Greg Toppo

USATODAY

Purdue University said Thursday 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 surprise announcement was made public in a Securities and Exchange Commission filing after Purdue’s board of trustees approved the deal.

According to the filing, about 32,000 current Kaplan students will transfer to the new, as-yet-unnamed university.

Kaplan will continue to run the university, collecting 12.5% of the new school’s revenue for 30 years. The U.S. Department of Education must approve the deal with Purdue, a public land-grant university based in West Lafayette, Ind. The Obama administration rejected similar deals, but the Trump administration has signaled it would roll back regulations on the industry.

Purdue said the new school will operate mostly online but would utilize 15 locations nationwide, including one in Indianapolis.

Purdue’s president, former Indiana Gov. Mitch Daniels, said Thursday that the deal would allow the university to expand services to more working adult learners and veterans.

“We cannot honor our land-grant mission in the 21st century without reaching out to the 36 million working adults, 750,000 of them in our state, who started but did not complete a college degree, and to the 56 million Americans with no college credit at all," he said in a statement. “None of us knows how fast or in what direction online higher education will evolve, but we know its role will grow, and we intend that Purdue be positioned to be a leader as that happens."

Purdue said Kaplan University’s current president Betty Vandenbosch would become chancellor of the new university.

Kaplan is owned by the Graham Holdings Co., formerly known as the Washington Post Co., which sold its flagship newspaper in 2013 to Amazon founder Jeff Bezos.

Several companies that run university chains have turned to revenue-sharing agreements, BuzzFeed reported, but in a few cases the deals have created what critics call "covert" for-profit colleges with less government oversight. Such transactions can also remove so-called "gainful employment" regulations from the Department of Education that threaten to revoke federal funding from schools where students graduate with too much debt relative to their earnings.

A Chronicle of Higher Education analysis found five Kaplan programs in 2015 failed the department’s gainful employment rule.

Last year, BuzzFeed noted, an effort by for-profit Grand Canyon University to transform into a nonprofit was blocked by the school's accreditor, which said its former owner would maintain too much control.

Thursday's deal quickly generated criticism, including a tweet from the American Association of State Colleges and Universities’ Barmak Nassirian, who called it a "Faustian deal."

Nassirian also tweeted: "Nothing says land-grant mission like handing one of the crown jewels of American higher education to a bottom-feeding operation."

Bob Shireman, a senior fellow at The Century Foundation, a left-leaning Washington, D.C., think tank, noted Purdue will be required to hire Kaplan’s 3,000-person staff, comparing the transaction to that of a restaurant with a bad reputation simply erecting a sign reading “under new ownership.”

Shireman also invoked a recent hit horror film, tweeting: “This deal reminds me of Get Out, with Kaplan’s predatory brain transplanted into a Purdue body.”

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