Idaho's first public university
wants to go private at least partly.
When the state's premier land
grant university announced about
a month ago it wanted to join up
with the University of Phoenix,
a private forprofit college,
it took a lot of people by surprise,
including some Idaho lawmakers
whose job is controlling the first
strings of the Moscow Bay School.
Well, several Several of those legislators,
members of the State Board of Education,
and leaders from EU of I got
together last week to talk about it.
With the goal of getting closer to an
affiliation agreement with EU of P,
the mostly online school whose ads
you've likely seen while watching
your favorite sporting event,
Vandal leadership says they see this
as securing their school's future,
since most students these days
lean toward less traditional
educational opportunities.
The purchase price?
$550 million.
But the two schools would
not just become one school,
it'd be two separate schools affiliated.
With unique identities.
So the surprise factor of this potential
purchase had several lawmakers wondering
about nondisclosure agreements.
How this deal got to this point with
very few people knowing about it.
You know, transparency stuff.
Here's Joe Paris.
The
target is on the table for
the University of Idaho.
They hope to make a deal to affiliate
with the University of Phoenix to
improve access to education around Idaho.
University of Idaho says the purchase
would be financed through non
taxable and taxable bonds through
a new nonprofit organization they
would set up to manage assets
of the University of Phoenix.
Idaho lawmakers have major
questions about the deal.
We see that this transaction has potential,
but we also see that it has risk
and as elected representatives we
on this committee specifically.
Have the duty of fiscal oversight of
the taxpayers money. Representative
Wendy Horman is one of the leaders
on Idaho's budgeting committee.
They meant to ask questions to University
of Idaho and state board leaders.
We want to trust, but we must verify.
And if we can't verify, we can't trust.
We want to ensure that this deal is
constitutional, legal, financially sound.
And that Idaho taxpayers will not pay
the price if if the deal does go awry.
If the deal does go awry and loses money,
University of Idaho President Scott Green
says U of I is agreeing to guarantee
up to $10 million annually to cover
payments if the nonprofit they set up to
manage the project cannot cover funds.
But U of I advocates for the deal say
that they aren't concerned because of
the University of Phoenix's documented
ability to generate substantial cash flow.
I hang up for lawmakers centers on
nondisclosure agreements or ND A's.
The University of Idaho and state
board leaders sign that prevents
them from sharing details of the
deal and projections of operation.
I fully recognize the way this transaction
was conducted was not ideal and
then probably was not my preference.
But as those of you who work in business
know, sometimes we have to play the cards
that were dealt and make compromises
to reach agreements to get done this.
This transaction came to us very recently.
We quickly identified the transaction
and we put together review team of the
best and brightest experts out there.
Lawmakers expressed that they
understood the principle of the
Nda's would still question how they
and the public are supposed to
understand the deal and risks with it
without access to more information.
President Green explained that the NDA
is also benefit Idaho as the buyer.
On the buyer side,
what it enables us to do is go
in and take a look at the books
and records at a detailed level,
ask detailed questions,
assess for ourselves the risk involved.
And get our experts,
which we have worldclass experts here,
the best in the business,
to take a look at that and determine Okay,
what are the risks?
Lawmakers ask questions about the
deal and risk surrounding it.
For about two hours,
U of I and state board leaders essentially
explained that public money was only
at risk in a worst case scenario,
something leaders concede is
highly unlikely but still a risk.
Some lawmakers are hoping and
asking if the Nda's can be
dropped ahead of the deal closure.
This transaction is not done until
it's closed and in the meantime
that competitive information could
get out into the marketplace
and to their competitors.
So I'm just saying I just don't
see them doing that.
You know, it's unfortunate,
but it's kind of you know
where it is and that's kind
of the way business is done.
Idaho lawmakers also questioned if
executive session meetings at the state
board level violated any possible laws,
implying that it could have been
an oversight of very strict rules
on making business deals behind
closed doors away from the public.
State Board and U of I leaders explain their
process and assured lawmakers that they
are aware of the rules and followed them.
But Ryan, lawmakers will continue to,
you know, research the topic
and ask a lot of questions.
Meanwhile, if all this does go through
the accrediting boards for the University
of Idaho and the University of Phoenix,
they need to approve this.
Make sure that you know,
everything is on the up enough.
That wouldn't happen towards
the very end of the year.
So November,
So a long way to go,
but there's a lot of important questions.
But it was a pretty unique
business deal here,
I assume when President Green said this
came upon us rather quickly, this had.
Do with the OR our state of Arkansas
saying no to a similar type deal
with the University of Phoenix,
is that correct? Yeah.
And the University of Phoenix had
kind of been working with the state
of Arkansas and the University
of Arkansas for several years
and you could ask the people in
Arkansas what happened there.
But Long story short,
the deal didn't go through.
So all the sudden the University
of Idaho is on the table as an
option and it looks like it's,
it's got a strong chance of happening,
but we'll see.
All right. Look into it a little bit further.
All right. Thank you very much, Joe.