Originally posted on IdahoEdNews.org on October 11, 2023
The University of Idaho is refusing to release records that could address financial risks from the proposed University of Phoenix purchase.
On Sept. 22, Idaho Education News requested “reports, analysis or other data compiled by the University of Idaho or its consultants, regarding the exposure created by University of Phoenix student loans.” Student loan risk is one of the big questions surrounding the proposed $685 million purchase. The issue ramped up on Sept. 20, when the Biden administration announced a plan to write off $37 million in Phoenix student debts — a move that could affect the U of I.
The U of I has sought to downplay this risk, and on Friday, the university refused EdNews’ records request. U of I special counsel Kent Nelson cited three reasons for the denial:
- Records identifying Phoenix student loans belong to Phoenix, a for-profit online university. And as such, the records fall under a nondisclosure agreement that has shrouded many details of the proposed purchase. “To the extent the University of Idaho possesses any such records, they are exempt from disclosure,” Nelson wrote.
- Individual student loan records fall under the federal Family Educational Rights and Privacy Act.
- The U of I says its internal analysis is confidential, due to attorney-client privilege. “(The records) comprise advice by our attorneys and the underlying work product for that advice,” Nelson wrote.
But is the $37 million loan writeoff — affecting some 1,200 former Phoenix students — also going to affect the U of I or Four Three, the offshoot nonprofit that would take over Phoenix?
If it is, U of I officials aren’t saying. In an email responding to EdNews’ records request, Nelson added a response from legal counsel, outlining the U of I’s review of the issue.
The U of I assembled a team of advisers, including auditors and attorneys, to review the potential risk from student loan writeoffs. The due diligence identified “several tools … to mitigate exposure,” the U of I says.
In addition, Phoenix would leave $200 million on the balance sheet after a sale — and the U of I says Four Three would also be able to use this money to “hedge or mitigate risk.”