OPINION: Will this (University of) Phoenix rise again?

After a rough patch during the 2010s, the University of Idaho found in Scott Green a president who took care of business, understood Idaho, was up front with the public and staff and set the university on a pathway to financial recovery.

Idaho-born, Harvard Business School-trained and New York City-experienced, he led the university during five years to a balanced budget, good relations with the State Board of Education and the Legislature, and a steady, slightly increasing growth in enrollment. Those years marked the end of revolving door presidents at the university.

Then in 2019, and throughout the pandemic and the gruesome murders of four students, there seemed to be a firm hand on the wheel.

So why is UI in the crosshairs of the Legislature, the media, much of its faculty and even some U.S. senators?

Because the university has decided to deal with a predicted financial challenge by buying the University of Phoenix. That financial crisis is happening because declining enrollment will decrease income from student tuition and because many members of the Legislature don’t want to fund public higher education. They include, sadly, Moscow’s own senator, Dan Foreman.

If student enrollment declines because of a reduction in the teenage population, and if the Legislature won’t fund its traditional commitment to accessible education for its citizens, then UI needs to turn elsewhere.

When the university heard that the University of Phoenix was for sale, it became interested in the idea of buying the very large private online university with 76,000 students. Phoenix would make money for UI. But it is exactly the purchase of a private, for-profit university by a public university that led Idaho Legislative Services Office legal counsel Elizabeth Bowen to question the deal. She says that a public entity, like UI, shouldn’t buy and operate a for-profit business without state legislative authorization.

Why is the Legislature concerned now, some 10 months after the Phoenix purchase was announced? Mostly, lawmakers are angry that nobody asked their opinion. Not only was the deal made without their input or their consent, but it was presented as a done deal after being negotiated behind closed doors. Can public business be done without the public?

Not only is it a question of whether the lack of transparency about the purchase is legal, but importantly whether it makes for good decision-making. It might be argued that in the fast pace of modern corporate financial dealings, one needs secrecy and speed. But the essence of public decision-making is that everyone involved is at the table. The justification for secrecy must be more than that a private equity corporation requires it.

The private equity firm in question is Apollo Group Management, one of the world’s four largest asset managers. Its subsidiary is the Apollo Education Group, which is the owner of the University of Phoenix. Apollo bought the Apollo Education Group for $1.14 billion in 2017 and six years later is offering to sell Phoenix to a nonprofit partner of the UI for $500 million.

Apollo also owns Scion-Health, which owns St. Joseph Regional Medical Center in Lewiston, part of a trend of private equity firms buying hospitals, medical clinics, mobile home parks and educational businesses (such as EMSI, now Lightcast, in Moscow). They exist to make money. So why doesn’t Apollo want Phoenix anymore?

Would a full-blown public discussion of the UI purchase of the University of Phoenix have been helpful? Yes. There would have been many questions. Many would have been of the “worst possible case” variety. They might have forced more complete answers to such questions as:

Will the poor national reputation of the University of Phoenix hurt its own future enrollment and therefore its income to the UI — and/or future enrollment at the UI? Will the purchase hurt the academic reputation of the UI, making it more difficult to attract scholars, research dollars and alumni donations?

Who will be responsible for Phoenix’s debt if Phoenix should close?

What will be the impact on the UI’s credit rating of its association with Phoenix, an institution with a weak credit history and the largest student debt in the U.S., which Phoenix might be responsible for?

What to make of all this? There might be answers to some if not all these questions. But what is the answer to this question: Why don’t we know the answers? Yes, the public can become more skeptical in how we interact in the public arena. The public can pay more attention to local news. It can talk less about President Joe Biden and former President Donald Trump and talk more about Phoenix and Luma (the state’s new $100 million financial accounting system that doesn’t seem to work).

But the reality is we didn’t know about Phoenix because we were not told. A number of outstanding journalists at Idaho Education News, The Idaho Statesman and The Moscow-Pullman Daily News tried to find out. And they did provide us with some news. But they didn’t get their questions answered, either, after repeated queries and Idaho public records act requests. The advantage of transparency, in spite to the short-term pain of dealing with skeptics, is that all aspects of a challenging decision are considered.

We need a process, in the public’s business, to involve more input in decision making. Public hearings help, but the input is not organized or analyzed. How about requiring an economic impact study for all major public economic decisions? Why not a comprehensive report covering the problem, before decisions are made? Made public, it would increase public awareness and involvement while reducing the chances of the decision becoming unraveled later. All of which might be happening in the Phoenix deal.

Nelson lives in Moscow where he volunteers for the Kenworthy Performing Arts Centre and supports libraries.