ASU to Create a For-Profit Spinoff to Court Students in the Work Force!

Dear Commons Community,

Arizona State University is creating a for-profit venture to promote its online programs to big employers. The venture will be majority-owned by the TPG Rise Fund, a $2.1-billion private-equity fund.  The announcement had some controversy in that TPG until recently was headed by one of the financiers arrested last week by the Department of Justice in its wide-ranging admissions-bribery dragnet/

As reported by The Chronicle of Higher Education:

“Although the financier, Bill McGlashan, is no longer head of the fund — he said he resigned last week; TPG said he was fired “for cause” — he may still stand to profit from the new ASU venture, if it takes off.  McGlashan, a self-styled voice of ethical investing in Silicon Valley, was accused of paying $50,000 to a fixer to help gain admission to the University of Southern California for his son by falsifying his test scores, and an additional $250,000 to create the false impression that he was a potential recruit for the football team, complete with a faked picture showing him as a kicker.

Arizona State’s new venture, which the university calls a “learning-services company,” will focus on developing partnerships with employers to attract more students to the ASU’s online programs, in the vein of its partnerships with Starbucks and Uber. The university is also looking for other research universities to join the venture.

ASU has not formally announced the creation of the as-yet-unnamed company. But after a Chronicle reporter learned of the deal, the university’s president, Michael M. Crow, described elements of it in an interview on Tuesday. The university had been planning an elaborate rollout of the venture in early April in San Diego at the ASU+GSV Summit, a glitzy gathering of thousands of investors, education-company officials, policy makers, and education leaders.

In creating the venture, ASU seeks an even bigger slice of the market for students whose tuition is paid in whole or in part by their employers, and better connections to that pool of students.

The potential to reach students via their employers is tantalizing to many colleges, given that some 36 million adults in the work force have some college experience but no degree, and millions more have no higher-education experience at all.

Colleges are attracted to the employer-paid market in part because it reduces their cost of recruiting students. Employers are being hotly courted on a national scale by institutions like Purdue University Global, Southern New Hampshire University, Western Governors University, and the University of Maryland University College, which just announced plans to change its name to the University of Maryland Global Campus and spend $500 million over the next six years to to build its visibility with a less-confusing brand name.

A private company, Guild Education, has also been a prominent player in the market, having signed deals with Chipotle, Disney, Walmart, and others. It provides coaching to students and helps them enroll in a select set of colleges approved by the employer, in return for a share of tuition.”

We wish ASU good luck and to be careful about the company it keeps.


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