The title feels a bit disingenuous, because I’m going to write about the other two entities that will have to sign off on the Purdue-Kaplan deal, the Indiana Commission for Higher Education (ICHE) and the U.S. Department of Education (DOE), and neither of these is likely to be part of stopping this deal from going forward. Here’s why:
Three parts of ICHE’s extensive charge to oversee higher education in Indiana give them a say in the decision:
- Define the educational missions of public colleges and universities;
- Plan and to coordinate Indiana’s state-supported system of post-high school education, taking into account the plans and interests of independent colleges and universities;
- Approve or disapprove for public institutions the establishment of any new branches, campuses, extension centers, colleges or schools;
This deal is definitely their bailiwick, but remember how I mentioned that it was Mitch Daniels’s appointees on the Purdue Board of Trustees who appointed him, despite lack of academic experience, to be president of Purdue? Well, guess who appoints the members of ICHE. The governor. And the governor of Indiana has been Republican since January 10, 2005, when Daniels was inaugurated. Of the twelve members of the commission (there are currently two vacant seats), only two were appointed by Democratic governors. I seriously doubt that Daniels moved forward with this deal without a fair amount of certainty that the ICHE commissioners have his back.
And Daniels also has a few friends in high places, such that he might have an even stronger belief than I do (and my belief is very, very strong) that Trump’s DOE under Betsy DeVos will not stand in the way of the deal in the way that Obama’s DOE did for previous deals. DeVos is all about giving public money to for-profit companies in the name of school choice (and also to further “God’s Kingdom”). Essentially, the Purdue-Kaplan “New University” will meet the definition of a charter school—public money used to pay for a privately run school (I have not heard anything defining New University’s “publicness” in a way that jibes with my understanding of the concept, and the profits being funneled to Kaplan for 30 years makes me reject the idea that this will be a “public” university, because it will benefit a for-profit company)—and DeVos will likely be eager to extend the charter school model to higher education.
For those who argue that this won’t really be like a charter school, the claim that “tuition and fundraising” will pay all the costs of New University is deceptive, because it implies that taxpayer dollars won’t be supporting the school. This is entirely false. Indeed, the whole reason that so many for-profit universities want to convert to non-profit schools is not because they have decided they don’t want money anymore. It’s because they no longer want to be bound by the regulations that, among other things, restrict for-profit universities to receiving no more than 90% of their revenue from federal grant, loan, and work-study programs. Non-profit universities are not regulated so closely, largely because they do not have the same incentive to screw people over for their money.
If we look specifically at the percentage of revenue that Kaplan receives from federal sources, they were within the 90/10 rule for the most recent year for which data are available (81% of revenues from federal sources). Importantly, though, the numbers help to give a sense of the scale of this deal (and why Mitch Daniels wants it, and why Kaplan might think that 12.5% of profits will be plenty of money to skim off the top. In the 2014-2015 academic year, Kaplan University received $585,678,387 from Title IV (i.e., federal taxpayer-funded) sources, out of a total revenue stream of $720,264,155. In the same year, Purdue University’s overall revenue was $1,471,803,000 (see p. 14 here). There’s money to be made here.
So basically, if the Higher Learning Commission (HLC) doesn’t stop this deal, I don’t think we can hope that ICHE or the DOE will. Probably the best hope now, when outrage and concern are high, and long before the HLC’s deadline of April 2018, is to focus on calling this deal what it is—a use of public money to support a for-profit business, a move that will lead to decreased standards for higher education in Indiana and lower educational attainment for our students. Maybe the bad PR and noisy public shaming of Mitch Daniels can drown out the sweet siren song of All. That. Money.
Rachel E. Hile