Purdue University Acquires For-Profit Kaplan University

The acquisition supports plans to establish a new public university for adult learners.

Purdue University Acquires For-Profit Kaplan University

THE EVOLUTION OF online education just took a different turn with Purdue University’s April 27 announcement that it would acquire for-profit Kaplan University in a bid to expand the public’s access to higher education. The announcement noted that, with this purchase, the university wants to create what it calls the “world’s next new public university” to better serve nontraditional students, including working adults and those who never have taken college courses.

According to an online FAQ page, this transaction “will not require an upfront purchase price.” Instead, Purdue has entered into a revenue- sharing agreement with Kaplan via its parent company, Graham Holdings, with a buyout option in six years. Kaplan must guarantee that the new university will “meet its mission to serve adult learners” as it converts from a for-profit to a public higher education institution that operates within the Purdue system.

The acquisition of Kaplan is a strategic move to strengthen Purdue’s position in the online higher education market, said Mitch Daniels, Purdue University’s president, in the press release. “A careful analysis made it clear that we are very ill-equipped to build the necessary capabilities ourselves, and that the smart course would be to acquire [Kaplan] if we could.”

The new university will deliver its curriculum primarily online. It will be based on Kaplan University’s existing operations, including its 15 campuses and learning centers and seven schools and colleges, through which it will continue to deliver Kaplan’s more than 100 diploma, certificate, undergraduate, and graduate degree programs. Kaplan’s 32,000 students and 3,000 employees will transition to the new university, whose name and brand will connect to Purdue’s in a way yet to be determined.

However, while the two brands will be linked, the new school will maintain its own identity and operate separately from the two arms of Purdue’s system, which include its central campus in West Lafayette, Indiana, and its regional campuses. In effect, it will become a third arm of the university’s system, fully supported by its own tuition and fundraising efforts. It will not accept state appropriations. While it will maintain an open admissions policy, it will provide discounted tuition to Indiana residents. A subsidiary of Kaplan Inc. will provide nonacademic services.

What this means for the two schools—or for the for-profit higher education market—has yet to be seen, but the announcement has gotten the industry’s attention. The new institution will be finalized within the next five months and begin operations upon approval from the U.S. Department of Education and the Higher Learning Commission. Its chancellor will be Betty Vandenbosch, Kaplan’s current president.

Find additional information at www.PurdueNewU.org.