Skip to content
ADVERTISEMENT
Sign In
  • Sections
    • News
    • Advice
    • The Review
  • Topics
    • Data
    • Diversity, Equity, & Inclusion
    • Finance & Operations
    • International
    • Leadership & Governance
    • Teaching & Learning
    • Scholarship & Research
    • Student Success
    • Technology
    • Transitions
    • The Workplace
  • Magazine
    • Current Issue
    • Special Issues
    • Podcast: College Matters from The Chronicle
  • Newsletters
  • Virtual Events
  • Ask Chron
  • Store
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
  • Jobs
    • Find a Job
    • Post a Job
    • Professional Development
    • Career Resources
    • Virtual Career Fair
  • More
  • Sections
    • News
    • Advice
    • The Review
  • Topics
    • Data
    • Diversity, Equity, & Inclusion
    • Finance & Operations
    • International
    • Leadership & Governance
    • Teaching & Learning
    • Scholarship & Research
    • Student Success
    • Technology
    • Transitions
    • The Workplace
  • Magazine
    • Current Issue
    • Special Issues
    • Podcast: College Matters from The Chronicle
  • Newsletters
  • Virtual Events
  • Ask Chron
  • Store
    • Featured Products
    • Reports
    • Data
    • Collections
    • Back Issues
  • Jobs
    • Find a Job
    • Post a Job
    • Professional Development
    • Career Resources
    • Virtual Career Fair
    Upcoming Events:
    An AI-Driven Work Force
    University Transformation
Sign In
News

Arizona State Will Create a For-Profit Spinoff to Court Students in the Work Force

By Goldie Blumenstyk March 19, 2019
Michael Crow, president of Arizona State U.
Michael Crow, president of Arizona State U.Laura Segall for The Chronicle

Arizona State University is creating a for-profit venture to promote its online programs to big employers. The venture will be majority-owned by the TPG Rise Fund, a $2.1-billion private-equity fund that until recently was headed by one of the financiers arrested last week by the Department of Justice in its wide-ranging admissions-bribery dragnet.

To continue reading for FREE, please sign in.

Sign In

Or subscribe now to read with unlimited access for as low as $10/month.

Don’t have an account? Sign up now.

A free account provides you access to a limited number of free articles each month, plus newsletters, job postings, salary data, and exclusive store discounts.

Sign Up

Michael Crow, president of Arizona State U.
Michael Crow, president of Arizona State U.Laura Segall for The Chronicle

Arizona State University is creating a for-profit venture to promote its online programs to big employers. The venture will be majority-owned by the TPG Rise Fund, a $2.1-billion private-equity fund that until recently was headed by one of the financiers arrested last week by the Department of Justice in its wide-ranging admissions-bribery dragnet.

Although the financier, Bill McGlashan, is no longer head of the fund — he said he resigned last week; TPG said he was fired “for cause” — he may still stand to profit from the new ASU venture, if it takes off.

McGlashan, a self-styled voice of ethical investing in Silicon Valley, was accused of paying $50,000 to a fixer to help gain admission to the University of Southern California for his son by falsifying his test scores, and an additional $250,000 to create the false impression that he was a potential recruit for the football team, complete with a faked picture showing him as a kicker.

Arizona State’s new venture, which the university calls a “learning-services company,” will focus on developing partnerships with employers to attract more students to the ASU’s online programs, in the vein of its partnerships with Starbucks and Uber. The university is also looking for other research universities to join the venture.

ASU has not formally announced the creation of the as-yet-unnamed company. But after a Chronicle reporter learned of the deal, the university’s president, Michael M. Crow, described elements of it in an interview on Tuesday. The university had been planning an elaborate rollout of the venture in early April in San Diego at the ASU+GSV Summit, a glitzy gathering of thousands of investors, education-company officials, policy makers, and education leaders.

In creating the venture, ASU seeks an even bigger slice of the market for students whose tuition is paid in whole or in part by their employers, and better connections to that pool of students.

Tantalizing Prospects

The potential to reach students via their employers is tantalizing to many colleges, given that some 36 million adults in the work force have some college experience but no degree, and millions more have no higher-education experience at all.

Colleges are attracted to the employer-paid market in part because it reduces their cost of recruiting students. Employers are being hotly courted on a national scale by institutions like Purdue University Global, Southern New Hampshire University, Western Governors University, and the University of Maryland University College, which just announced plans to change its name to the University of Maryland Global Campus and spend $500 million over the next six years to to build its visibility with a less-confusing brand name.

A private company, Guild Education, has also been a prominent player in the market, having signed deals with Chipotle, Disney, Walmart, and others. It provides coaching to students and helps them enroll in a select set of colleges approved by the employer, in return for a share of tuition.

ADVERTISEMENT

Crow said Arizona State had learned lessons from teaming up with corporations. The university’s deal with Starbucks, which now includes 8,000 degree-seeking students, has taught him that it’s difficult to create and sustain partnerships that fully meet the needs of employers and employees. It “costs a lot of money, money that we don’t have,” he said. The new services company, he added, will be the vehicle for Arizona State and other partners “to couple with corporations.”

The Arizona State venture, Crow said, would be distinct from competitors like Southern New Hampshire, Western Governors, and Guild because they are, or work in partnership with, what he called “teaching-only entities.” The ASU-Rise Fund venture will work only with universities with “research-grade faculty,” he said. Crow has written to several institutions about the deal, he said, but none has signed up yet.

Many of Arizona State’s online courses have technology enhancements to enrich the learning experience, he said; for this venture, the university was seeking out “only research universities that have elaborate online capabilities.”

Crow would not disclose the exact size of the Rise Fund’s investment, but he characterized it as in the “low tens of millions.” Two of the fund’s prior education investments — in the online-learning companies Everfi and Dreambox — were $150 million and $130 million, respectively. The Rise Fund will own a majority of the entity. Arizona State will hold a minority stake, and its ownership share could be diluted further, depending on the terms under which other institutions or investors join the venture, according to Crow.

ADVERTISEMENT

The arrest of McGlashan was an unwelcome development for the deal. “We don’t know this guy Bill,” Crow said. “We’re glad that Bill is gone.”

‘No Involvement’

McGlashan was chief executive of the Rise Fund, which was begun in 2017 with much fanfare and pledges to invest around the world in social-impact companies working in agriculture, education, energy, infrastructure, and other fields. Well-known philanthropists and Silicon Valley figures are involved with the fund, including the rock star Bono; Laurene Powell Jobs, the owner of The Atlantic magazine and president of the Emerson Collective; and Reid Hoffman, chief executive of LinkedIn. Arne Duncan, the former U.S. secretary of education, and Richard C. Levin, the former president of Yale University, are senior advisers to the fund.

When social-impact funds invest, they don’t typically expect the same big-dollar returns on their money as do typical private-equity funds. The new ASU venture will also be incorporated as a certified “public-benefit corporation.” Such corporations have more legal flexibility to pursue business avenues that aren’t necessarily routes to the highest profit. Crow said the fund expects a “fair return” on its investment and “unbelievable social-impact outcomes.”

Collage of admissions-bribery scheme, March 2019, w/o caption
Admission Through the ‘Side Door’
Dozens of people, including famous actors, college coaches, and a university administrator, have been charged by federal prosecutors for their alleged roles in an admissions-bribery scheme involving Yale, Stanford, and other elite institutions.
  • One Year After College-Admissions Scandal, 3 Questions About What (if Anything) Has Changed
  • 5 Questions to Consider in the Wake of the Admissions Scandal
  • The Bribery Scandal Revealed Holes in Admissions Oversight. Now Some Professors Want to Take Back That Role.

In a written statement to The Chronicle, TPG said the partnership had been established by its education-sector lead, John Rogers; Rise’s managing partner, Steve Ellis; and TPG’s co-chief executive, Jim Coulter. “Bill McGlashan had no involvement other than in his capacity as a member of Rise’s investment-review committee,” the statement says.

ADVERTISEMENT

Whether McGlashan benefits from the venture depends on how TPG and he resolve the nature of his departure from the firm. Partners in private-equity funds typically retain stakes in investments made during their tenure, although the terms of their contracts may ultimately govern what happens if they leave. A spokesman for the Rise Fund said in a written statement that “the details of Bill’s separation are still being worked out, and we cannot comment at this time.”

William (Rick) Singer, the “fixer” in the admissions scandal, had reportedly been paid by more than 800 people as part of his wide-ranging fraud, many of whom learned of his services by word of mouth from friends and colleagues. In a statement released last week, two days after McGlashan was arrested, TPG officials said they had hired an outside counsel “to conduct a thorough and independent review to determine whether any other person or part of the firm has been tainted in any way by the misconduct of which Bill has been accused. At the present time, we do not believe that to be the case, but it is important for all of us to be certain.”

Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at goldie@chronicle.com.

A version of this article appeared in the April 5, 2019, issue.
We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.
Tags
International Finance & Operations Innovation & Transformation Online Learning
Share
  • Twitter
  • LinkedIn
  • Facebook
  • Email
Blumenstyk_Goldie.jpg
About the Author
Goldie Blumenstyk
The veteran reporter Goldie Blumenstyk writes a weekly newsletter, The Edge, about the people, ideas, and trends changing higher education. Find her on Twitter @GoldieStandard. She is also the author of the bestselling book American Higher Education in Crisis? What Everyone Needs to Know.
ADVERTISEMENT
ADVERTISEMENT

Related Content

Meet the New Mega-University
Arizona State Will Give Uber Drivers in 8 Cities Free Tuition in Its Online Program
Why More Colleges Are Emulating Deals Like the ASU-Starbucks Alliance

More News

Black and white photo of the Morrill Hall building on the University of Minnesota campus with red covering one side.
Finance & operations
U. of Minnesota Tries to Soften the Blow of Tuition Hikes, Budget Cuts With Faculty Benefits
Photo illustration showing a figurine of a football player with a large price tag on it.
Athletics
Loans, Fees, and TV Money: Where Colleges Are Finding the Funds to Pay Athletes
Photo illustration of a donation jar turned on it's side, with coins spilling out.
Access & Affordability
Congressional Republicans Want to End Grad PLUS Loans. How Might It Affect Your Campus?
Florida Commissioner of Education Manny Diaz, Jr. delivers remarks during the State Board of Education meeting at Winter Park High School, Wednesday, March 27, 2024.
Executive Privilege
In Florida, University Presidents’ Pay Goes Up. Is Politics to Blame?

From The Review

Photo-based illustration of a tentacle holding a microscope
The Review | Essay
In Defense of ‘Silly’ Science
By Carly Anne York
Illustration showing a graduate's hand holding a college diploma and another hand but a vote into a ballot box
The Review | Essay
Civics Education Is Back. It Shouldn’t Belong to Conservatives.
By Timothy Messer-Kruse
Photo-based illustration of a hedges shaped like dollar signs in various degrees of having been over-trimmed by a shadowed Donald Trump figure carrying hedge trimmers.
The Review | Essay
What Will Be Left of Higher Ed in Four Years?
By Brendan Cantwell

Upcoming Events

Plain_Acuity_DurableSkills_VF.png
Why Employers Value ‘Durable’ Skills
Warwick_Leadership_Javi.png
University Transformation: A Global Leadership Perspective
Lead With Insight
  • Explore Content
    • Latest News
    • Newsletters
    • Letters
    • Free Reports and Guides
    • Professional Development
    • Virtual Events
    • Chronicle Store
    • Chronicle Intelligence
    • Jobs in Higher Education
    • Post a Job
  • Know The Chronicle
    • About Us
    • Vision, Mission, Values
    • DEI at The Chronicle
    • Write for Us
    • Work at The Chronicle
    • Our Reporting Process
    • Advertise With Us
    • Brand Studio
    • Accessibility Statement
  • Account and Access
    • Manage Your Account
    • Manage Newsletters
    • Individual Subscriptions
    • Group and Institutional Access
    • Subscription & Account FAQ
  • Get Support
    • Contact Us
    • Reprints & Permissions
    • User Agreement
    • Terms and Conditions
    • Privacy Policy
    • California Privacy Policy
    • Do Not Sell My Personal Information
1255 23rd Street, N.W. Washington, D.C. 20037
© 2025 The Chronicle of Higher Education
The Chronicle of Higher Education is academe’s most trusted resource for independent journalism, career development, and forward-looking intelligence. Our readers lead, teach, learn, and innovate with insights from The Chronicle.
Follow Us
  • twitter
  • instagram
  • youtube
  • facebook
  • linkedin