Purdue-Kaplan Deal Blurs Lines Between For-Profit and Public Colleges

"As far as universities go, Kaplan and Purdue could not have been more different. Kaplan University, which operated under parent company Graham Holdings, a $3.2 billion corporation, was part of the troubled for-profit college sector. Purdue is generally considered one of the best public universities in the United States and the world," Kevin Kinser writes for The Conversation

"Be that as it may, the two schools joined forces in a remarkable union that was formally approved this week by the Higher Learning Commission, the agency that accredits both institutions.

The move enables Kaplan to shed its for-profit status and the stigma associated with it. In a sense, you might think of Kaplan as having married up.

Many for-profit institutions have converted to nonprofit status, and vice versa. But this is the first time a publically traded for-profit university has become part of a state system of higher education.

It’s not hard to understand why Kaplan would want to ditch the for-profit label. The for-profit sector has declined dramatically since its height in 2010. Enrollment crumbled under accusations that for-profits provided low-quality education and used fraud and deception to recruit unwitting students, leaving many in debt and unable to get a job to pay back loans. After new regulations and oversight added unprecedented levels of accountability, large for-profits like Corinthian Colleges and ITT Technical Institute declared bankruptcy due to cash-flow problems related to legal issues and restrictions in access to federal financial aid. Kaplan gains a lot from turning to Purdue and leaving the for-profit world behind.

Last year, Purdue agreed to take over Kaplan University as its online education arm. Unlike Kaplan’s interest in moving away from for-profit status, Purdue’s decision to fold a for-profit college into its operation was surprising. But why would Purdue link arms with a for-profit institution?

In his presentation announcing the deal, Purdue President Mitch Daniels framed the move as an extension of his university’s public mission. He argued that as a land-grant university, Purdue provides broad access to higher education, but that there are still millions of students who are not being served. Online education can be a solution to this problem, but Daniels argued that Purdue could not build enough capacity quickly enough to address the need on its own. Daniels concluded that Purdue needed to buy that capacity from a school that already had it.

That school ended up being Kaplan University. For the bargain price of just one dollar, Purdue acquired Kaplan’s programs, students and faculty. A separate board of trustees will govern Purdue Global, the name of this new online education endeavor. Board members will be selected by Purdue, according to the university. Indiana students are eligible for in-state tuition for all Purdue Global programs just like at other public institutions in the state. Other than that and changing the name to Purdue Global on their diploma, most other aspects of the Kaplan University student experience will continue into Purdue Global."

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Publication Date: 3/8/2018

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