![]() ![]() “I’m sure the purse price will be affected” by those claims, he said.īobbitt has said one of the proposal’s attractions is that one or more licensing agreements could yield roughly $20 million annually for use by the UA System. might have to make payouts as a result of the borrower defense claims. ![]() ![]() ![]() Lefkowitz suggested that the claims should result in a lower sale price for Phoenix since TES Inc. There’s no dollar estimate yet on what the potential Phoenix tab might be. Department of Education to erase their debts if a school has lied to them - about their job prospects, their credits’ transferability or their likely salary after graduation, NPR has reported.Īccording to the Education Department, 48,890 claims from former Phoenix students were pending as of Jan. That rule allows federal student loan borrowers to ask the U.S. The case centered on a federal rule known as borrower defense. Moore and those involvedįeel that the level of due diligence done by many experts taken borrower defense into consideration and that it is not a barrier in reaching the finish line on an affiliation.”Īrkansas was among the 20 states that had challenged that settlement in the case known as Sweet vs. In an email after that ruling, Hinkel said, “Dr. Supreme Court decision last week that refused to block a $6 billion settlement in a student loan case affecting many for-profit colleges, including Phoenix, and about 200,000 borrowers. Indeed, the purchase effort is still moving forward, despite a U.S. “It has accreditation, very good programs and” a good faculty, he said. Referring to the borrower claims, Lefkowitz said, “I do regard it as a major issue,” but not enough of one alone to say the proposed purchase of Phoenix should be shut down. And they could come down to millions of dollars in costs to whoever at the time owns the 79,000-student, predominantly online University of Phoenix, currently owned by Apollo Global Management.ĭespite the $500 million sum, Lefkowitz said he would guess Phoenix couldn’t expect more than $200 million as a purchase price considering its “diminished valuation.” Lefkowitz also cited the student borrowers’ unresolved claims, Phoenix’s regulatory problems and its huge decline in student enrollment - tens of thousands. That frankly complex issue comes down to five words: borrower defense to repayment claims. Lefkowitz said there’s another important factor in any purchase of the University of Phoenix, one of the nation’s largest online colleges. Lefkowitz, who is not involved in the UA System proposal, told the Times that “a lot of banks have lost tens or hundreds of millions of dollars” from such loans in the past. banks now decline to loan money to for-profits ,” explained Neil Lefkowitz, a Washington, D.C.-based attorney with expertise in college mergers and acquisitions. We’re not afraid of it because we are comfortable with who they are, and we know we can help them.”Īs for the deal possibly being rushed and a lack of faculty input, Green said the non-disclosure agreement complicates things.Indeed, there’s a reason the UA System is looking beyond the United States for financing. We are prepared to live with that at the University of Idaho. Because all private institutions are under attack. “… What I like about this new management team, is again, they’re focused on the students and they want to be a not-for-profit public institution because that helps them focus on their students…We recognize that as long as they are a private institution, and until the Department of Education would recognize them as public, there is some reputational risk there. “There is a reputational risk that comes with that, as long as there’s a private entity working for shareholders as opposed to the primary view being the students,” Green said. UI President Scott Green addressed this during the meeting. The lawsuit alleged that the university “engaged in deceptive advertising strategies and made false claims about post-graduation job opportunities for students.” Federal Trade Commission hit the university with a $191 million lawsuit. The online university has a somewhat muddy reputation. ![]()
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