Report: Education Dept. to Back Kaplan, EDMC Deals

Inside Higher Ed

By Paul Fain

September 19, 2017

Purdue University in April announced its plan to acquire Kaplan University in a complex deal to create a new nonprofit online university. The state of Indiana approved the acquisition, and experts predicted the Trump administration would as well, given moves the department has made to roll back what it calls unnecessary or overreaching Obama-era regulations and to rule in favor of for-profits in some individual cases. The final and likely most difficult regulatory hurdle for the Purdue-Kaplan partnership, however, will come from the Higher Learning Commission, the regional accreditor for both universities.

The bid by the Dream Center, a nonprofit missionary organization, to purchase Education Management Corp. (EDMC) and its Argosy University, South University and Art Institutes campuses has drawn criticism. The offer is reportedly $60 million for institutions that collectively enroll about 60,000 students. Consumer, student and veterans’ groups had urged the department to tightly scrutinize the deal, in part over concerns about a return to what critics said were predatory actions by some EDMC campuses.

One of several accrediting agencies that oversee EDMC already has rejected Dream Center’s purchase of two Art Institute locations, citing insufficient information about the deal. Another accreditor, however, backed a portion of it.

BuzzFeed reported that the department “does not see any impediment to EDMC’s request for approval of the change in ownership or its request for approval of nonprofit institution status.”