Q1: What is the transaction and how will it work?
Kaplan University (KU) will be acquired by Purdue NewU Inc., an Indiana nonprofit public benefit
corporation controlled and supervised by Purdue University, to create a new global public university (yet
to be named but referred to as NewU). NewU will continue KU’s mission of providing outstanding career
oriented higher education to adult learners. This is a revolutionary initiative that will allow NewU to
grow as a public university under the control of a world-class institution while still utilizing Kaplan Higher
Education’s (KHE) resources and expertise. In addition to acquiring KU, Purdue New U and the NewU
Board of Trustees will completely control and operate NewU. NewU will enter into a long-term support
services agreement with the same Kaplan affiliate that has been providing “back-office” support
functions to KU for some time, Kaplan Higher Education (KHE). Acquiring KU will allow Purdue the
opportunity to extend its land-grant mission of providing high quality accessible education globally,
especially to underserved adult learners. Today, KU serves 32,000 students, most of whom are working
adults with some college seeking to further their careers. KU’s students are supported by caring and
experienced faculty, academic staff, and administration. This will not change. KU’s commitment to
student success has provided the unique ability to take this next step in expanding Purdue’s land-grant
Purdue is convinced that procuring services from KHE puts NewU in the best position to succeed and
serve the needs of students. The agreement will ensure a seamless transition for current KU students
and will enable Purdue and NewU to benefit from KHE’s deep expertise in online education offerings.
KHE will have no authority over NewU’s academic functions.
With the acquisition of Kaplan University the Purdue learning ecosystem will expand from three to four
components: 1) Purdue West Lafayette, 2) Purdue regional campuses, 3) units whose mission is to
support Purdue, and 4) Purdue NewU (see Figure 1). Relative to Purdue, NewU is a separately
incorporated postsecondary State Educational Institution (SEI) that will operate as a public benefit
corporation. While controlled by Purdue, NewU will have standalone HLC accreditation, with separate:
Figure 1. Purdue learning ecosystem
Additional questions for Q1:
1. Will NewU be treated as are the other Purdue "branches”? In other words, will it be a standalone
operation with its own programs, courses, faculty, policies, et al.? If it will not stand alone,
how will it be structurally integrated into Purdue-West Lafayette?
2. Will NewU faculty be considered Purdue faculty? Will they go through a Purdue tenure and
3. Will NewU degrees be identified as Purdue degrees or will they be something else?
4. If the number of non-TT or long-term contracted faculty members is more than 10%, how will
Purdue-Kaplan move to meet our 10% CL limit?
5. When will NewU be accredited by the North Central accrediting body?
6. Will Kaplan need to now go through ICHE to have its programs approved?
New questions related to Q1:
1. Will the NewU faculty be represented in the Senate?
2. Of the NewU current degree programs that are subject to specialized accreditation, which have
received such accreditation, and what are the plans to ensure that all of those programs that
should be accredited are actually accredited?
Q2: What will NewU consist of?
NewU will consist of the entirety of Kaplan University (excluding the professional training school known as KU-PACE). Initially that is the seven schools and colleges that now comprise Kaplan University which together offer more than 100 diplomas, certificates, associate, bachelor’s, master’s and doctoral degrees, as well as 15 campus and learning center locations. NewU will likely carry the Purdue name, while conveying its distinct identity and purpose. The current full-time and adjunct faculty and staff at KU — roughly 2,100 employees — will transfer to NewU. Curriculum, course material, tutorials, library content, student records, student advising, career services, and alumni clubs and organizations will all transition to NewU. Most significantly, all current KU students (approximately 32,000) at the time of the changeover will seamlessly transition to NewU upon completion of the transaction. They will receive their degrees from NewU, once the university is established.
Additional questions for Q2:
1. Kaplan/New U currently awards many Associates Degrees, which have been strongly discouraged to the point of elimination in the Purdue system. What will be the fate of these programs?
2. All of Kaplan’s Bachelor’s degrees require 180 credit hours. The bachelor’s degrees at IPFW and PWL are all 120 credit hours. Will Kaplan change their curriculum? Essentially their students will have to go to school longer to get the same degree they would get here.
3. Can we have a visit to share and discuss opportunities so we can better understand what they have and leverage resources?
5. Who are the faculty and how are they hired and evaluated? What are the qualifications of Kaplan faculty?
6. Will the physical locations remain open or will the Kaplan locations close and become online only?
7. Is there a home-base for Kaplan outside of Indiana? Will that change?
Q3: What is the purpose of the acquisition?
The purpose is to expand educational opportunities to more students, especially those with limited access. As Indiana’s only land-grant university, Purdue takes very seriously its commitment to expanding access to higher education. This acquisition enables Purdue to serve a much broader, non-traditional population of adult learners who are balancing work and family responsibilities with their desire to further their education and acquire important skills for the workplace. Serving this population will require a set of online program offerings and technical capabilities that the Purdue system currently lacks. Were Purdue to attempt to develop such capabilities on its own, it would take many years and significant financial resources. Instead, President Daniels and the Purdue Board of Trustees opted to acquire the institutional and physical assets of KU, which has world-class online capabilities, student support systems and a student-focused culture that is consistent with Purdue’s.
Additional questions for Q3:
1. What is your vision for Purdue University's new online venture with Kaplan University over the next five years? How specifically are the pillars of the land-grant mission (education, teaching, research, and economic development) that are endemic to a state public university going to be harmonized and incorporated into the relationship with the private Kaplan University?
2. How will the effectiveness of the Kaplan-Purdue educational enterprise be assessed?
3. Is NewU the same rigor and quality of education as West Lafayette, or would it be viewed differently?
4. Will faculties on the West Lafayette campus be involved in quality oversight of the Kaplan program, or how else will quality be ensured?
5. New faculty have been wondering if they’ll have to teach courses in this new university. If we want to teach at NewU, is that part of our faculty teaching load? Would we need a separate contract with them?
Q4: How will NewU be named?
There is a precedent for this in the Purdue system, which currently has three campuses — Purdue West Lafayette, IPFW (soon to be renamed as Purdue Fort Wayne), and Purdue Northwest. Each university has a distinct mission and serves different types of students. NewU will similarly carry the Purdue name, while creating and maintaining its own distinct identity.
Additional questions for Q4:
1. How will the name be chosen?
2. What kinds of reputational risk does this expose the Purdue brand? What is the plan to mitigate these risks? What will be the effect of NewU on Purdue’s brand?
Q5: Beyond the Transition and Operations Support Agreement, will Kaplan provide services to NewU?
At Purdue’s request, KHE may provide services such as international student recruiting, test preparation, professional education or other programs subject to separate agreement on terms.
Q6: Will NewU require state tax dollars?
While financial aid will be available to students, the university will be self-sufficient and will not require state appropriations. Purdue is a state instrumentality, but it generates and manages financial resources other than state appropriations. State legislation makes clear that only these other non-public resources (called “eligible property” in the statute) may be used if Purdue is ever called upon to provide a financial backstop. However, NewU is expected to be self-sufficient and not require this kind of support from Purdue in the ordinary course. As an aside, the terms of the acquisition are highly favorable to Purdue, shielding the university from virtually all financial risk.
Q7: What is the timeframe for finalizing this transfer of KU’s academic programs to a separate non-profit institution (NewU)?
Once all regulatory and accreditor approvals are received, the definitive agreement will become effective. It is expected to take about six to seven months for the transaction to close.
Additional questions for Q7:
1. How will the communication of the process take place? Is there a communication strategy?
Q8: What are the financial terms underlying this agreement?
The transaction will not require an upfront purchase price. Rather, as consideration for Kaplan University’s institutional assets, NewU will enter into a long-term transition and support agreement, with a buy-out option after year six. The agreement will also provide certain financial guarantees by KHE for NewU to ensure it is able to continue to meet its mission to serve adult learners.
Additional questions for Q8:
1. Kaplan is on the receiving end of significant litigation as part of its allegedly predatory behavior, will Purdue be taking on this litigation risk? Has an independent assessment of the legal and financial risks of producing a Purdue-Kaplan hybrid been conducted? If so, what were the results? If not, has the Purdue administration met its due diligence requirements? Is there a plan for ensuring the past predatory practices of Kaplan are not repeated?
2. Kaplan allegedly requires all students to sign an agreement which prohibits them from suing the institution (i.e., presumably the typical kind of agreement which requires that all disputes be submitted to arbitration). Is that correct, and, if so, have there been any arbitrated disputes?
Q9: Who will be on the board of NewU?
NewU’s board of trustees will include five members from the Purdue University Board of Trustees and a sixth member who can be an independent, or outside, trustee who must have “significant prior experience in higher education.” All NewU trustees are elected by Purdue, as the sole member of NewU. Current board members are:
Q10: What does the acquisition mean for KU students?
The transition for students should be seamless. They will continue to enjoy the same classes, faculty and support services that they currently rely on. All present services offered to KU students will continue to be offered by NewU. Upon graduation, they will receive a degree from NewU.
Additional questions for Q10:
1. Can a NewU student earn an associate’s degree at NewU and then matriculate into one of our Purdue West Lafayette programs?
Q11: Will there be program changes to NewU?
This is a change of control and not a change in the institution itself, and we do not have any plans to change the programmatic mix initially. Like any university, the programming mix will evolve over time as we evaluate which programs are best suited to meet the needs of our students and the communities we serve. We believe there are areas of expertise within Purdue that will be helpful as new programmatic areas are considered.
Additional questions for Q11:
1. What opportunities are there for required continuing education?
2. What opportunities are there to offer MOOCs to NewU students by offering course from NewU through MOOC platforms?
3. Online courses for professional development would be beneficial to Purdue staff (Tableau training, WebEx training, software).
4. What is the opportunity to use Kaplan resources to work with manufacturing employees or the workforce in general?
5. Could we use this to help meet company needs for professional development, training, and continuing education?
6. Could we use the New University to offer ongoing professional development opportunities for Purdue Alumni?
Q12: Although NewU will be an online university, will student applicants from the state of Indiana be given a preference in admissions or a discount in their tuition?
As an open-admissions university, there will be no need for a preferential admissions policy. NewU will determine its policy regarding in-state tuition discounts for students residing in Indiana.
1. Will current PU employees be allowed to take classes through Kaplan at the same reduced rate as is allowed at this time?
2. When will the faculty/staff free tuition take effect?
Q13: What is the relationship among online programs?
1. There are a number of distance based programs in various colleges that serve specific industries and topical areas. These programs by the nature of their funding streams provide a substantial amount of income directly to the various schools and colleges. What will happen to the current distance/hybrid/weekend programs now in existence out of the WL campus?
2. How does this affect current plans for digital education already in the Purdue pipeline?
3. How will decisions be made about duplicate or similar programs?
4. What role will Purdue WL’s Digital Education unit play in New U?
5. What are the implications of this arrangement for existing agreements with external vendors such as Wiley?
6. Kaplan has a lot of expertise in online learning that should be useful to us in launching and running online programs. How will Kaplan staff integrate with our staff, or become Purdue staff, and can we leverage their expertise to advance our online programs?
7. How is testing administered for Kaplan’s online courses?
8. Can we use the resources they have (ex. instructional designers)?
9. How are we handling intellectual property? Who owns the intellectual property of NewU course materials?
Q14: What is the relationship among courses?
1. Instruction and academic consistency across Purdue campuses/units: Part of what makes Purdue University a “system” is a shared course catalog. What steps will be taken to align Kaplan courses with those that are in our catalog, and what do the trustees envision will be the effect on Kaplan programs in which courses are not approved as part of our catalog? As a "new Purdue campus,” will online courses taken with Kaplan eventually be aligned with WL courses, with the same course names and numbers?
2. Will courses previously taken at Kaplan and courses to be taken in the future at NewU be transferrable to any Purdue campus?
3. Will current WL on-campus students, or students in our online programs, have the option of taking online courses from the “New U” instead of taking our own WL-based (face-to-face and online) courses, thus leading to threats of lower course enrollments, cancelled classes, cut faculty lines, etc.?
4. Will Kaplan be going through the Course Transfer Library process for some its courses?
5. Since the NewU’s main demographic consists of military members, will we start accepting military training credit?
6. What is Kaplan’s course evaluation process? How will they ensure quality? Should we centralize on course review efforts?
7. Is there a central teaching and learning center supporting the Kaplan system?
Q15: How will the acquisition affect students?
1. Will the introduction of a Purdue-Kaplan university in our system result in a decline in the number of students attending campus-based programs?
2. How might the NewU impact the effort to increase students taking summer courses?
3. Could this be an opportunity to connect with former students who have not been retained at Purdue WL to finish their degree?
4. Will New University continue to be open access?
5. What kind of student services does Kaplan have in place now? Will certain resources (like the DRC or SI) be supporting the New University classes as well, or will they continue to support WL exclusively?
6. To what degree will Kaplan University students have access to Purdue WL library resources?
7. What LMS (learning management system) platforms does NewU use and how do those compare to what we have at Purdue?
Q16: What are the financial aspects of the transaction?
1. Will profits from NewU stay in NewU or will Purdue WL have access to it?
2. What is the “cash flow waterfall?”
3. What does the 12.5% fee cover?
4. Is Purdue liable for covering NewU’s financial shortfalls?
5. Can you please explain to me the significance of this section of the corporate filing? Material Departures from NU Policy Guide or the Adverse Impact Fee?