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A monstrous muddle of no-profit and for-profit HE

Purdue University, an institution among America’s most respected research universities, has announced it is buying the for-profit Kaplan University. This is perhaps one of the most bizarre initiatives in higher education in recent years, yet, as evidenced in the abundant commentary that has resulted, this project highlights so many of the challenges confronting higher education today – access, incorporation of online learning, revenue, etc.

It is hard to imagine a marriage between two more different institutions. This move by President Mitch Daniels has already generated passionate debate on campus and off.

Joshua Kim, director of digital learning initiatives at the Dartmouth Center for the Advancement of Learning, has suggested adopting a 'wait and see' approach. Yet others such as Robert Shireman, former US deputy under-secretary of education, highlight just how confusing this partnership and the distribution of responsibilities are.

The resolution just passed by the Purdue faculty, which calls the deal a violation of common-sense educational practice and respect for academics, draws attention to additional problems and ambiguities.

Redefining a national treasure

We believe that this is an immense mistake – the two institutions do not complement one another in any useful way. Importantly, a respected research university will inevitably be changed by absorbing and managing a for-profit with different goals, different structures, different practices, different cultures, different values.

This move implies a significant redefinition of Purdue’s mission and suggests an attempt to short-circuit a more thoughtful, long-term strategy to increase the participation of adult students and offer different mechanisms for access to a university degree. The big unknown is whether Purdue’s brand can improve the ugly reputation that Kaplan has earned over the years for dubious marketing processes or if Kaplan’s fame will be a drag on Purdue’s status.

Purdue ranks among America’s roughly 200 top research universities that collectively represent a national treasure. These institutions are central to the production of important research and the education of the next generation of scientists, researchers and academics.

American public research universities have multiple roles, including educating undergraduates and serving the needs of their state’s economy, but the core mission of flagships like Purdue should be providing education and research at the highest level.

These institutions tend to be reasonably selective in admissions, both at the undergraduate and advanced degree levels. Expanding the mission to provide open access and mass enrolments by way of online courses needs to be done strategically, not instantaneously, to ensure that the shift aligns with institutional profile, culture and tradition. What President Daniels has done here is to lurch in a new direction.

A career in cost cutting

What the commentary published to date overlooks is the importance of President Daniels' biography. Mitch Daniels is first and foremost a politician. He was educated as a lawyer, not an academic. Before becoming governor of Indiana, he worked in the Ronald Reagan administration and subsequently as budget director for former US president George W Bush. This in itself should speak volumes.

He was president and CEO of the Hudson Institute, a conservative policy research and analysis firm. Daniels went on to become a senior vice-president at Eli Lilly, a large pharmaceutical company. He has a reputation for cost cutting and for decreasing the role and size of government. One of his notable achievements as governor was to privatise the Indiana Toll Road.

In this context, the acquisition of Kaplan should be less surprising. This is a man whose career has been dedicated to decreasing public expenditure. The revenue anticipated by the incorporation of Kaplan’s 32,000 online students and their business apparatus undoubtedly outweighs any concern he might have (or not) for the academic mission and stature of Purdue.

A non-profit,for-profit

If the details of this initiative have proven confusing to the university community in the US, one can only imagine how much more confusing it is from an international perspective. It is difficult enough to explain that 'college' and 'university' have the same academic standing to prospective students and academics outside the US.

Explaining the differences between for-profit and non-profit, different kinds of accreditation, different cost and fee structures already overwhelm individuals trying to make sense of American higher education.

Purdue University has created a new non-profit, for-profit institution, that is and isn’t the same university and that does and doesn’t have the same professors, etc. The result is a monster of ambiguity.

Purdue currently enjoys international respect as a top American university with particular strength in engineering and a range of scientific disciplines. There will be inevitable confusion concerning whether Purdue is a research university, a for-profit, or a not-for-profit providing open door, online courses for large numbers of students, in the United States and overseas.

Mixing non-profit institutions with for-profit entities is truly problematic. American universities increasingly collaborate with for-profit agencies that operate various profit-making activities, including in some cases international branch campuses, pathways programmes to channel international students to US campuses and various distance education and MOOC – massive open online course – activities.

While there is nothing inherently wrong with these for-profit arrangements or the activities they engage in, the relationship with these external entities requires extreme transparency, something not yet evident in the Purdue-Kaplan integration.

Reputation risk

The Purdue-Kaplan venture muddles the academic mission of Purdue University by combining activities with the for-profit Kaplan University. Purdue risks being tainted by the financial and ethical problems that have tainted Kaplan enterprises.

The Purdue-Kaplan marriage reflects the unfortunate direction of American higher education.

It blurs the distinctions between non-profit and for-profit. It confuses the mission of academic institutions – in this case the research mission of Purdue University. It muddies the brand of a distinguished university, perhaps especially internationally. The reportedly complex contractual details are by no means risk-free.

President Daniels suggests that by adding a for-profit dimension to his public institution that he is improving access to an underserved population. This is like suggesting that privatising healthcare will guarantee access to all.

President Daniels has acted too much like a politician and not nearly enough as a university leader. Like too many politicians today, he is proposing that a complex problem has an easy and quick solution and that (of course) the solution lies within the private sector. The bottom line is that American research universities should stick to their traditional mission – education, research and public service.

Philip G Altbach is research professor and the founding director of the Center for International Higher Education at Boston College, US. Liz Reisberg is an independent consultant in higher education, formerly associated with the Center for International Higher Education.
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