Dive Brief:
- As Purdue University’s acquisition of the for-profit institution Kaplan faces several upcoming regulatory hurdles, experts on higher education believe the new partnership could potentially create big changes for institutions, potentially establishing a new way nonprofit universities can address for-profit competitors, according to Inside Higher Ed.
- Many believe the Trump administration’s openness to alternative higher education degree programs speaks well for the acquisition’s chances.
- Critics argue that the way the deal is set up will endanger Purdue’s status as a public university, as it will be constructed as a type of “limited liability corporation” that Purdue President Mitch Daniels argues will not bring any potential financial risk to the state.
Dive Insight:
Traditional higher ed has struggled to keep up with the pace of digital and distance learning, and for-profit institutions have filled in the gaps, infringing on the traditional schools' market share and increasing the level of competition for students. Purdue’s move to incorporate Kaplan’s students (though the ‘New University,’ as it is being called, will maintain some autonomy) and revenue into its own school marks one of the more direct attempts thus far that a not-for-profit institution has taken to subsume a for-profit competitor.
However, Kaplan University did see a pronounced drop in revenue during the early half of 2016, and for-profit colleges are generally suffering a decline in enrollment after heightened scrutiny in the Obama era. While public institutions like Purdue may view this as an opportunity, presuming that an institution like Kaplan may be more willing to engage in a partnership at a moment of vulnerability for the company, the assertion that the deal carries "virtually no financial risk" to the state raises questions about the nature of the deal — which sees Kaplan remaining on board to provide administrative services for the institution.
