Since the topic has been in the news so much with Grand Canyon and others, there is no reason Purdue Global should be any less widely known for how it operates.

Officially Purdue Global is listed as Public Benefit Corporation, which is step between for profit and non profit. But it’s certainly not merely a regular part of Purdue. It’s a separate entity and a portion of all revenue goes to the company they purchased it from. And part of the purchase agreement gives the former Kaplan company considerable control over its operations and decision making.

Kaplan gave the huge business to Purdue for $1 because they can use the Purdue name to bring in even more money, of which they are still entitled to a portion.

https://tcf.org/content/commentary/purdu...niversity/

Here’s another article detailing how they got the IRS off their backs.
https://tcf.org/content/commentary/purdu...-approval/

Purdue does offer legit online programs that are largely the same as on campus thru an entirely different entity, Purdue Online. It’s a confusing mess. But very profitable, at least for some people.

The deal Purdue has with “Graham Holdings” is almost identical to the deal GCU has with Grand Canyon Education. Graham Holdings is the corporate structure for all of the holdings the Washington Post/Kaplan Education had before the actual Washington Post was sold off.

https://en.m.wikipedia.org/wiki/Graham_Holdings

Purdue assumed all of the debt of the school when they bought it, they are obligated to pay Graham (formerly called Kaplan) to advertise, recruit, staff Purdue Global, manage the financial aid, career services, counseling, tutoring, support etc. Graham owns and runs the tech the education is provided over. It’s likely that every interaction a student ever has is from a Graham employee, not Purdue.

All of that money flows out from Purdue to Graham. Then, Graham also takes a cut of the actual revenue, on top of the being paid to run the operations. But Purdue is losing money from it (at least on paper, and almost for sure in reality too), while Graham gets paid regardless if Purdue makes a dime or not.

“Following several years of significant enrollment decline, Graham sold Kaplan University to the Purdue University system for one dollar in March 2018, which was rebranded as Purdue University Global. In exchange, Purdue agreed to employ Kaplan, Inc. as the exclusive provider of nonacademic functions,[32] and Kaplan, Inc. agreed to assume responsibility for liabilities resulting before the transaction. According to the contract terms, Kaplan receives 12.5 percent of the university's revenue, as long as funds are available after all operating expenses and guaranteed payments to Purdue have been covered. Purdue University Global reported an $18 million loss in 2018, and a $43 million loss in 2019.[33]

In February 2020, GHC reported that Purdue University Global owed Kaplan Higher Education $68.4 million for services and deferred fees and $18.6 million for an advance from the Kaplan University transaction.[34] Despite spending a reported $132 million in marketing, more than $4,400 per enrolled student,[35] and four times their competitor SNHU,[35] enrollments at Global have remained virtually flat. In October 2020, Purdue University Global reported -$47 million in net assets, with a net operating loss of $103 million.”

I agree with this. Pretty sure Arizona is a similar deal after whichever diploma mill they bought.

The Executive MBA programs every big state school (and some smaller ones as well) are entities run for a profit.

I’m not sure how UofM Global works but I’m getting my Doctorate from them (for free - I work at Memphis) and it’s well run and I’m learning as much as I did in my Master’s program that got absorbed by Yale.

I’m not sure Purdue Global’s quality, but I’ve been pleasantly surprised!

(11-20-2023 01:07 PM)tigergatorcyclone Wrote:  I’m not sure how UofM Global works but I’m getting my Doctorate from them (for free - I work at Memphis) and it’s well run and I’m learning as much as I did in my Master’s program that got absorbed by Yale.

I’m not sure Purdue Global’s quality, but I’ve been pleasantly surprised!

Different deal though. Lots of schools have good online programs. Purdue Global is a separate entity in the Purdue system and it's run basically the same as a for-profit college which it was when it was Kaplan. Graduates don't get a Purdue diploma, they get a Purdue Global diploma.

Same deal with University of Arkansas - Grantham, which was a for-profit based in KC. It’s part of the University of Arkansas system but very much not a part of UA-Fayetteville.

I suspect this deal that UIdaho just did with the University of Phoenix will be much the same sham.

(11-20-2023 09:05 AM)Todor Wrote:  Since the topic has been in the news so much with Grand Canyon and others, there is no reason Purdue Global should be any less widely known for how it operates.

Officially Purdue Global is listed as Public Benefit Corporation, which is step between for profit and non profit. But it’s certainly not merely a regular part of Purdue. It’s a separate entity and a portion of all revenue goes to the company they purchased it from. And part of the purchase agreement gives the former Kaplan company considerable control over its operations and decision making.

Kaplan gave the huge business to Purdue for $1 because they can use the Purdue name to bring in even more money, of which they are still entitled to a portion.

https://tcf.org/content/commentary/purdu...niversity/

Here’s another article detailing how they got the IRS off their backs.
https://tcf.org/content/commentary/purdu...-approval/

Purdue does offer legit online programs that are largely the same as on campus thru an entirely different entity, Purdue Online. It’s a confusing mess. But very profitable, at least for some people.

The dirty little secret is that a lot of colleges give cuts of tuition to third-party servicers and online program management companies. There's an effort to require disclosure, but I don't believe the results have been published yet. We will probably see a lot of familiar names doing this.

Purdue Global does stand out with a 30-year contract while most are much shorter. The Purdue system actually gets a pretty good deal from Kaplan by current standards, but the ground underneath them could change by 2047.

I wouldn't worry about using a public benefit corporation to structure it, that's just bureaucratese. SUNY campuses use corporations to fund staff positions and whatnot, for example the UB Foundation. All of the public colleges in Pennsylvania are technically not owned directly by the state.

The problem for Grand Canyon University is that the same people control their for-profit and their not-for-profit arms, so they're making deals with themselves. Purdue Global at least gets some oversight from the Purdue system in a way that GCU doesn't get.

Sure, you could argue that Purdue is asleep at the wheel. And maybe GCU will make that argument in their lawsuit.

But if we're talking about the post from the other thread, the distinction is that the Education Department does not view GCU's arrangement the same as Purdue Global's arrangement. GCU is still considered for-profit for student aid purposes, while other programs run by online program managers aren't.

CenterSquarEd-

You are absolutely right. I’d say relatively few schools are actually running all aspects of their online programs. For those that don’t know, OPM’s (online program managers) come in with an offer and they have the programs and everything all set up and ready to go. All they have to do is stick a different schools name on their program and make it live online.

For a small liberal arts college that is looking to ad revenue but doesn’t have millions to invest in online education education, it’s an easy decision. Very little, if any money up front, but it’s a revenue sharing model. The school isn’t buying a service that is ever paid off. The OPM takes a huge cut forever. In many cases, they are taking a majority of the money.

https://www.gao.gov/products/gao-22-104463

Concordia University Portland had thousands of online students and was the largest online provider of Masters in Education at one point. They were bringing in hundreds of millions of dollars. And they went bankrupt and closed. Because the OPM deal they signed gave alway almost all of the money. It totally surreal. I don’t get why schools sign these deals in most cases.

These are definitely worth a read.

https://www.oregonlive.com/education/202...ality.html

https://www.insidehighered.com/digital-l...d-covid-19

I work for Purdue and am enrolled in one of Purdue Global's certificate programs right now. Not being too familiar with Grand Canyon University, I'm intrigued by the comment that there's no separation between GCU and the operating entity Grand Canyon Education. As was mentioned earlier, Purdue and Kaplan are separate entities. The reason Purdue has a good arrangement with Kaplan is because they negotiated for decent terms and operating Purdue Global is now profitable for Purdue too if this blog is credible (which it seems to be): https://onedtech.philhillaa.com/p/purdue...in-fy2021. I'll be curious to see where we're at in 2047 and how Purdue handles the arrangement - way too far in the future to make any crystal ball guesses.

It seems that you're either an online education provider trying to build a credible brick and mortar campus and reputation (Grand Canyon and Liberty), you're an established non-profit institution with online offerings that you've grown successfully (University of Maryland), or you're buying your way into the online education market to jump start the process (Purdue). It'd be interesting to see an in-depth look at the differences in operations between the three models.

(11-21-2023 06:29 AM)Heeltopper Wrote:  I work for Purdue and am enrolled in one of Purdue Global's certificate programs right now. Not being too familiar with Grand Canyon University, I'm intrigued by the comment that there's no separation between GCU and the operating entity Grand Canyon Education. As was mentioned earlier, Purdue and Kaplan are separate entities. The reason Purdue has a good arrangement with Kaplan is because they negotiated for decent terms and operating Purdue Global is now profitable for Purdue too if this blog is credible (which it seems to be): https://onedtech.philhillaa.com/p/purdue...in-fy2021. I'll be curious to see where we're at in 2047 and how Purdue handles the arrangement - way too far in the future to make any crystal ball guesses.

It seems that you're either an online education provider trying to build a credible brick and mortar campus and reputation (Grand Canyon and Liberty), you're an established non-profit institution with online offerings that you've grown successfully (University of Maryland), or you're buying your way into the online education market to jump start the process (Purdue). It'd be interesting to see an in-depth look at the differences in operations between the three models.

Bit dry, but the entire decision is online: https://www.documentcloud.org/documents/...O-11-06-19

I’ve been following the University of Idaho deal with Phoenix.

For those interested, there’s a lot of really good information here-
https://www.uidaho.edu/president/univers...ffiliation

To me, it looks a lot closer to an actual purchase than the Purdue/Kaplan deal. It was more of a transfer of assets and debt, a switch to non profit status under Purdue and then an ongoing management arrangement with some revenue sharing.

Idaho is paying over half a billion for Phoenix. That should be around the value of the brand and assets. However, it’s not becoming part of the University of Idaho at all. It’s going to be a new non-profit entity that is run by U of I. It may or may not be called University of Phoenix.

Everything about Phoenix will remain in place in the near/mid term, including everyone running it now. But it will be non-profit status. That’s really the main goal here.

It appears Idaho is planning on using ongoing revenue to pay off the former owners, a private equity group. Keep in mind, the current ownership group only bought it out from the previous shareholders in 2017. So it’s not exactly the original entity as things stand. The original stock holder owned company had shrunk from 470,000 students to around 80,000 when the company was sold to private equity. To me, it appears the private equity group simply saw value, planned to increase the value and get out of the business themselves.

I can’t tell if the current Phoenix owners will be out of the business entirely, or not. It could be structured so they retain some ongoing stake in it, but I can’t tell that for now. I’d guess not, or not much. This appears to be more of a transfer of ownership to the newly created, U of I controlled non profit entity.

I’ll try to do a summary of the UMass deal when I get time. And maybe Arizona buying Ashford, but it has a lot of background and a lot of ongoing issues to address. Very messy.

(11-21-2023 06:29 AM)Heeltopper Wrote:  I work for Purdue and am enrolled in one of Purdue Global's certificate programs right now. Not being too familiar with Grand Canyon University, I'm intrigued by the comment that there's no separation between GCU and the operating entity Grand Canyon Education. As was mentioned earlier, Purdue and Kaplan are separate entities. The reason Purdue has a good arrangement with Kaplan is because they negotiated for decent terms and operating Purdue Global is now profitable for Purdue too if this blog is credible (which it seems to be): https://onedtech.philhillaa.com/p/purdue...in-fy2021. I'll be curious to see where we're at in 2047 and how Purdue handles the arrangement - way too far in the future to make any crystal ball guesses.

It seems that you're either an online education provider trying to build a credible brick and mortar campus and reputation (Grand Canyon and Liberty), you're an established non-profit institution with online offerings that you've grown successfully (University of Maryland), or you're buying your way into the online education market to jump start the process (Purdue). It'd be interesting to see an in-depth look at the differences in operations between the three models.

The main separation is legal separation. They are distinct legal entities, but that’s about all the separation there is. Neither really exist without the other in reality. And they operate essentially as one with the same person in charge of both.