![]() Our review indicates that the BDR claims against UoP are vastly inflated.”Īccording to Hinkel, Bobbitt has also “said that he expects representation in some way from UA Trustees” on the TES Inc. To put a finer point on it, when you hear critics say that UoP or another university ‘could’ face a BDR claim in the $$$$ range, keep in mind that is a worst case scenario and assumes there is no opportunity for the university to defend themselves. They look forward to offering a vigorous defense of their business practices and the review of each claim. Moore also said Phoenix believes “that the vast majority of the claims against them would not hold up under review and, in fact, many claims that are being reviewed are being discarded. “Phoenix is very sophisticated about this kind of stuff.” Phoenix is careful in that it “records every conversation with students” seeking to borrow money, he said. Moore said last week that colleges could ask that the student borrower claims be resolved individually, rather than as a class. Licensing agreements allow approved usage of certain brand names and images.īecause the UA System “is very underfunded compared to other states,” Lefkowitz said, the licensing income makes the proposed deal “favorable to the UA” System. “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. Indeed, there’s a reason the UA System is looking beyond the United States for financing. ![]()
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