In 2017, Purdue University, one of the most prestigious universities in the world, purchased the failing for-profit, on-line entity, Kaplan University. Purdue promised that Kaplan, renamed “Purdue Global,” would deliver a “world-class” education to a broader range of students.
Two years later, Purdue Global has lost millions of dollars, the Purdue system is bleeding its regional campuses dry, and the quality of education Purdue Global provides has seriously shortchanged the citizens of Indiana who were told they would be the first to benefit.
In October 2018, Purdue University President Mitch Daniels delivered the news to Purdue's Board of Trustees that Purdue Global had operated at a loss of $38 million in its first year.
To put that loss in perspective, $38 million represents more than a quarter of the operating budget for both Purdue Fort Wayne and Purdue Northwest. According to data from the National Center for Education Statistics, Purdue reported $145 million in expenses for PFW in 2017. Purdue Northwest had about $155 million in expenses during this period.
This comparison is important. The board of trustees and Daniels explained to “The Chronicle of Higher Education” in April 2017 that they viewed acquiring Kaplan as they view “the creation of regional campuses.” When Purdue purchased Kaplan, it said it would bring educational opportunity to new students who could not otherwise be reached. Many faculty argued that a better way to expand Purdue's quality and reach was to commit more resources to its already-existing regional campuses.
That argument was based on the fact that Purdue traditionally spends a good portion of its budget on instruction, in line with other prominent public and private universities. For example, according to research by the Century Foundation, Purdue University spends $1.16 of every tuition dollar on instruction. That amount translates into professors designing innovative curriculum informed by their research, meeting face to face with students both inside the classroom and during office hours, and providing individual and small-group attention to ensure students are learning.
Purdue Global, by comparison, spends just 13 cents of every dollar. Purdue Global nickels and dimes many students who could have had a high-quality education had they attended one of Purdue's regional campuses.
This situation looks even worse, given that Purdue Global has been sucking up resources that otherwise could improve the regional campuses. Both Fort Wayne and Northwest have seen significant budget cuts, resulting in decreased program offerings and support for students.
Purdue Global's online-education-on-the-cheap model underscores several failures faculty themselves predicted two years ago.
First, Purdue faculty have had little to no oversight over the core academic functions and budgetary matters of the online university.
By their own account, the very people hired for their expertise – its faculty – have no say in Purdue Global operations. They also have no direct control over the curriculum they teach, delivering courses developed behind closed doors.
This goes against the widely understood principles formulated by the American Association of University Professors and other higher education groups that have underscored the success of higher education in the United States: namely, that faculty “determine the appropriate curriculum and procedures of student instruction.”
Second, by eliminating the role of faculty in Purdue Global, the things that have made Purdue the successful university system it is – instruction and curriculum – have been devalued. The financial agreement Purdue made with Kaplan Higher Education incentivizes Purdue to reduce how much it spends on the “academic functions” of Purdue Global. As a March 2018 document filed with the Securities and Exchange Commission makes clear, Kaplan, a for-profit corporation, receives a payout if Purdue spends less on Purdue Global's “academic functions.” These are defined, in part, as “development and quality control of all curriculum resources.”
By creating Purdue Global, Daniels and the trustees signed an agreement that commits them to investing less in the high-quality education students receive at regional campuses as well as giving students at Purdue Global a low-quality junk education.
Dahn Shaulis, an education writer who first noted the $38 million operating loss by Purdue Global, said the loss may be just the tip of the iceberg.
“The $38 million net operating loss for Purdue University Global does not bode well,” Shaulis said. “But without more information about the school's expenses, it's difficult to know where the operation can go from here. What we do know is that Purdue University Global's expenses totaled more than $131 million in 2018. What we don't know is how much of the budget was spent on marketing and advertising, instruction and executive compensation, key items of a university's budget.”
What all this makes clear is that Purdue Global is a raw deal for students and their parents. It is a raw deal for faculty and staff. It is a raw deal for Hoosiers. And, because Purdue Global has been floated as a model for other universities, it also is increasingly a raw deal for higher education throughout the United States.
Purdue's decision to create Purdue Global in fact does the opposite of what it sought to do. It decreases access to quality education for students. As Harry Targ argues in a recent piece in “Jacobin,” non-traditional students would benefit more from tuition-free higher education, which would allow them to attend Purdue's high-quality programs at West Lafayette, Fort Wayne and Northwest, than they would from seeing high-quality instruction and curriculum replaced with an institution such as Purdue Global, defined by the drive to reduce its commitment to “academic functions” to serve profitability for a few.
As Purdue University faculty, we want to advance good policies that truly support increased access to quality higher education in Indiana.
Indeed, faculty in the Purdue West Lafayette chapter of the American Association of University Professors have already passed a resolution calling for stronger faculty governance over online courses.
In line with this goal, we call on Indiana faculty, students, parents and voters to support our campaign to raise the quality of public education in Indiana and reverse a spiraling downward trend.
We insist that Purdue Global be held to the same high standards of transparency, accountability and oversight as all other public universities in Indiana. Until that time, Hoosiers should not put their trust in Purdue Global.
Steven Alan Carr is a professor of communication and president of Purdue Fort Wayne's American Association of University Professors chapter; Bill V. Mullen is a professor of American studies and vice president of Purdue West Lafayette's AAUP chapter; and Dave Nalbone is a professor of psychology at Purdue Northwest and president of the Indiana Conference of the AAUP.