Purdue University acquired a for-profit college for $1 — and faculty members are up in arms over the deal

Indiana Gov. Mitch Daniels speaks to a student after being named as the next president of Purdue University.AP Photo/Michael Conroy

Purdue University acquired for-profit Kaplan University for $1 last week, setting off a wave of debate over the deal.

The agreement allows Purdue to increase its reach into online and adult learning, while potentially paying Kaplan’s parent company — an affiliate of Graham Holdings Company — 12.5% percent of the new university’s revenue.

While some have hailed the move as “bold” and necessary for public universities being squeezed by diminishing state funding, others, like Robert Shireman of the nonpartisan think tank Century Foundation called it “a dangerous, long-term marriage between a public university and a firm answerable to Wall Street investors.”

Faculty members at Purdue, who were not asked to weigh in on the decision, called a special session of the University Senate Thursday afternoon to question Purdue President Mitch Daniels and other university officials about the deal, The Lafayette Journal & Courier reported.

At the end of the session, the Senate passed a resolution that reproached the university for leaving them out of discussions and called for them to be included in future decisions regarding the new university, according to the Journal & Courier. The resolution also asked that administrators rescind any decisions already made about the new university, as faculty hadn’t previously been consulted.

Faculty members believe that if the university does not engage them in decision-making going forward, the deal may stall before Purdue’s accreditor gives final sign-off.

Purdue University.Wikimedia Commons

“It’s not final until it’s got all the approvals it needs to receive,” David Sanders, an associate professor at Purdue, told Inside Higher Ed after the special session. “There could be components to the agreement that could be changed.”

Kaplan’s approximately 32,000 students will likely increase Purdue’s revenue without extensive additional investment from the university. Using Kaplan’s resources, Purdue will be able to reach students worldwide with classes provided online, without needing to invest in additional classrooms or housing for more students.

Purdue President Mitch Daniels, former Republican governor of Indiana, has lauded the deal as something “financially positive” for Purdue while also removing a for-profit operator from the market. For-profit colleges have been widely criticized for providing a poor education for students while leaving them with extremely high debt.

Others offer a more dismal estimation of the deal.

“This is nothing but a re-skinning of the garbage that Kaplan was doling out under its own brand under new management,” Barmak Nassirian, director of federal relations and policy analysis at the American Association of State Colleges and Universities, told Inside Higher Ed. “I have no reason to believe that you could somehow take those components and make something stunningly different with them than Kaplan was making.”