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The University of Phoenix will pay the University of Idaho $17.24 million to end their planned acquisition.
Education Images/Universal Images Group via Getty Images (left); Scott Olson/Getty Images (right)
More than two years after detailing plans to acquire the University of Phoenix, the University of Idaho won’t be buying the for-profit college after all.
The University of Phoenix said Tuesday that the two institutions agreed to “end discussions regarding a potential affiliation.” The $685 million deal, first announced in May 2023, was criticized by lawmakers and others in Idaho who worried about risks of acquiring a large for-profit university that faced significant scrutiny from regulators and allegations that it violated federal law.
Under the now-scrapped deal, a new nonprofit affiliated with Idaho would take control of Phoenix, an online university with more than 85,000 students. The deal would have helped Idaho expand its online offerings, generate revenue and broaden its reach, university officials have said.
“Although we continue to see great value in University of Phoenix, it has become cost prohibitive, and potentially distracting to our other work, to continue conversations,” Idaho president Scott Green said in a statement. “We respect the University of Phoenix and wish them all the best. We appreciate their commitment to these conversations, and we learned many things we may be able to incorporate into our work.”
The University of Idaho will get about $17.24 million in termination fees from Phoenix, according to a university news release. That money will cover Idaho’s due diligence costs related to the deal and includes a $5 million payment Phoenix already paid for the extension agreement.
The final dissolution of the slow-moving deal was largely expected. The two sides faced a June 10 deadline to rework the agreement and address concerns from lawmakers, who failed to approve the acquisition last spring. In April, they had made little progress, according to Idaho Education News. University of Idaho officials said they were waiting on Phoenix.
Now, Phoenix officials are planning to continue to operate as an independent, private institution. Bloomberg reported in March that the university’s owners were considering an initial public offering to make Phoenix a publicly traded company.
“While we have decided not to move forward, we remain appreciative of President Scott Green, the leadership of the University of Idaho, and the many elected officials in Idaho who supported this process," said Chris Lynne, president of the University of Phoenix, in a statement.
The University of Phoenix, which was once the largest university in the United States, has sought a sale for years. Before the University of Idaho, the University of Arkansas looked into buying Phoenix but also didn’t move forward.
Other for-profit colleges merged with public universities in recent years, though some advocates have criticized those acquisitions. In 2020, the University of Arizona purchased Ashford University, rebranding it as University of Arizona Global Campus. Arizona governor Katie Hobbs criticized that acquisition in 2024, and U of A moved to fully absorb the online college into its operations. In August 2023, the Education Department under President Biden made clear that it considered the University of Arizona liable for Ashford’s wrongdoing and on the hook for discharged student loans. That decision was considered a “warning shot” to other universities seeking to acquire for-profits.
The Idaho state board of education will meet Thursday to formally sign off on the breakup.
