University of Phoenix: An Albatross for Idaho?

The University of Phoenix will be back in Idaho District Court in 2025 unless Apollo Global Management can find another buyer for the school. Apollo Group, the primary owner of the University of Phoenix, has been trying to unload the school for years.  

Although the University of Phoenix appears to be a profitable institution, it has potential liabilities, including hundreds of millions of dollars in Borrower Defense to Repayment (fraud) claims that the US Department of Education could claw back from the parent owner. While this risk may be seriously reduced over the next four years, that danger could rise again under a progressive administration. 

As of 2023, there were approximately 73,000 Borrower Defense claims against the school. More than 19,000 Borrower Defense claims were approved for student debtors who attended the University of Phoenix and were part of the Sweet v Cardona settlement. Many of the remaining claims are still awaiting a decision from the Department of Education.  

University of Phoenix debtors are saddled with an estimated $21.6 Billion in student loan debt. 

The University of Phoenix has been involved in a number of lawsuits over the last decade. In 2019, the Federal Trade Commission and the University of Phoenix settled a claim for $191M for deceptive employment claims, but the school denied any wrongdoing.

Seventh Quarterly Report under Settlement Agreement in Sweet, et al. v. Cardona (US Department of Education)

The latest report regarding Borrower Defense to Repayment settlements has been published. National Student  Loan Data System records indicate that discharges have been fully processed for at least 195,5908 Class Members eligible for relief. Refunds have been fully processed for at least 194,782 Class Members eligible for relief.  

Borrower Defense to Repayment is a debt forgiveness strategy for consumers if they believe they were defrauded by a school and can document that fraud. The Project on Predatory Student Lending (PPSL) has provided assistance to thousands of consumers defrauded by for-profit colleges and still offers help. 

For consumer support regarding about Borrower Defense claims, we also recommend joining the r/Borrower Defense group on Reddit.  

List of Schools with Strong Indicators of Misconduct, Evidence for Borrower Defense Claims

Here (below) is a list of schools where there are strong indicia of misconduct, per the Department of Education and/or the Department of Justice. 

Student loan debtors who have attended these schools, and believe they were defrauded, are encouraged to file Borrower Defense to Repayment claims if they haven't already. 

More than 750,000 Borrower Defense fraud claims have been filed, and tens of thousands have resulted in debt forgiveness. Folks can also join the r/BorrowerDefense group on Reddit for support and guidance.  

Alta Colleges, Inc. (Westwood)

• Westwood College

American Commercial Colleges, Inc.

• American Commercial College

American National University

• American National University

Ana Maria Piña Houde and Marc Houde

• Anamarc College

Anthem Education Group (International Education Corporation)

• Anthem College
• Anthem Institute

Apollo Group

• University of Phoenix
• Western International University

ATI Enterprises

• ATI Career Training Center
• ATI College
• ATI College of Health
• ATI Technical Training Center

Baker College

B&H Education, Inc.

• Marinello School of Beauty

Berkeley College (NY)

• Berkeley College

Bridgepoint Education

• Ashford University
• University of the Rockies

Capella Education Company (Strategic Education, Inc.)

• Capella University

Career Education Corporation

• American InterContinental University
• Briarcliffe College
• Brooks College
• Brooks Institute
• Collins College
• Colorado Technical University
• Gibbs College
• Harrington College of Design
• International Academy of Design and Technology
• Katharine Gibbs School
• Le Cordon Bleu
• Le Cordon Bleu College of Culinary Arts
• Le Cordon Bleu Institute of Culinary Arts
• Lehigh Valley College
• McIntosh College
• Missouri College of Cosmetology North
• Pittsburgh Career Institute
• Sanford‐Brown College
• Sanford‐Brown Institute
• Brown College
• Brown Institute
• Washington Business School
• Allentown Business School
• Western School of Health and Business Careers
• Ultrasound Diagnostic Schools
• School of Computer Technology
• Al Collins Graphic Design School
• Orlando Culinary Academy
• Southern California School of Culinary Arts
• California Culinary Academy
• California School of Culinary Arts
• Pennsylvania Culinary Institute
• Cooking and Hospitality Institute of Chicago
• Scottsdale Culinary Institute
• Texas Culinary Academy
• Kitchen Academy
• Western Culinary Institute

Center for Employment Training

• Center for Employment Training

Center for Excellence in Higher Education (CEHE)

• California College San Diego
• CollegeAmerica
• Independence University
• Stevens‐Henager

Corinthian Colleges, Inc.

• American Motorcycle Institute
• Ashmead College
• Blair College
• Bryman College
• Bryman Institute
• CDI College
• Duff's Business Institute
• Eton Technical Institute
• Everest
• Everest University Online
• Everest College Phoenix
• Florida Metropolitan University
• Georgia Medical Institute
• Heald College
• Kee Business College
• Las Vegas College
• National Institute of Technology
• National School of Technology
• Olympia Career Training Institute
• Olympia College
• Parks College
• Rochester Business Institute
• Sequoia College
• Tampa College
• Western Business College
• WyoTech

Computer Systems Institute

• Computer Systems Institute

Court Reporting Institute, Inc.

• Court Reporting Institute

Cynthia Becher

• La' James College of Hairstyling
• La' James International College

David Pyle

• American Career College
• American Career Institute

Delta Career Education Corporation

• McCann School of Business & Technology
• Miami‐Jacobs Career College
• Miller Motte Business College
• Miller‐Motte College
• Miller‐Motte Technical College
• Tucson College

DeVry

• American University of the Caribbean
• Carrington College
• Chamberlain University
• DeVry College of Technology
• Devry Institute of Technology
• DeVry University
• Keller Graduate School of Management
• Ross University School of Veterinary Medicine
• Ross University School of Medicine

EDMC/Dream Center

• Argosy University
• The Art Institute (including The Art Institute of Atlanta, The Art Institute of California, and more)
• Brown Mackie College
• Illinois Institute of Art
• Miami International University of Art & Design
• New England Institute of Art
• South University
• Western State University College of Law

Education Affiliates (JLL Partners)

• All‐State Career School
• Fortis College
• Fortis Institute

Edudyne Systems Inc.

• Career Point College

Empire Education Group

• Empire Beauty School

Everglades College, Inc.

• Everglades University
• Keiser University

FastTrain

• FastTrain

Full Sail University

Globe Education Network

• Globe University
• Minnesota School of Business

Graham Holdings Company (Kaplan)

• Bauder College
• Kaplan Career Institute
• Kaplan College
• Mount Washington College
• Purdue University Global

Grand Canyon Education, Inc.

• Grand Canyon University

Infilaw Holding, LLC

• Arizona Summit Law School
• Charlotte School of Law
• Florida Coastal School of Law

International Education Corporation

• Florida Career College
• United Education Institute

ITT Educational Services Inc.

• ITT Technical Institute

JTC Education, Inc.

• Gwinnett College
• Medtech College
• Radians College

Laureate Education, Inc

• Walden University

Leeds Equity Partners V, L.P.

• Florida Technical College
• National University College
• NUC University

Liberty Partners

• Concorde Career College
• Concorde Career Institute

Lincoln Educational Services Corporation

• International Technical Institute
• Lincoln College of Technology
• Lincoln Technical Institute

Mark A. Gabis Trust

• Daymar College

Mission Group Kansas, Inc.

• Wright Business School
• Wright Career College

Premier Education Group L.P.

• American College for Medical Careers
• Branford Hall Career Institute
• Hallmark Institute of Photography
• Hallmark University
• Harris School of Business
• Institute for Health Education
• Micropower Career Institute
• Suburban Technical School
• Salter College

Quad Partners LLC

• Beckfield College
• Blue Cliff College
• Dorsey College

Remington University, Inc. (Remington College)

• Remington College

Southern Technical Holdings, LLC

• Southern Technical College

Star Career Academy

• Star Career Academy

Strayer University

Sullivan and Cogliano Training Center, Inc.

• Sullivan and Cogliano Training Centers

TCS Education System

• Chicago School of Professional Psychology

Vatterott Educational Centers, Inc.

• Court Reporting Institute of St Louis
• Vatterott College

Wilfred American Education Corp.

• Robert Fiance Beauty Schools
• Robert Fiance Hair Design Institute
• Robert Fiance Institute of Florida
• Wilfred Academy
• Wilfred Academy of Beauty Culture
• Wilfred Academy of Hair & Beauty Culture

Willis Stein & Partners (ECA)

• Brightwood Career Institute
• Brightwood College
• New England College of Business and Finance
• Virginia College

Idaho-University of Phoenix deal has fallen below the radar

For more than four months, neither the University of Idaho nor the University of Phoenix have reported on the status of the proposed deal between the two parties. The last local media report, from the Idaho Ed News came in July, when the University of Phoenix said they were still committed to partnering with Idaho.

The University of Idaho's University of Phoenix Affiliation FAQ page has not been updated and some of the information is obviously outdated. For example, the webpage said that the UI-UoPX sale was expected to be consummated in early 2024. That did not happen.    

 

Screen shot of the University of Phoenix Affiliation FAQ on November 9, 2024. 

Legislative and judicial barriers have delayed the acquisition and the deal remains in limbo. 

In June, the U of I Board of Regents extended the Asset Purchase Agreement through June 10, 2025. The extension allows the University of Idaho to continue negotiating with the University of Phoenix and to incorporate feedback from stakeholders. It would appear that any sale would require approval from the Idaho Legislature, which meets again in January 2025. In the interim, many important questions remain unanswered.

Despite its commitment, Apollo Global Management, the University of Phoenix's parent company, could sell the school to another buyer. But there has been no public mention (or even hints) of an alternative suitor. Since 2021, Apollo has tried selling the school to a number of buyers, most notably Tuskegee University, UMass Global, and the University of Arkansas System. The only deal to be made public before Idaho was in Arkansas, where concerns about the sale led to the deal falling through.

Information on how the school could be purchased continues to be limited. After a previous bond deal in Arizona fell through, the National Finance Authority (NFA) agreed to participate in the UI-UoPX financing. But there is no public information about how the bonds would be structured. Moody's previously said the $685 million purchase could result in a "multi-notch downgrade" in the University of Idaho's bond rating. 

According to the US Department of Education, more than 900,000 University of Phoenix debtors owe about $21.6B in federal student loan debt. And there have been more than 73,000 Borrower Defense to Repayment (fraud) claims made against the school.

The University of Idaho has previously said that any federal obligations for Borrower Defense to Repayment claims would be handled in court, even though more than 19,000 cases have already been settled in federal court, in favor of the student loan debtors. No matter how this could be handled legally, lawsuits related to the University of Phoenix could tarnish the image of the University of Idaho.