Purdue University in Indiana announced plans Thursday to start a new online school by acquiring for-profit Kaplan University, one of the top destinations for military students and veterans.
The unlikely relationship between a public land-grant university and a for-profit school stems from "mutual interests and goals" and a shared desire to expand access to education, according to the terms of the agreement between Purdue and Kaplan's parent company, Graham Holdings.
"None of us knows how fast or in what direction online higher education will evolve, but we know its role will grow, and we intend that Purdue be positioned to be a leader as that happens," Purdue President Mitch Daniels said in a statement. "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 them if we could. We were able to find exactly what we were looking for."
According to information provided by Purdue, the university's feasibility studies indicated it would take 36 months to create a single degree program and much longer to create an online school of the magnitude it is acquiring with Kaplan.
With Kaplan comes 32,000 students, 3,000 employees and 15 campuses and learning centers throughout the Midwest and East Coast that will fall under Purdue when the acquisition becomes official. The process could take several months, according to Kaplan Inc. spokesman Mark Harrad, as the U.S. Department of Education, state agencies and the institutions' accreditor agencies still need to sign off.
A Military Times analysis of fiscal year 2015 federal data show Kaplan Higher Education Corp. was the 11th most popular destination for active-duty service members using tuition assistance benefits and the 18th most popular school for Post-9/11 GI Bill users. That corporation consisted of Kaplan University, which Purdue acquired, as well as several smaller schools that are no longer part of the company and weren't part of the deal. But Kaplan University accounted for a large majority of the corporation's TA and GI Bill students. Among Kaplan programs that are going to Purdue, the university enrolled about 5,800 TA students at a cost of $12.5 million and just over 5,600 Post-9/11 GI Bill students, whose total cost of tuition and fees were $31.2 million.
Purdue's acquisition would likely have been a top-25 destination nationwide for both TA and GI Bill users in fiscal 2015, data suggest.
Kaplan's military students make up 26 percent of their overall student population. An overwhelming majority are enrolled in online programs, and Harrad doesn't anticipate any disruption to their education, he said.
"The students in these schools -- including the military students and veterans and their spouses -- they will continue in the same programs, in the same courses earning the same degrees with the same instructors as they have now."
The only difference will be the school's name on the diploma, which hasn't yet been decided, he said.
Though Kaplan's institutional assets will become a part of the public university after the acquisition, its current for-profit parent will remain involved and continue providing long-term nonacademic transitional and administrative support services for the next 30 years, with a buy-out option after six, according to the agreement.
The schools included in the acquisition are Kaplan's schools of business and information technology, general education, health services, nursing, the College of Social and Behavioral Sciences, Concord Law School and Open College at Kaplan University.