Something Wrong in Purdue Acquisition


By Steve Key

Have you ever had the feeling something’s not right, but can’t quite put your finger on why?

That’s the feeling I have concerning actions of Purdue University taken during the last days of the General Assembly connected to its planned acquisition of the online learning platform of Kaplan University.

In the 168-page conference committee report for the state budget bill (H.E.A. 1001) published 24 hours before its final vote in both the Indiana House and Senate, language was inserted at the request of Purdue University to exempt a “postsecondary SEI affiliated educational institution” from the Open Door Law, Access to Public Records Act and audit by the state Board of Accounts.

The language was developed to cover Purdue’s New U or whatever it decides to call the Kaplan courses in degree and certificate programs that currently serve 32,000 students through 2,462 faculty members at 15 campuses.

New U will be controlled by Purdue University. It’s my understanding there will be a six-member board of directors in charge with five of the six being Purdue University board of trustees members.

I recently talked to two Purdue lobbyists in an attempt to understand why a public university that has operated under the accountability tools of the state’s public access laws and SBOA audits would ask the General Assembly to exempt this new educational acquisition.

I didn’t get a reason for the exemption, but explanations as to how New U is different:

  • There will be no public funding for New U,
  • New U is run by a “separate” board than Purdue University’s Board of Trustees,
  • The deal was secured with $1.

Nothing in that list explains why New U – controlled by Purdue – should be shielded from those pesky public access laws and state audit. There are still plenty of county hospitals across the state that haven’t depended upon taxpayer dollars for years to operate, but they still fall under the Open Door Law, Access to Public Records Act and are subject to SBOA audits.

The university lobbyists pointed out that the budget bill language includes a provision for reporting to the public certain aspects of the operations. I’ll grant there’s a provision that says the state Commission on Higher Education may require New U to provide information on its financial situation, academic programs and instruction and student outcomes and make that information public, but the key word is “may.” That’s different than “shall.”

The deal also apparently raised some questions concerning the Indiana Constitution’s ban on the state being a stockholder in any corporation (Art. 11, Section 12), because the language inserted in the budget bill’s conference committee report back on pages 156 and 157 includes a provision declaring that this affiliation doesn’t violate the state Constitution.

It reminds me of another deal made by now Purdue president, then Governor Mitch Daniels – the leasing of the Indiana Toll Road. The legislation approving that public-private agreement included a provision that essentially said if we violated state laws, which I believe occurred, concerning how this deal was done, the General Assembly forgives us.

I don’t think the budget bill language was added nefariously – probably more a matter of timing as Purdue-Kaplan negotiations were ongoing. And I have no reason to believe the exemptions to public access and audit was included with ill intent.

I have no qualms about the innovative move taken by Purdue to reach potential students who can’t take the time to attend traditional college courses over a four-year period.

As Daniels explained last week to the Education Writers Association: “None of us know how fast or in what direction online higher education will evolve, but we know its role will grow and we intend that Purdue be positioned to be a leader as that happens.”

If a public university is launching initiatives toward an uncharted horizon, I would argue all the more reason to have in place, the tools of public accountability.

This just doesn’t feel right to me.

Steve Key is executive director and general counsel for the Hoosier State Press Association.