In a digital-age fulfillment of its mission as a land-grant college, Purdue University has acquired the for-profit, mainly online Kaplan University. Purdue’s board of trustees voted Thursday on a deal that would make Kaplan a public university, affiliated with Purdue and dedicated to extending educational options to non-traditional adult students.
“Certainly this is a first,” Purdue president Mitch Daniels, former Republican governor of Indiana and director of the White House Office of Management and Budget under George W. Bush, told THE WEEKLY STANDARD Thursday. It’s an unusual move for a public university, but not out of character for Purdue—through their “back a boiler” income share agreement, for instance, students receive funding in exchange for a cut of what they earn for a certain number of years after graduation. Looking toward the uncertain future of online education, “We had to do something different,” he said.
The Indiana university, comprising six campuses, prides itself on its history as one of the first universities founded under the Land Grant Act of 1862, which established agricultural and mechanical colleges where educational options were scarce. In 2017, “We could not fulfill our land-grant obligation while ignoring tens of millions of people whose lives are not going to match up to the residential model, or even the regional model that we have,” Daniels said.
In the post-war years, Purdue added regional campuses to serve a population of returning servicemen attending college on the GI Bill whose work and family obligations meant they couldn’t move to the main campus in West Lafayette and take up dorm life. And today, “We need a third offering, a third level of Purdue University for this third century we’re living in,” Daniels said. “Sooner or later, higher ed as we know it will be disrupted, as we love to say these days,” and, he added, “it’ll deserve it.”
It’s an opportunity to expand, to make Purdue more competitive, but also fulfills an obligation to serve a population previously beyond Purdue’s geographically grounded reach, beyond which, Daniels said, there is an “ocean of tens of millions of people, in an economy where something postsecondary is darn near essential, who don’t have any such educational credential.”
Particulars—like the name of the new public university, known for the time being as simply “New University”—are still being worked out, but the deal is settled: Kaplan University’s 3,000 employees, 32,000 students, and 15 campuses will join the new non-profit. Kaplan Inc., which will remain with parent company Graham Holdings, will continue to provide nonacademic tech services under a 30-year term agreement, with a buyout option after six. The deal came together in five and a half months—an impressive pace, Daniels said, even by private-sector standards. And the timing of the transition seems politically shrewd. Kaplan emerged from the Obama administration’s effort to punish for-profit colleges with its reputation less damaged than some of its competitors, but it’s possible that the previous Education Department might have declined to authorize the transition to non-profit status.
But Purdue’s interest in acquiring an online education infrastructure, rather than venture the risk of building one from scratch, and Kaplan’s desire to exit the shrinking for-profit college sector both preceded the presidential election. While appearances will, as ever, speak for themselves, political headwinds might not have figured in the deal at all, in other words. Arne Duncan, Obama’s first education secretary, endorsed the deal in a glowing statement: “I’ve always had great respect for Gov. Daniels, and I’m excited by this opportunity for a world-class university to expand its reach and help educate adult learners by acquiring a strong for-profit college. This is a first, and if successful, could help create a new model for what it means to be a land-grant institution.”
Higher education’s famous risk-aversion all but ensures universities’ unreadiness for whatever form the ed-tech revolution will take decades down the line. “How do we make sure there’s enough value that tomorrow’s 18-year-olds still want to go [to college] when they will have better and better and better online options?” Daniels asked—and answered.
