March 20, 2014 6:10 pm

Thunderbird invites alternative bids for partnership deal

Thunderbird is throwing open its doors to a range of potential partners to try to secure the financial viability of the Arizona business school and to help it develop internationally.

The move follows the decision late last week by the Higher Learning Commission (HLC), the US university accreditation body, to reject Thunderbird’s plans to establish a joint venture with Laureate Education, the for-profit education company. However, Thunderbird president Larry Penley said that Laureate would be welcome to submit a proposal alongside other technology and publishing companies and other universities.

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“We’re not working exclusively with Laureate,” says Prof Penley. “We’re open to any number of alternatives.”

One potential alternative could be a proposal from the Thunderbird Independent Alumni Association (TIAA), which has lobbied tirelessly against the Laureate deal. Will Counts, executive director of the TIAA and a 2009 alum, told the FT that alumni would be prepared to stump up the money for such a deal. “There are funds available from hundreds of alumni,” he said. “To be honest, I think [we] could raise whatever it needed.”

The TIAA represents a small but particularly vociferous group of alumni. Others are more circumspect.

“The idea of Thunderbird doing a JV with a for profit education institution is fine by me,” says Adam Nilsen, who graduated from Thunderbird in December. “I even find it quite innovative and refreshing considering the changing landscape of graduate business education. I don’t believe that the overall concept is a problem for most people. Non-profit and for-profit education models both have pros and cons.”

The concern for Mr Nilsen is the choice of partner, he says, adding that he believes this is the issue for most students and alumni that have concerns. “We view Thunderbird as a top tier institution while we view Laureate as a second rate institution.”

Mr Nilsen is still undecided about the Laureate partnership. “There has been an ongoing, open dialogue on campus and I’ve fallen on both sides of the fence a few times,” he says. “I just wish that we could get resources from an equally prestigious partner.”

According to Prof Penley, the school needs $24m to clear its debts. “We’ve got to pay our debts but we have to have the capital to move ahead.”

The decision by the HLC to turn down the Laureate proposal was completely unexpected, says Prof Penley – he was “startled” by the news, he says. “To me higher education at this point needs innovation. To me it [the decision] is inconsistent given the way education is going.

“The divide between a for-profit and a not-for-profit is eroding,” he adds. “In my mind we have to look at the outcomes, not whether the organisation is a for-profit or a not-for-profit company.”

Timescales for negotiations with potential partners are necessarily tight, says Prof Penley. “We must move quickly to remove ambiguity for prospective students and to retain high-quality faculty and staff.”

This article has been updated since initial publication

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