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Purdue acquires for-profit Kaplan University
Purdue acquires for-profit Kaplan University
By Danielle Douglas-Gabriel April 27 at 10:44 AM
Purdue University said Thursday it has acquired for-profit Kaplan University to extend its reach into online and adult education, an unusual move for a public institution. .... Instead of folding the for-profit school into its operations in Indiana, Purdue plans to form a new, public university comprising of all 15 campuses and learning centers of Kaplan University, as well as 32,000 students and 3,000 employees. The state university will pay $1 upfront and enter into an agreement with an affiliate of Graham Holdings Company, the parent of Kaplan Inc. and Kaplan University, that could yield the company 12.5 percent of the new university’s revenue.
The deal calls for Kaplan to provide operational support, including marketing, human resources and financial aid administration, to the new institution for an initial term of 30 years with a buyout option after six years. Kaplan is not entitled to any expense reimbursement, until the new university has covered all of its operating costs and set aside $10 million in each of the first five years. Once those conditions are met, Graham Holdings will be reimbursed for its costs and receive a percentage of the school’s revenue, according to a company filing.
“This is a deal fraught with dangers,” said Century Foundation senior fellow Robert Shireman, a former undersecretary of education. “The bulk of the operations is still run by Kaplan. … There is nothing in this deal about the pricing of these programs and there’s barely guidelines around Kaplan’s costs.”
....
Kaplan University has drawn its share of scrutiny from authorities. Attorneys general in Illinois, Delaware and North Carolina have launched separate investigations into the university in recent years, which Kaplan officials say were only inquiries. Massachusetts reached a settlement with the school in 2015 over allegations that it misled students about job placement rates for its vocational programs. That same year, Kaplan also paid $1.3 million to resolve a federal whistle-blower’s allegation that the company employed unqualified instructors at its campuses in Texas.
....
Danielle Douglas-Gabriel covers the economics of education, writing about the financial lives of students from when they take out student debt through their experiences in the job market. Before that, she wrote about the banking industry. Follow @DaniDougPost
By Danielle Douglas-Gabriel April 27 at 10:44 AM
Purdue University said Thursday it has acquired for-profit Kaplan University to extend its reach into online and adult education, an unusual move for a public institution. .... Instead of folding the for-profit school into its operations in Indiana, Purdue plans to form a new, public university comprising of all 15 campuses and learning centers of Kaplan University, as well as 32,000 students and 3,000 employees. The state university will pay $1 upfront and enter into an agreement with an affiliate of Graham Holdings Company, the parent of Kaplan Inc. and Kaplan University, that could yield the company 12.5 percent of the new university’s revenue.
The deal calls for Kaplan to provide operational support, including marketing, human resources and financial aid administration, to the new institution for an initial term of 30 years with a buyout option after six years. Kaplan is not entitled to any expense reimbursement, until the new university has covered all of its operating costs and set aside $10 million in each of the first five years. Once those conditions are met, Graham Holdings will be reimbursed for its costs and receive a percentage of the school’s revenue, according to a company filing.
“This is a deal fraught with dangers,” said Century Foundation senior fellow Robert Shireman, a former undersecretary of education. “The bulk of the operations is still run by Kaplan. … There is nothing in this deal about the pricing of these programs and there’s barely guidelines around Kaplan’s costs.”
....
Kaplan University has drawn its share of scrutiny from authorities. Attorneys general in Illinois, Delaware and North Carolina have launched separate investigations into the university in recent years, which Kaplan officials say were only inquiries. Massachusetts reached a settlement with the school in 2015 over allegations that it misled students about job placement rates for its vocational programs. That same year, Kaplan also paid $1.3 million to resolve a federal whistle-blower’s allegation that the company employed unqualified instructors at its campuses in Texas.
....
Danielle Douglas-Gabriel covers the economics of education, writing about the financial lives of students from when they take out student debt through their experiences in the job market. Before that, she wrote about the banking industry. Follow @DaniDougPost