The for-profit Kaplan University will transfer its institutional operations to a nonprofit institution affiliated with Purdue University if Purdue’s board of trustees okays the deal. The plan is outlined in a disclosure Kaplan’s parent company, Arlington-based Graham Holdings, filed with the US Securities and Exchange Commission Thursday morning.
Under the plan, the seven schools that make up Kaplan University will transfer to an institution the document calls “New University.” Kaplan’s approximately 32,000 online and on-campus students and 3,000 faculty and staff will transfer to the new entity. “KU-PACE,” Kaplan’s school of professional and continuing education, will not be part of the deal.
Kaplan will receive “nominal cash consideration” for the transfer under the plan. It will get an agreement with New University to provide operational support, such as information technology, human resources, and financial-aid administration for at least six years and as long as 30 years.
Graham Holdings used to be the Washington Post Co., and revenue from its Kaplan assets once helped cover the losses of the Washington Post. When Amazon owner Jeff Bezos bought the Post in 2013, Kaplan CEO Andrew Rosen wrote that the institution “has been the largest part of the Washington Post Co., and the most important determinant of its economic future.” But years of scrutiny of for-profit education by federal authorities hobbled education operations in the US.
Kaplan agreed in 2015 to sell 38 campuses to the Education Corporation of America but kept Kaplan University and the schools it now plans to transfer to New University. Enrollment at Kaplan University fell 22 percent in 2016, and Kaplan Higher Education revenue fell 27 percent, according to Graham Holdings’ annual report. Graham Holdings still owns other education assets, including Kaplan International and Kaplan Test Preparation. Those assets represented a little more than 60 percent of Kaplan’s revenue in 2016. Graham Holdings bought two new television stations in 2016, and revenue from its TV assets helped offset losses in the education division.