Critics of Purdue deal to buy for-profit Kaplan make one last stand

The final debate over Purdue University’s bid to purchase online for-profit education giant Kaplan University comes Thursday at a meeting of the Higher Learning Commission.

The deal, which would move Kaplan’s online education offerings under the Purdue umbrella and transition the for-profit to a not-for-profit, has already received two of the three approvals it needs.

In August, the state’s Commission for Higher Education signed off on the plan. A month later, the U.S. Department of Education gave Purdue the green light.

Should it receive final approval, Purdue University Global can officially launch.

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Only the Higher Learning Commission stands in the way, which means outspoken critics are making last-ditch appeals to kill the deal at the panel's meeting in Chicago.

"They’re the last gatekeeper for funneling students into this new program," said Yan Cao, a fellow with progressive think tank The Century Foundation. "We have some serious concerns with that deal going forward."

The Century Foundation sent an excoriating letter to the HLC – the accrediting body for both Purdue and Kaplan – accusing Purdue University President Mitch Daniels and other university officials of purposefully misleading the public, faculty and other stakeholders in an attempt to improve the deal’s chances.

"Purdue officials have not been ethical and responsible in providing information to key constituencies about this joint venture," the letter reads. "Rather, Purdue officials have made numerous false and misleading statements or omissions in communications with key constituencies."

Purdue has strongly pushed back against these allegations.

“In describing Kaplan University, Purdue’s leadership has consistently followed standard practices, such as relying on official government data,” said Brian Zink, spokesperson for Purdue, “but certain critics have consistently recycled old charges and allegations in the hopes of stopping this acquisition to serve their own political and ideological ends.”

Bob Shireman, formerly a deputy undersecretary for education in the Obama administration, has been a vocal critic of the for-profit education sector for years. Shireman is now a senior fellow at The Century Foundation, where he continues to raise those concerns.

The for-profit sector has a reputation for predatory practices, high default rates and low-value products. This is not true in every instance, but bad behavior has run rampant throughout the industry and the Obama administration issued rules to increase scrutiny of the sector. Under new leadership of Secretary Betsy DeVos, the U.S. Department of Education has rolled back some protections for for-profit students.

Kaplan was part of the problem.

A 2012 Senate committee report found Kaplan engaged in "deceptive recruiting practices, heavy-handed efforts to prevent access to transcripts and students with high debt accompanied by an inability to find a job."

It also noted, though, that Kaplan was an outlier in the industry by making reforms to address some, if not all, of these concerns.

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Zink said those reforms were "essential to Purdue’s decision to acquire Kaplan University."

"It should also be noted that all of these charges have been examined and rejected by the Higher Learning Commission in accrediting Kaplan University with flying colors, as well as Indiana Commission for Higher Education and the U.S. Department of Education," Zink said. "In short, Kaplan University has unusually strong student outcomes, arguably the best student protections in the industry, and a culture that fixes problems where they exist.

"Under Purdue’s leadership and control, we are confident Purdue Global will serve students extremely well."

The Purdue University Senate has also opposed the deal since it was announced last April. The Journal and Courier reported this week that a contingent of faculty members will travel to Chicago for the HLC hearing Thursday.

The university has been quick to point to supporters of the Kaplan deal, including Arne Duncan, former secretary of education under Barack Obama; Arthur Levine of the Woodrow Wilson National Fellowship Foundation; and Todd Rogers of the Harvard Kennedy School.

Daniels has been working to make a Purdue education more accessible since stepping onto the West Lafayette campus. Purdue’s been on a tuition freeze since 2013, became the first major U.S. research university to offer income-sharing agreements and struck a deal with Amazon to lower textbook costs for its students.

The bid to acquire Kaplan, though, is taking innovation to a new level and was seen as a tectonic shift in the higher education landscape when it was announced unexpectedly in April.

In the deal between Purdue’s trustees and Graham Holdings, Kaplan University’s parent company, Purdue will pay just $1 for Kaplan in exchange for a lengthy contract for services. Purdue Global will continue to offer Kaplan’s courses in its certificate and degree programs at current prices and take on Kaplan’s 32,000 students, 2,462 faculty members and 15 campuses.

Daniels has framed the move as continuing Purdue’s land-grant mission, 21st-century style. The initial mission of the university was to bring higher education to the middle class, he said. Last century, Purdue expanded into regional campuses to reach another group of students — those who couldn’t pick up and move to West Lafayette for four years.

Now, Daniels said, the new university will allow Purdue to reach a third group of students, who tend to be older adults who can’t fit the traditional higher education model into their lifestyles.

Call IndyStar education reporter Arika Herron at (317) 444-6077. Follow her on Twitter: @ArikaHerron.