OT: Purdue buys for-profit Kaplan University, 32k students

Submitted by iawolve on May 1st, 2017 at 11:01 PM

This is fascinating. Purdue buys a troubled, for-profit university to get access to the adult education market and to expand the student base. I guess the assumption is that you buy capability that already knows how to reach and deliver into this segment since Purdue would take too long to build the capability internally. Granted, it can be debated how effective Kaplan was in actually educating its students, I would hope Purdue would bring more rigor. I am intrigued with how this may affect Purdue's brand or if they are able to tier their offering without brand dilution.

If they are successful, does that spur other collegiate M&A? What would be the best college merger in terms of awesomeness? 

http://www.marketwatch.com/story/a-prestigious-public-university-wants-…

Comments

youn2948

May 1st, 2017 at 11:03 PM ^

I think direct job training technicals schools would be a decent branchoff for universities, as in directly placing and training for jobs that companies are asking for, let them set the curriculms jointly.

JetFuelForBreakfast

May 1st, 2017 at 11:13 PM ^

....every aspect of Purdue (except Engine) at least 32 places.. .maybe MSU should acquire Davenport to upgrade EVERYTHING (to go with their world-renowned Detroit College of Law...I mean MSU College of Law)...

bluebyyou

May 2nd, 2017 at 6:48 AM ^

I'm of the opinion that Purdue is thinking outside the box.  Unless someone can figure out a way to drop the cost of attendance to affordable levels for way more people than it is right now, at some point, even large universities will start feeling the pinch.  Online delivery of education is a very inexpensive way to teach a large number of people, at least in certain subject areas, and it offers some advantages and some disadvantages.  If you know something, speed up the lecture; if not play it over until you figure it out.

Blue in Paradise

May 1st, 2017 at 11:14 PM ^

What a bizarre transaction. No offense to Kaplan, but it is not exactly a Big Ten level institution- far from it.

Do the Kaplan students automatically get accepted into Purdue? If so, what does a Purdue degree mean? I would be pissed if I were a a Purdue alum.

enlightenedbum

May 1st, 2017 at 11:25 PM ^

Most of those for profit schools are really scams to bilk money from students.  They're especially good at targeting veterans for GI benefits.  Which is fucked up and evil.

Purdue acquiring one is really weird.  Hopefully they can reform that stuff and maybe provide some kind of public good.

Blueblood2991

May 1st, 2017 at 11:50 PM ^

Current Kaplan students won't get a Purdue degree. This acquisition was about Purdue getting the technology of a massive online infrastructure without having to develop it on their own.

They haven't laid out a transition plan yet though. I doubt that they wouldn't risk reputation and AAU membership. Then again, we've seen first-hand how inept leaders can get blinded by dollar signs.

Brodie

May 2nd, 2017 at 5:42 PM ^

Purdue isn't going to start giving them Purdue degrees. It is just going to eventually phase Kaplan out and rebrand all of their infrastructure as a Global Campus. Arizona State has been wildly successful with online programs, offering free tuition to Starbucks employees as a way to generate press and students... Purdue has an online Communications program that has been very successful. Now they are looking to expand.

I think Michigan should get on this train. The Dearborn and Flint campuses offer some online classes but online a select number of degrees. There is more that all three institutions can do.

Brodie

May 2nd, 2017 at 5:42 PM ^

Purdue isn't going to start giving them Purdue degrees. It is just going to eventually phase Kaplan out and rebrand all of their infrastructure as a Global Campus. Arizona State has been wildly successful with online programs, offering free tuition to Starbucks employees as a way to generate press and students... Purdue has an online Communications program that has been very successful. Now they are looking to expand.

I think Michigan should get on this train. The Dearborn and Flint campuses offer some online classes but online a select number of degrees. There is more that all three institutions can do.

UMProud

May 1st, 2017 at 11:26 PM ^

For profits are garbage but they have cutting edge delivery infrastructure. Purdue is buying the channel...expect Kaplan to receive some serious quality control when assimilation begins

Everyone Murders

May 2nd, 2017 at 7:37 AM ^

Most "for profit" "schools" prey on underqualified and unsophisticated people hoping to better their lives.  A large portion of the student body consists of people who are the first in their family to go to college.  They offer a degree with little brand recognition, and usually charge laughably high tuition.  The students either drop out in debt, with a minority graduating with a very expensive degree that is unlikely to significantly help their career.  And they exist to maximize shareholder value.

Schools like Michigan are absolutely expensive and well-endowed (heh heh), but also offer a world-class education with some of the best professors in academia.  The school does cutting edge research, and truly trains the leaders of the future.  Does Michigan's endowment grow over time?  Of course it does.  But its mission is not to put money into the pockets of shareholders.  Its mission is to serve its students and the State of Michigan.  And it does a great job of that (I owe a lot of whatever success I've had professionally to Michigan, and going there has made me a more fulfilled person outside of my career).

The difference between the missions and organizational models of "for profit" "schools" and major research universities is night and day.  Just because there are elements of large public schools that are imperfect, it does not make them the truly evil enterprises that are most "for profit" "schools".

(FTR, as much as I loathe "for profit" "schools", I love community colleges.  The bang for the buck community colleges provide is fantastic, and they do a tremendous amount of good for their communities.  The best advice you can give someone thinking about pissing away their hard-earned dollars at Gotyourbucks University - the one with the glossy ads - is go to your community college, take real classes there, and bank the money you saved knowing you are getting a superior education at 20% of the cost.)

Rasmus

May 2nd, 2017 at 10:34 AM ^

Many of these for-profit "universities" are not properly accredited and the credits these students pay good money for and spend time earning are worthless. They don't transfer and are meaningless for admission to anything beyond, or even lateral, like transferring to a community college.

UMProud

May 2nd, 2017 at 11:14 AM ^

Not true...they are pretty much all accredited with the Higher Learning people which is the minimal standard. What you won't find is AACSB or other accreditations they require certain amounts of staffing research et so. However a number of Fortune 500 companies disallow education reimbursement for many of these for profit orgs.

Ezeh-E

May 2nd, 2017 at 8:07 AM ^

Most for-profit universities set tuition at the exact amount that the poorest qualify for for student financial aid. These students then have their entire financial aid (now debt) go to tuition, leaving no money for room, board, books, and daily expenses. They pick up a job on the side, but that still isn't enough to cover these expenses, so they then often drop out, now with massive debt because they took out the max.

As EveryoneMurders above said, the large majority of for-profit universities intentionally market to and prey upon very low-income.

bacon

May 2nd, 2017 at 9:27 AM ^

Non-profit schools are for profit? That doesn't even make sense. There are some schools legitimately blurring the line like Harvard and Yale, but that has to do with the profits from their endowments and the requirement that they spend a certain percentage on the students per year. 35 billion for Harvard and 25 billion at Yale. They have amazing people running them and investments that make millions a year. This is why they started offering free tuition to a large part of their students based on household incomes below 100k/year. They need to spend a certain percent a year on students and they don't have that many students. Michigan has a 10 billion dollar endowment, but for 45,000 students. So they can spend a little per student and not get in trouble.

Muttley

May 2nd, 2017 at 10:50 PM ^

delivery of education in favor of charging as much as they can.

Sure, the "non-profit" scheme causes the money to go to odd places, like Taj Mahal workout centers and $20 million rowing facilities.

Attending college was a slam-dunk decision in my day up-and-down Tiers 1-4.

Current students need to assess themselves and choose carefully.  In my day, a poor decision was a missed opportunity.  Today it can be a ball-and-chain of debt.

JetFuelForBreakfast

May 1st, 2017 at 11:30 PM ^

The proliferation of all these "universities" is a function of ONE thing... ULTRA low cost student loans...it's why my daughter's cosmetology school 20-month education was $18,500, when going to a HS program is FREE (if you realize earlier in life that's what you want to do)....Stephen Ross has given these folks $210MM (just to the B-School) and their only rational response is to jack OOS rates from $12K to $45K over the last 25 years...that's a wee more than inflation...and non-subsidized Notre Dame...didn't think I'd see a B1G school sink to this...