When the University of Arizona announced its acquisition of Ashford University, a for-profit online college with a history of fraudulent marketing practices that saddled students with debt and questionable degrees, administrators assuaged dissenters with a promise: The beleaguered school would increase student diversity and provide a guaranteed source of revenue.
But less than four years later, as the public university stares down the barrel of a multimillion-dollar budget shortfall, the merger is coming into focus as a significant contributor to the university’s financial instability.
The online university — rebranded as the University of Arizona Global Campus, or UAGC — has yet to turn a profit for UA. Instead, it has added hundreds of millions of dollars to the university’s costs after Zovio, the educational technology company that ran UAGC’s operations, shut down last year.
Meanwhile, enrollment in the online university has plummeted since the start of the acquisition, with the online school hemorrhaging about a third of its student body in less than four years. Still, UA and UAGC officials both say they are betting on an enrollment boom.
A trove of public records surrounding the initial merger in 2020 obtained by The Arizona Republic shows UA President Robert Robbins and top university officials were aware of the online school’s concerning trajectory, including a downward enrollment spiral that began years before and dismal graduation and retention rates.
But they instead focused on creating a public relations campaign that would obscure the deal’s risks and make the merger palatable to faculty members. Months before it was announced, Robbins was making plans for dinner at his home to discuss the deal with executives of the online university’s managing company, one of several overtures between the leaders.
Early on, those pushing for the deal knew it would face tough questions.
“Do you know the current retention and graduation rate at Ashford?” Brent White, one of the university officials responsible for the merger, wrote to another university official in a May 29, 2020, email. At the time, the six-year graduation rate was 9%.
“The Wikipedia page on Ashford reads like a hit job … We really do need a PR firm immediately.”
It’s interesting that the interim CFO, an outsider appointed by the state Board of Regents to step in and fix the budget shortfall, is actually defending the acquisition.
Of course, he’s just talking about future cash flows while ignoring the fact that faculty are bearing the brunt of the budget cuts and hiring freezes required to make this work.