U. of Arizona Is Tightening Its Embrace of Troubled UA Global Campus. Will Reputational Damage Follow?
The University of Arizona announced last week that it plans to acquire and operate its affiliated University of Arizona Global Campus, a nonprofit online institution borne out of UA’s 2020 purchase of the for-profit Ashford University.
The move comes at a tumultuous time for UA Global Campus. The U.S. Education Department recently told UAGC that because it had changed owners, it would be unable to collect federal student aid unless it immediately provided the department a financial audit or a 25-percent letter of credit to the tune of $103 million. Additionally, UAGC is under pressure from its accreditor to boost student outcomes or receive a sanction, and Zovio — Ashford U.'s former parent company and UAGC’s operating partner — is currently facing a lawsuit from the California attorney general for misleading students to encourage enrollment and using illegal debt collection methods.
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The University of Arizona announced last week that it plans to take over and operate the University of Arizona Global Campus, a nonprofit online institution created after UA purchased the for-profit Ashford University in 2020.
The recently announced move represents a deepening of the relationship between the university and UAGC, a nonprofit entity that has been affiliated with the university but has been led by different chief executives and governed by different boards. The move follows a tumultuous few years for UAGC, which has been a vehicle for Arizona to reach a wider market of adult students, but which some critics say is a losing venture for the land-grant university. Faculty members, lawmakers, higher-ed experts, and others have raised concerns about how Arizona’s continuing relationship with the nonprofit could put it in dangerous legal territory and tarnish the flagship’s reputation.
In November, the U.S. Education Department told University of Arizona Global Campus that it would be unable to collect federal student aid unless it immediately provided the department a financial audit or a 25-percent letter of credit to the tune of $103 million. The next month, the department placed UAGC under heightened cash monitoring, which is an extra level of financial scrutiny. So the university signed a temporary provisional agreement with UAGC and the University of Arizona Foundation, which makes the university liable for UAGC’s performance requirements for Title IV funds. UAGC and the University of Arizona amended the terms of their affiliation agreement, which had originally specified that they would remain separate entities for at least three years. As a result of the amended agreement, the university is starting the process of absorbing its affiliate.
Jon Dudas, UA’s senior vice president and secretary, told The Chronicle that the process could take 12 to 18 months, or more.
UA Global Campus, meanwhile, is under pressure from its accreditor, the Western Association of Schools and Colleges Senior College and University Commission, which wrote in June that it “has strong concerns that the targets set for academic improvement are seriously inadequate to reach levels of student outcomes that should be expected at an accredited institution.” The commission also sought further information and analysis about UAGC’s marketing, retention, and student-success efforts.
A report from a recent site visit to UAGC’s headquarters, in Chandler, Ariz., is expected to come to the accrediting commission this month. The commission could penalize the online-education provider based on that report.
Dudas said the goal is for UA Global Campus to eventually fall under the Higher Learning Commission, the same accrediting body as the University of Arizona.
“We feel pretty good about where accreditation is going,” Dudas said. “Regardless of what the outcome is, we feel like it’s good that we’re more involved or can be more involved.”
Jamienne S. Studley, president of the WASC Senior College and University Commission, said it would be a “substantive change” for Arizona to take over a separately accredited institution, though she added that it would be a matter for the other accreditor, HLC, to consider.
At the same time, Zovio — Ashford’s former parent company and UAGC’s online program manager — is facing a lawsuit from the California attorney general for allegedly misleading students to get them to enroll, and for using illegal debt-collection methods. Prosecutors are reportedly seeking $100 million in penalties and restitution for students they say were harmed; the University of Arizona has sought to distance itself and UAGC from that lawsuit, saying any damages would be for Zovio and Ashford to pay.
Through a company spokesperson, Zovio denied that it ever “systematically misled” students. The company believes that its former practice of adding debt-collection fees to overdue bills complied with California law, according to the representative.
Phil Hill, an educational-technology consultant and blogger, said the University of Arizona is naïve if it thinks the Zovio lawsuit won’t affect them.
“If you put everything on a partner that can’t deliver, you’re screwed, too,” he said. Those who want to attack UAGC, he said, “can anchor their criticisms against this lawsuit.”
Questions and Concerns
Faculty members are now trying to learn more about how the acquisition could affect them. Melanie Hingle, an associate professor of nutrition at the university and vice chair of the faculty, told The Chronicle that not much happened during the year and a half after the Ashford purchase, and then in November “suddenly the timeline sped up.”
“We have a lot of questions about what is happening,” she said.
Among them, said Jessica J. Summers, a professor in the department of teaching, learning, and sociocultural studies and chair of the faculty, are how much the university is going to invest in the merger and how it will change UA’s system of shared governance.
Dudas said the university administration plans to work with the faculty to hash out these issues.
“If we had done this over three years, we would have been discussing this over those three years,” Dudas said. “The impetus for doing it sooner was the Department of Education giving us these options.” Regarding any concerns that the faculty, accreditors, or Board of Regents have, he said, “We intend to work together over the next several months to really work through each of these issues.”
According to the Arizona Daily Star, UA Global Campus enrolls approximately 28,000 students, a level that Zovio executives characterized in an earnings call as having “remained challenging.” UAGC did not respond to a request for comment from The Chronicle.
Hill, the ed-tech expert, said he believes the University of Arizona committed itself to Ashford, and now UAGC, out of a genuine desire to serve Arizonans by making education more accessible. The Global Campus acquisition may also help Arizona compete with Arizona State University’s online-education program, which enrolls almost 54,000 students, according to the Arizona Daily Star — more than eight times UA’s online enrollment of 6,500.
“It’s a different model than a traditional University of Arizona model, but it’s an important model,” Dudas said. “There are a number of people out there, a number of students who, for whatever reason, didn’t have the opportunity to go to school right out of high school. And we want to make sure we provide them with education.”
Summers said she believes the University of Arizona is in a good position to “turn things around” for the former for-profit college.
“That for-profit piece really does lie with Zovio, and they’re in a lot of trouble right now,” she said. “Who knows what that’s going to look like in the coming months because of pending litigation? But we’re not associated with that liability, and the reputation of UAGC can hopefully stand on its own.”