- The University of University, an online for-profit institution based in Kansas, for $1 to build out the system’s virtual offerings.
- The system will gain around 4,000 Grantham . The purchase will surpass the by U of Arkansas’ online platform, called eVersity, to 60.
- The acquisition will help the system “reach beyond the borders of Arkansas” and diversify its educational offerings and revenue sources, U of Arkansas System President Donald Bobbitt .
The acquisition will help expand the U of Arkansas’ eVersity platform, attractingbefore earning their degrees. The system joins the ranks of other institutions that have bought for-profit universities to bolster their online offerings amid nationwide enrollment declines.
The number of traditional-age students is expected to decline sharply after 2026 due to lower birth rates during the Great Recession.cliff by looking to recruit other types of students.
“With the declining number of traditional-age students — 18- to 22-year-olds — we need to find additional markets to be successful,” Michael Moore, the system’sfor academic affairs, said during a board meeting Wednesday. “The market is the most attractive market.”
That includes learners with some college, but no degree, often called. One 2019 report estimated that roughly had left college without completing a credential. The U of Arkansas System 200,000 former students who didn’t graduate in the last seven years.
System officials said the acquisition of Grantham, founded in 1951 and heavily recruited veterans, will help it reach adult and stopped-out students.
The acquired college will join the U of Arkansas System as a “unique new campus,” according to a system statement. It will become a nonprofit under the deal and eventually combine with eVersity.
OPMs help colleges launch and grow their virtual offerings, often in exchange for a cut of their tuition revenue, typically between 40% and 60%. The system launched eVersity in 2015, and the online university nowper semester. The deal means expanding the university’s online presence without relying on the help of an online program .
“Unlike often-criticized OPM relationships, there would be no long-term service agreement,, or ongoing relationship with the current university owners after the transaction is complete,” a proposal states.
The system plans to take on the“discrete liabilities,” though the purchase agreement draft doesn’t include them. An official said during the meeting that the liabilities include ongoing service agreements.
It may have made more sense to acquire an online institution than to work with an OPM, as OPMs tend to focus on graduate programs, said Trace Urdan, managing director at investment banking andTyton Partners. “If you’re a public institution and want to be at scale in the degree-completion , the more obvious path is to acquire that institution,” Urdan said.
Other universities have taken a different approach. They’ve bought for-profit institutions for nominal fees needed to make the acquisitions official, but in return, they’ve also entered long-term service contracts with the for-profits’.
The University of Arizonathe for-profit Ashford University for $1 to create a new online institution. In exchange, the university contracted with Ashford’s former parent company for educational services.
The deal is similar to Purdue University’s acquisition of Kaplan University to create Purdue University Global for $1. Kaplan’s parent company likewise provides educational services to the online university under a 30-year agreement.
The Arkansasmay also help Grantham. The university would struggle if it continued to operate independently, said Thomas Macon, that owns Grantham.
According to federal data, Grantham’s enrollment slid from a high of nearly 12,600 students in the fall of 2014 to around 7,100 students five. During the Wednesday board meeting, Macon said that recent federal regulatory changes targeting the for-profit sector would make it harder for the university to operate independently. Grantham University’s governing board must still approve the deal, which will review the matter Thursday.