Purdue to Kaplan: "I'd buy that for a dollar"
May 8, 2017 11:53 AM   Subscribe

In late April, Purdue University said it will buy for-profit Kaplan University for $1, with plans to turn it into a new, nonprofit Indiana public university for “nontraditional adult learners.” The announcement was a surprise to the general public and Kaplan's students, about 32,000 current students will transfer to the new institution, nicknamed "New U" for now. While noteworthy in its scale, this is part of a trend -- for-profit companies develop online program managers (OPMs), then design, run, and market the virtual programs for non-profit colleges, but this deal goes beyond those. In comparison to several hundred other OPM contracts, this new contract is OPM "on steroids."

The deal is not finalized, and it may still falter.
Faculty members at Purdue University took a strong stance against [the] unorthodox acquisition of Kaplan University, passing a University Senate resolution calling the deal a violation of common-sense educational practice and respect for Purdue faculty.

The resolution calls on Purdue President Mitch Daniels and the university’s Board of Trustees to rescind any decisions possible about the online-heavy university Purdue is acquiring from Kaplan. It also calls on Purdue leaders to include faculty members in all decisions made going forward about the soon-to-be-acquired university.

That wording could catch the attention of Purdue’s accreditor, the Higher Learning Commission. HLC has to sign off on the acquisition before it can close, as do state and federal regulators. Accreditors generally expect a prominent faculty role in academic-related decisions.

“It’s not final until it’s got all the approvals it needs to receive,” David Sanders, an associate professor in Purdue’s department of biological sciences who is the chair of the University Senate, said in an interview after the Senate met Thursday. “There could be components to the agreement that could be changed.”
That resolution was signed at an emergency, finals-week session of the University Senate, given the sudden announcement of the planned partnership with Kaplan, who would provide extensive "back-office" services, including the marketing, the recruitment, student financial aid, student advising, as well as human resources and the technology platform itself as part of the current deal. But when facing the faculty, Purdue President Mitch Daniels Daniels, for his part, was a degree contrite about the secrecy of the process, which included more than five months of code word-level negotiations to bring for-profit Kaplan University, its hundreds of programs, 32,000 students and 2,462 faculty members under the Purdue umbrella.

(The above-linked Journal & Courier article includes a helpful summary of the past few years where Daniels has fought with faculty, on issues from his proposed standardized way to measure student body's intellectual growth in 2014; then in the summer of 2015, faculty persuaded reluctant trustees to delay a vote on revised promotion and tenure policies that hadn’t been vetted by the University Senate, and last year it was adoption of the university’s new free speech policy. )
posted by filthy light thief (24 comments total) 19 users marked this as a favorite
 
about 32,000 current students will transfer to the new institution, nicknamed "New U" for now.

As long as we're headed firmly toward an Atwood dystopian hellscape, rather than a mere Orwell or Huxley, can we just expedite things and go straight to calling it AnooYoo?
posted by Mayor West at 12:11 PM on May 8, 2017 [7 favorites]


That's correct, although it's fairly common even when schools close for there to be a "teach-out" period during which the last enrolled students finish up, so that the school doesn't have to refund the loans.
posted by praemunire at 12:25 PM on May 8, 2017 [1 favorite]


As long as we're headed firmly toward an Atwood dystopian hellscape, rather than a mere Orwell or Huxley, can we just expedite things and go straight to calling it AnooYoo?

Sounds like a great place to get #ANuStart.
posted by Strange Interlude at 12:31 PM on May 8, 2017 [11 favorites]


can we just expedite things and go straight to calling it AnooYoo?

Sounds like a great place to get #ANuStart.

Tags added, for posterity (or something).
posted by filthy light thief at 12:37 PM on May 8, 2017 [5 favorites]


Kaplan will continue to run the university, collecting 12.5% of the new school’s revenue for 30 years.

How does that make any sense for Kaplan? Why would they do this?
posted by miyabo at 12:43 PM on May 8, 2017 [2 favorites]


Purdon't.
posted by kevinbelt at 12:53 PM on May 8, 2017 [6 favorites]


Advogatus diaboli chiming in here:

When an accredited university with a good reputation and a nonprofit charter takes over a large online education operation and effectively turns it into an extension school, I'd be inclined to call it a step in the right direction.

If, that is, the faculty were onboard, which clearly was not the case here.
posted by ocschwar at 1:03 PM on May 8, 2017 [7 favorites]


As a Purdue grad, I'm not convinced that this is a good idea. For one thing, the Purdue degree is valuable. A Purdue degree, especially in certain areas like engineering, really is pretty damn close to a golden ticket to a good job straight out of school. (Note - I don't have one of those golden ticket degrees) If thousands and thousands of less rigorously educated people can claim Purdue degrees from an online school that isn't applying that same level of rigor to the curriculum or expectations, what happens over time to the value of the Purdue degree?

I get that education is changing, online is more and more important, and Purdue wants to get in front of the trend. All laudable goals, I'm just not sure Kaplan is the way to do it. It may come with too much baggage.
posted by COD at 1:12 PM on May 8, 2017 [3 favorites]


> How does that make any sense for Kaplan? Why would they do this?

On the assumption that Kaplan knows fucking well what they're doing and therefore found a way to turn this into a cash grab, here's my guess: "Run the university" only means Kaplan is under contract for the administrative staff and their expenses, they're probably going do better than break even in the first year and any increase in enrollments in successive years is just pure profit. After all, they're primarily an online university -- At a minimum the front office is an executive suite and the rest of the non-faculty staff are devops and an offshore call center -- and now expenses for them and the physical locations will be carried by Purdue.
posted by at by at 1:14 PM on May 8, 2017 [2 favorites]


miyabo: How does that make any sense for Kaplan? Why would they do this?

You might not be able to tell it from the current section on Degree credibility and debt load on Kaplan University's Wikipedia entry, which currently reads:
In 2010 Kaplan and other for-profit education companies came under scrutiny from the U.S. Congress due to concerns that the industry leaves too many students with heavy debts, and with credentials that are of little help in finding jobs.[42] Much of the report focused on Kaplan College programs, which are no longer a part of Kaplan University. Although the report was critical of Kaplan Inc, Senator Tom Harkin, then chair of the investigating committee noted, "Kaplan stands alone among the large, for-profit education companies for having taken what are, in my opinion, real and significant steps to reduce high withdrawal rates and high default rates by implementing the Kaplan Commitment program."[43]
But back in 2010, Kaplan University had numerous shady practices to overbill students, and it had a lot of students, thanks to acquiring 75 small colleges and agressive marketing, which lead to Kaplan higher education revenues [eclipsing] not only the test-prep operations, but all the rest of the Washington Post Company’s operations (WaPoCo is/was Kaplan's parent company).
Though Kaplan is not the largest in the industry, the Post Company chairman, Donald Graham, has emerged as the highest-profile defender of for-profit education.

Together, Kaplan and the Post Company spent $350,000 on lobbying in the third quarter of [2010], more than any other higher-education company. And Mr. Graham has gone to Capitol Hill to argue against the regulations in private visits with lawmakers, the first time he has lobbied directly on a federal issue in a dozen years.
And in 2016, Kaplan Higher Education was to pay roughly $1.3 million under a civil settlement with the USDOJ to 289 students because the company employed unqualified instructors at its campuses in Texas.

In short, Kaplan University can clean its name and image, and get back into profit-making.
posted by filthy light thief at 1:43 PM on May 8, 2017 [7 favorites]


Ah, so a sleazy for-profit education company helps fund good journalism? Oh, dear.
posted by Melismata at 2:00 PM on May 8, 2017 [2 favorites]


It did; revenues from Kaplan supported the Washington Post Company for many years. The Post no longer owns Kaplan, however; when Jeff Bezos bought the paper he turned it from a public to a private company (a good move, IMO) and did not buy any of the other companies that the former Washington Post Company owned.
posted by Pallas Athena at 2:26 PM on May 8, 2017 [6 favorites]


Thanks. Pallas Athena. I should have clarified that Bezos bought the Post in 2013 (previously), and the newspaper is owned by Nash Holdings LLC, a holding company Bezos created for the acquisition.
posted by filthy light thief at 2:29 PM on May 8, 2017 [2 favorites]


I research higher ed for a living (my opinions are not those of the etc. etc.) and I'm intrigued to see where all of this goes. No one's really seen anything like this before, though I've heard murmurs of for-profit/nonprofit mergers in the pipeline for similar reasons to Purdue's choice to purchase this piece of Kaplan.

Purdue seems like a potentially good test case since they already have a bunch of extension campuses (not all of which are selective, by the way, in counter to COD's comment). So, more or less seconding ocschwar, it's shady that they did this out of the blue with no lead-up whatsoever and no consultation with faculty, but there's a possibility that could be the only shady part of this.
posted by capricorn at 4:18 PM on May 8, 2017 [2 favorites]


Mitch Daniels is involved. "Shady" comes with the territory. Certainly, "anti-labor" does, anyway.
posted by Thorzdad at 5:00 PM on May 8, 2017 [4 favorites]


Isn't Daniels notorious in Indiana higher-ed circles as basically Mike Pence's gun, aimed at liburrl academe? I admit ignorance on the issue, but over the years I have never heard one good thing about the fellow from my many Hoosier connections. Through that lens, doesn't this look like Daniels taking the opportunity to set up his ideal version of an academic institution, which would tend toward dystopian employment and intellectual fredom policies?
posted by mwhybark at 5:02 PM on May 8, 2017 [1 favorite]


miyabo: How does that make any sense for Kaplan? Why would they do this?

For profit educational institutions are more heavily regulated than non profits. Now that Purdue owns them Kaplan can go back to marketing "as usual" avoiding all those rules about not screwing students over.


posted by clblfl at 5:05 PM on May 8, 2017


Isn't Daniels notorious in Indiana higher-ed circles as basically Mike Pence's gun, aimed at liburrl academe?

No. Mitch Daniels, though I didn't vote for him, and though he sullied himself a bit as OMB director under W., was a smart competent Governor who stayed away from the social conservative bullshit that mired doofus Pence.

He's a Republican, yes. But he isn't corrupt and he isn't a moron.
posted by leotrotsky at 5:07 PM on May 8, 2017 [3 favorites]


Non profit versus for profit
posted by clblfl at 5:11 PM on May 8, 2017


Purdue seems like a potentially good test case since they already have a bunch of extension campuses (not all of which are selective, by the way, in counter to COD's comment).

For those unfamiliar with Indiana Higher Ed, we don't really have community colleges (ivy tech is the only one), instead IU and Purdue run satellite campuses across the state that serve effectively the same function. If this can serve as a virtual extension I can see it serving an unmet need currently filled by scummy for-profit schools.

Like COD, I'd be curious to know how Purdue brands it to avoid diluting their own brand as a top engineering school.
posted by leotrotsky at 5:14 PM on May 8, 2017 [3 favorites]


I point my finger at outsourcing. Why does every goddamn thing have to be outsourced?
posted by scratch at 7:22 PM on May 8, 2017


Kaplan always struck me as a 'con'. Daniels has a long track record of market failures. Here's another one coming up. Mining decades of 'value' from Purdue's good name. If the Kaplan model was a 'success' why's it being sold. I suspect a tax scam by Kaplan in connivance with Daniels.
posted by SteveLaudig at 7:22 PM on May 8, 2017 [1 favorite]


I'd disagree with the comment that Daniels isn't corrupt or a moron. He constantly assured his no skill lawyer sister with cushy government jobs that she wasn't qualified, let alone the most qualified, for. That is corrupt. As far as a moron, only in his moral senses is he that. Always favoring the powerful and wealthy over the poor and politically weak, that isn ethical 'moronicity'. And he made Pence possible.
posted by SteveLaudig at 7:26 PM on May 8, 2017 [3 favorites]


I worked for Kaplan's test prep arm for years. Let's say I wouldn't be keen on this if I were in any way associated with Purdue.

But honestly, as long as the new combined entity is committed to the fight against H.O.W.A.R.D. I suspect it will be OK.
posted by 1adam12 at 7:51 PM on May 8, 2017 [1 favorite]


« Older "I did your job once. I was good at it."   |   Social justice, callout culture, and their... Newer »


This thread has been archived and is closed to new comments