August 5, 2020

Questions About the University of Arizona-Zovio Deal

Questions About the University of Arizona-Zovio Deal

University of Arizona faculty and others are already asking tough questions about the deal, announced Monday to the campus community via a 3:00 am email, for the school to acquire Ashford University from the for-profit education company Zovio.

Professors are asking why many of the faculty were not consulted or even notified in advance about the deal, and why a flagship state university would want to associate itself with Ashford, which has repeatedly been investigated and sued by law enforcement agencies for deceiving and ripping off students. An education executive said to me, “After all the hard work that the UA faculty has done to become a prestigious university, their leadership has thrown them under the bus, so they can have a bigger school.”

On top of questions about the deal that Goldie Blumenstyk just asked in the Chronicle of Higher Education, here are more questions that regulators, legislators, accreditors, reporters, and others might want to pursue: 

  1. How much pressure was University of Arizona president Robert Robbins under from the Arizona Board of Regents to up his online college game, which has been notoriously unimpressive and under-enrolled, and were the Regents threatening to turn over the job to Robbins’s rival, Michael Crow, the extremely enterprising president of Arizona State?
  2. How do Robbins and Brent White, the University of Arizona’s dean of Global Campus, see this deal in terms of their legacies and their own financial futures? 
  3. Have Robbins and White, who claim their university is “aware of past controversies and investigations related to Ashford University and its parent company, Zovio,” really looked at all the bad behavior Ashford and Zovio have engaged in and the hardships caused to students? 
  4. Was the roll-out and consultation around this announcement even more of an ambush and insult to faculty than the 2017 Mitch Daniels announcement that Purdue University would buy for-profit Kaplan University?
  5. What are the implications of the deal for Ashford’s long-term arrangement with Forbes Media to license the Forbes name to Ashford’s Forbes School of Business and Technology, a big source of revenue for Zovio? Will Forbes’ Hong Kong-based owners seek more money to cater to Arizona’s global ambitions? 
  6. How lucky was Zovio CEO and founder Andrew Clark — who has been paid as much as $20 million in a single year while getting Bridgepoint/Zovio through a decade of awful publicity and investigations over predatory practices and educational deficiencies — to be approached by Arizona for this deal? How close was Clark, having faced rebuffs from Ashford’s accreditor, WASC, and even from Betsy DeVos’s for-profit-college-loving Department of Education, over his plan to convert Ashford to a non-profit, to being shut down or kicked out? Were there other suitors for the company, and did they include the secretive Colbeck firm? 
  7. When the U.S. Department of Education on July 8 reversed its decision to require from Zovio a $100 million letter of credit in order to approve the conversion of Ashford to non-profit status, was that because Zovio told them the deal with Arizona was imminent? (Probably yes, h/t someone smart.) 
  8. Have former Zovio (when it was called Bridgepoint) executives Robert Eitel and Scott Filter, now top higher education aides to DeVos, been recused from matters related to the company?
  9. Why, prior to Monday’s announcement, did Zovio stock steadily rise, from $1.11 per share on March 16 to $3.94 on July 31, on no real positive public news? Who has been trading the stock?
  10. Why did Michael Cole join the Zovio board of directors in February, after his investment firm, SevenSaoi Capital, took a 6.8 percent take in the company? 
  11. Are Ashford’s accreditor, WASC, and Arizona’s, Higher Learning Commission, going to be cool with all this?

UPDATE 08-06-20 11:15 am: “The University of Arizona’s acquisition of a for-profit university would cause ‘irreparable damage’ to the university’s reputation, risk lawsuits and harm relationships with donors and faculty, according to a letter faculty at the Eller College of Management sent to university leaders in June.”