opinion

Bangert: Lingering questions on Purdue-Kaplan deal, regulators' records reveal

WEST LAFAYETTE, Ind. – The fate of a pending deal that would make Purdue University the new owner of online, for-profit Kaplan University, might have been sealed by higher education regulators meeting behind closed doors Thursday.

But in the weeks leading up to the final step in the Purdue Global deal – dubbed innovative, controversial or both, depending on who’s being asked – the Higher Learning Commission gave Purdue President Mitch Daniels indication that it was generally in favor of a newly branded and non-profit version of Kaplan University, according to documents obtained by the Journal & Courier through a records request.

Still, a team of Higher Learning Commission staff and peer reviewers who came to Purdue in October to do interviews and help determine whether Purdue Global should be accredited came away with a number of concerns and questions about how Purdue and Kaplan would make the online university marriage work.

That’s according to a 61-page report sent to Daniels from Robert Rucker, research and advocacy coordinator for legal and governmental affairs for the Higher Learning Commission.

That report went to 19 Higher Learning Commission trustees, who oversee the accreditation of about 1,000 colleges and universities in 19 states. They are expected to reveal their decision within two weeks, according to Steve Kauffman, a spokesman for the Chicago-based commission. Following earlier approvals from the U.S. Department of Education and the Indiana Commission for Higher Education, the Higher Learning Commission’s decision is the final regulatory step for the Purdue-Kaplan arrangement.

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In particular, the Higher Learning Commission report says the peer review team wanted to know how Purdue planned to differentiate between what it would mean to be a Purdue student versus being a Purdue Global student, making it clear to more than 40,000 online students that the classes they were taking were not the same as the ones offered on the West Lafayette, Purdue-Fort Wayne or Purdue-Northwest campuses.

The team also seemed confused about how things would work with two sets of trustees working under the Purdue name – right down to wondering what would happen if the Purdue Global board of trustees decided to fire Daniels over the objections of the regular Purdue board of trustees.

On Feb. 12, Daniels sent a 14-page response, thanking the Higher Learning Commission staff for recognizing the potential for a move that will put Purdue in a position to pick up some 32,000 students, more than 2,400 faculty and 15 campuses now run by Kaplan University.

Daniels and Purdue trustees contend that the deal – revealed publicly in April 2017 and the subject of vetting and debate ever since – will give Purdue a chance to extend its land grant mission to a new tier of nontraditional, often older students who haven’t had the opportunity to make it to Purdue’s flagship in West Lafayette or to one of its regional campuses.

Daniels also noted the review team’s acknowledgement that Kaplan University passed accreditation muster as recently as 2016.

But the Feb. 12 letter shows Daniels putting up a defense against questions that could possibly undermine the purchase of Kaplan University from Kaplan Higher Education for a dollar.

Here are several highlights among the Higher Learning Commission staff’s concerns about Purdue Global, also known by its placeholder name, NewU.

THE PURDUE NAME AND BRAND: The review team noted excitement among Kaplan students and representatives about adding the Purdue name to the program “was overtly high.” It also faced up to questions from faculty and students on the West Lafayette campus about “how the acquisition would affect Purdue’s brand and reputation, negatively or positively.”

“NewU must be clear and consistent in its messaging, especially as it pertains to the status (Kaplan University) students will have as Purdue students,” the report said. “Purdue must create a clear, articulate communication and marketing plan stating a consistent message as to the relationship and the autonomy of each campus and its respective ethos.”

That included, the report said, being clear about what, if any, credits will transfer from Kaplan University toward a traditional Purdue degree.

Daniels responded that Purdue saw Purdue Global as its own “destination school” with classes aimed at adult learners and “not part of the ‘shared course catalog’” of Purdue’s other campuses.

“As a practical matter, the prospect of a NewU student seeking to transfer to Purdue or one of its regional campuses is not a likely occurrence give than most of the NewU adult learners are place-bound,” Daniels wrote.

Daniels said Purdue Global would advise students that it “cannot guarantee the transferability of any credits to other institutions, including the other Purdue institutions.”

PURDUE GLOBAL OPERATIONS: Several times, the review team asks whether leaving so much Purdue Global oversight to Kaplan Higher Education, which is expected to help run the online offering, is a good idea. Daniels wrote that Kaplan’s expertise and familiarity with the operation was welcomed by Purdue. He also said Purdue and Purdue Global boards of trustees would maintain ultimate oversight.

TWO SCHOOLS, TWO SETS OF TRUSTEES: The review team couldn’t seem to get its head around how Purdue Global – essentially a non-profit business trying to fit into the structure of a public university – would work. In particular, the team raised questions about the fact that there would be two boards of trustees and which one would carry the most weight.

Purdue’s regional campuses answer to Daniels and to the Purdue Board of Trustees. So why did Purdue Global need its own set of trustees on a board made up of five Purdue trustees and one from Kaplan?

The review team’s questions: Do both the NewU and Purdue boards evaluate the Purdue president? Do both boards hire and fire the president? Could the NewU board go its own way if it disagrees with the Purdue board?

“Neither NewU nor Purdue representatives provided a clear rationale for the difference,” the report said.

The answers, provided by Daniels: Both sets of trustees would continue to evaluate Daniels in his roles as president of Purdue and ex officio president of Purdue Global. The Purdue Global deal would change nothing about the Purdue trustees’ ultimate authority to hire and fire the president. And if the Purdue Global board strayed, the Purdue board of trustees would have the power to appoint new members.

Daniels said Purdue disagreed “that the NewU governance structure may be problematic.”

THE HISTORY OF THE TRANSACTION AND KAPLAN’S REASONS: The review team revealed that Purdue and Kaplan went to the Higher Learning Commission in the winter of 2017 to discuss the possible transaction, while the two were still in private talks. Purdue’s desire to reach a new type of student and to expand its online presence is noted. So are some blunt trends in the for-profit university market that motivated Kaplan.

“(Kaplan) representatives have indicated a vision of moving out of the sector of for-profit institutions that has been marked in recent years by a number of factors, which they describe as ‘headwinds,’ that have led to the demise of a small number of providers in this sector,” the review team wrote.

The team noted that those headwinds also led to enrollment drops and “concern from students, parents and public policymakers about certain alleged practices in this sector.” In footnotes, the report mentioned that, since 2007, Kaplan Higher Education and Kaplan University “have been the subject of at least nine class-action lawsuits,” before outlining a number of cases and settlements in that time.

Daniels pushed back, calling the information “misleading” and listing the point under “errors of fact” in his response.

“Please note that none of the lawsuits cited in the footnote involved any allegation related to (Kaplan University’s) educational quality or Kaplan’s delivery of that education,” Daniels wrote. “The majority of the cases cited … involved employee actions that have nothing to do with (Kaplan University).”

Daniels said Purdue’s review “found, at every turn, that they perform consistent with the highest standards of ethics and integrity and with a clear focus on students’ best interests.”

FOR MORE: To read the Higher Learning Commission’s peer review report, along with Purdue President Mitch Daniels’ reply, go to jconline.com and click on the link to this story.

Reach J&C columnist Dave Bangert at 765-420-5258 or at dbangert@gannett.com. Follow on Twitter: @davebangert.

READ THE LETTERS

Purdue-Kaplan: Higher Learning Commission review team letter to Purdue, Jan. 29, 2018

Purdue-Kaplan: Purdue President Mitch Daniels' response to the Higher Learning Commission, Feb. 12, 2018