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U.S. Senators Voice Concern Over Online University Purchase

Two U.S. senators have shared their concerns over the University of Arizona’s recently announced agreement to purchase a for-profit college and use it’s assets to bolster its online offerings.

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(TNS) — Two U.S. senators have shared their concerns over the University of Arizona’s agreement to purchase a for-profit college and use it’s assets to bolster its online offerings.

Sen. Dick Durbin, D-Illinois, and Sherrod Brown, D-Ohio, said in a letter to UA President Robert Robbins that the university must take steps to ensure students are not taken advantage of.

“Without clear protections for students built into this transaction by UA, its accreditors and the Department of Education, Arizona taxpayers risk becoming owners of a predatory for-profit college cloaked in the aura of your prestigious university,” the senators wrote.

The UA agreed to purchase Ashford University for $1 and add its assets — including the San Diego school’s 35,000 online students — to create the University of Arizona Global Campus. The new platform will be a separate nonprofit, fully online entity. It will serve as an expansion of the Global Campus, made up of 150 sites worldwide.

UA officials said the 18- to 22-year-old population makes up most of its students, but the deal would boost UA’s support for nontraditional and underrepresented students as well as its online offerings.

“It helps us to serve a population of students that are often left behind and those are individuals who may not have had the opportunity for whatever reason to go to a university out of their high school education,” said Robbins. “These are primarily working adults, and I am very excited and proud that the University of Arizona is going to serve this population of students.”

Ashford’s owner, Zovio, which is an education technology services company, will pay $25 million annually for the first five years of a $225 million, 15-year agreement, according to an SEC filing. It will then pay $10 million annually to complete the contract before being up for a renewal.

The agreement also calls for Zovio to receive annual tuition revenue to the tune of 19.5% after the UA Global Campus covers its direct costs of operations.

Zovio providing its recruiting, student advising and financial aid counseling services is one of the points of concern for the senators due to the for-profit college being in legal trouble in recent history.

“The organization — and in some cases individuals — responsible for Ashford’s shameful record as a for-profit college are slated to continue to be responsible for a variety of key functions of the UA Global Campus — many of those the very functions for which Ashford was investigated and sued.”

Zovio, formerly known as Bridgepoint Education, is still facing a San Diego Supreme Court case set for April 2021. A suit was brought against the company by the state of California in 2017 for allegedly using its admissions office to make false promises regarding prospective students’ financial aid to get them to enroll.

Illegal debt collection practices were then used to get the struggling students to pay their bills, according to California Attorney General Xavier Becerra, who filed the lawsuit.

“Ashford, now owned by Zovio, has been a major player during a period of the last two decades that a group of state attorneys general referred to as “open season” on students because of the systemic defrauding of students and fleecing of taxpayers across the for-profit college industry,” the senators’ letter said.

In 2014, Zovio paid a $7.25 million settlement with Iowa Attorney General Tom Miller for consumer fraud.

“Unfortunately for many Ashford students, they did not receive the degree they had hoped for or the job they were led to believe they would be offered after graduating. What they did end up with was a crushing amount of student loan debt,” Miller said following the three-year investigation.

In 2016, Zovio was ordered to pay $30 million by the Consumer Financial Protection Bureau for deceptive acts, including misleading students regarding their loans.

Robbins pointed to the WASC Senior College and University Commission, the regional accrediting agency for Ashford, saying the main concerns around these practices had been addressed in its latest report.

“As we did our academic due diligence, governance due diligence and business due diligence, we were satisfied that we could go in, take over this university, serve the students and provide our mission support of being a land grant university,” Robbins said.

Meanwhile, the senators recommended the UA’s Global Campus’ Board of Trustees should have clear policies in place, including “independent oversight structures” and an elimination of class-action bans, which force students to give up their rights to sue or join a class-action suit against an entity that may have caused them harm.

The senators’ letter only added to the list of concerns, some of which echoed previous topics mentioned by a group of six professors within the UA’s Eller College of Management. They were one of several groups consulted in June about the potential Ashford purchase.

Under a nondisclosure agreement, the UA administration unveiled more information about the proposed agreement naming it the “DigiCat Project” and changing the names of Ashford and Zovio to “Antelope” and “Zebra” respectively.

The professors called the deal a potential “catastrophic mistake” and presented their reservations in a response to the administration.

“A quick google search reveals that less than 29% of their students graduate … the average student leaves with $36,000 in debt,” the group said about Ashford.

“Furthermore, enrollment at Antelope (Ashford) University has dropped by an average of 10.54% per year over the past seven years. If this trend continues, we estimate that Antelope University will lose somewhere between $35 million to $94 million per year over the next five years. Hence, we believe the DigiCat project is a bad investment.”

The group also said associating with Ashford University and its history of predatory practices could harm the UA’s efforts to attract instructors and donors.

Robbins said earlier this month he’s mindful of things that may effect UA’s brand.

“One of the issues is that Ashford was a for-profit university, and there have been practices around aggressive recruiting and individuals not finishing their degrees but having large debt,” Robbins said. “I think we’ve got to execute and make sure that we deliver a high-quality, ethical education to these students, and I’m confident that we will do that or I wouldn’t have agreed to do this deal.”

©2020 The Arizona Daily Star (Tucson, Ariz.). Distributed by Tribune Content Agency, LLC.