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1/ You may have read today that the University of Arizona "purchased" online for-profit Ashford University.
That's not actually what happened.
Let me explain why.
That's not actually what happened.
Let me explain why.
2/ Ashford is technically owned by the publicly-traded company "Zovio," until last year known as Bridgepoint Education. Nearly all of Zovio's revenue comes from Ashford. They are essentially the same thing.
3/ If @UArizona had actually bought Zovio, it wouldn't exist anymore, right? And yet, it does! Right there on the NASDAQ. Indeed the stock price is up a healthy 28% just today.
4/ The second clue that this was not a "purchase" in the commonly used sense of that word comes from this Wall Street Journal article. https://www.wsj.com/articles/university-of-arizona-to-acquire-ashford-university-in-online-push-11596452400
5/ That's weird, right? Normally if you buy something, you pay money to whoever owns what you're buying. But here, Zovio is making a big cash payment *to* @UArizona, not the other way around.
6/ That's because the whole deal is not really a purchase at all.
Instead, @UArizona is creating a new, profit-making "non-profit" called "The University of Arizona Global Campus" which will not *be* @UArizona but which will be--presumably?-- controlled *by* @UArizona.
Instead, @UArizona is creating a new, profit-making "non-profit" called "The University of Arizona Global Campus" which will not *be* @UArizona but which will be--presumably?-- controlled *by* @UArizona.
7/ That entity will "purchase" Ashford from Zovio in exchange for $1...and a 15-year contract that pays Zovio 19.5% of revenues from UofA Global Campus nee Ashford, plus reimbursement for costs.
8/ What will Zovio--which, remember, is Ashford--do in exchange for costs-plus-19.5%? All the same things it does now--except the for-profit college is does them for will have been magically transformed into a wholly-owned nonprofit subsidiary of a public university.
9/ PERHAPS NOT COINCIDENTALLY, Bridgepoint--sorry, "Zovio"--has spent the last few years trying and failing to get approval from its accreditor to become a non-profit university on its own.
Why would it want to do that?
Why would it want to do that?
10/ Probably to remove the taint of various scandals and lawsuits related to ripping off students and the federal student loan system. https://www.latimes.com/local/education/la-me-edu-becerra-lawsuit-20171129-story.html
11/ This is in many ways the natural next step in a journey of status laundering that began in 2005 when Bridgepoint purchased the small, faltering Franciscan University of the Prairies in Iowa and used its accreditation to stand up a giant online college based in San Diego.
12/ Now all of that has been safely hidden beneath the umbrella of @UArizona's reputation, brand, and legal status.
Just don't call it a purchase.
Just don't call it a purchase.
13/ If you want to read more about these kinds of transactions: https://www.huffpost.com/highline/article/capitalist-takeover-college/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAIqI86rKTmvoOjRvbcv8w8T15ALnWS6A9W6nuC7Oi-Psv9w8-pE8Gxa-yzKbTptjoE02dnB7G0brOvOBb1WsAdUtySl3JLItgDDK5x2G6Gx8JecWGlDVYsvVhoBSjMIthl0GdLm4WRCMEn-iQTx0MykxDKWTOd4-aoX2iGQIeMxt
Some more thoughts: https://twitter.com/kevincarey1/status/1290646005042556928?s=20
