Purdue and Kaplan: The Future of Online Education?

State colleges are in trouble, and so are private, for-profit colleges. The answer may be for them to join forces.

State colleges are struggling as taxpayers angrily demand more return on their investment. Many recent grads are wandering in the wilderness with heavy debt burdens and a lack of job prospects. State legislatures are tired of pouring money into public universities if their young citizens don’t have much to show for it. Despite falling unemployment, college grads age 22 to 27 are stuck in low-paying jobs that don’t even require a college degree. The percentage of young people languishing in low-skill, low-paying jobs is 44%, a 20-year high.

Meanwhile, private, for-profit, online universities are facing crises on multiple fronts, as high-profile scandals recently forced some to close their doors, and as frightening stories of fleeced students caused a big dip in enrollment.

Enrollment at the University of Phoenix, America’s largest for-profit university, was about 460,000 students seven years ago. Now it’s down to about half that number.

Purdue’s decision to buy Kaplan illustrates just how much established institutions need new revenue streams — and how much for-profit online schools need connections to well-established, trusted universities.

Expect to see more public universities snatching up private online schools as the education system continues to adapt to the digital era.



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