhile Apollo has the right to talk with other potential buyers.

Apollo already has sent Idaho $5 million to cover the school’s high-priced legal and consulting fees in connection with the deal, and it has agreed to pay up to $20 million to Idaho if the deal falls through.

Green told the legislature that $20 million would cover his school’s costs with perhaps $2 to $3 to spare. “I think we’re well-protected,” he boasted.

Kind of. Green, whose background is in corporate management and finance, could potentially walk away without losing money for the school. But he has tied up state university, executive, legislative, and judicial resources for many hundreds of hours jousting over an effort that would keep alive a predatory school that has buried thousands of graduates in debt they can’t afford to repay, while wasting billions in federal taxpayer dollars, when that time could have been focused on the real challenges of state higher education.

If Idaho can’t work out a deal, Apollo may run out of options to dump the school, and this taxpayer-funded multi-billion dollar disgrace may at last be put down.

[Editor's note: This article originally appeared on Republic Report.]