U of I downplays risks from Phoenix student loan writeoffs

For at least the second time, the University of Idaho has edited its “frequently asked questions” page on its proposed University of Phoenix purchase.

This rewrite downplays the chances that the U of I could wind up on the hook for tens of millions of dollars in student loan writeoffs.

“It is expected that the University of Phoenix would be able to meet its own obligations,” U of I officials wrote.

The question of student loan writeoffs — or discharges — has taken on new urgency in recent weeks.

In August, the U.S. Department Education said it was writing off $72 million in Ashford University student loans, a move that could affect the school’s nonprofit partner, the University of Arizona. And on Wednesday, the feds announced a writeoff of $37 million in Phoenix loans, involving 1,200 former students.

The U of I’s updated FAQ page does not directly address the $37 million Phoenix writeoffs. But the U of I says the Ashford situation is a different story — partly because Ashford lost in a civil trial, and Phoenix has not.

“If University of Phoenix were to face a (borrower defense to repayment) recoupment demand based on a large-scale loan forgiveness action similar to Ashford’s, the University of Phoenix is prepared to vigorously challenge such action on appropriate grounds,” U of I officials wrote.

Phoenix and U of I officials have said the U of I is exposed to some risk from loan writeoffs, if the $685 million purchase of the for-profit online behemoth goes through.

Phoenix has pegged the possible exposure at $1.5 million per year. The U of I has said the risk could reach $7 million or more. But these estimates predate the feds’ recent Ashford and Phoenix loan writeoff announcements.

If the Phoenix sale goes through, possibly in early 2024, a U of I affiliated nonprofit, Four Three Education, would assume Phoenix’s assets and liabilities.

Kevin Richert

Kevin Richert

Senior reporter and blogger Kevin Richert specializes in education politics and education policy. He has more than 35 years of experience in Idaho journalism. He is a frequent guest on "Idaho Reports" on Idaho Public Television and "Idaho Matters" on Boise State Public Radio. He can be reached at [email protected]

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