Purdue University recently announced its intention to acquire the for-profit Kaplan University system. If approved, the move would set a major precedent in the integration of for-profits with traditional colleges and universities. Purdue President and former Governor of Indiana Mitch Daniels said, “A public university coming together with an established online university I think is by any definition a national first.”
The Kaplan system, which includes online learning programs, 15 campuses, 32,000 enrolled students and 3,000 employees, was purchased from its parent company, Graham Holdings, for $1 in a revenue sharing agreement that allows current Kaplan officials to continue running the new entity. Under the terms of the agreement, Kaplan will receive 12.5% of the public, nonprofit benefit corporation’s yearly revenue. If the merger is approved, Purdue will solidify its position as the first large flagship university to merge with a major for-profit player in online education.
Critics in higher education see the new partnership as a way for Kaplan to rebrand by becoming a non-profit and attaching itself to a reputable university. Bob Shireman of the Century Foundation—a think tank that investigates for-profit institutions—told the USA Today that the deal is like a bad restaurant being able to claim new ownership in order to improve its reputation without making any additional changes. Nonprofit schools are not subject to the strict regulations that have been placed on for-profit institutions in recent years. Critics also point out that Kaplan has been the focal point of past government investigations and lawsuits.
Many of the faculty at Purdue University disagree with the decision. The Purdue University Senate has passed a resolution against the Kaplan merger condemning the Board of Trustees for entering into a deal with little faculty input. Some worry that the Purdue brand will be diluted and students will be left with insignificant degrees. Bill Mullen, a Purdue professor, criticized the school by saying, “They (faculty) were never consulted about this plan, even though it is their work and excellence that has made Purdue one of the elite Universities in the world. Daniels (Purdue’s President) dirty deal with Kaplan permanently stains Purdue’s academic reputation and ruthlessly exploits the labor of its students, staff, and faculty.”
Donald Graham of Graham Holdings, Kaplan’s parent company, says Kaplan and Purdue “share the critical mission of expanding access to education,” and views the deal as mutually beneficial. Purdue will be able to tap into a new online market and student demographic, while Kaplan will become part of a respected public Purdue system. Proponents believe the merger will provide new opportunities for nontraditional as well as former students who want to resume educations they previously put on hold. The acquisition depends on approval from both state and federal regulators, including the Department of Education and the Higher Learning Commission. If approved, the deal has the potential to change the way traditional higher education institutions operate, with more for-profit to nonprofit partnerships likely.
For updates on the Kaplan deal, changes in higher education administrators, and school accreditation info visit our website at hepinc.com.