Kaplan's CEO Faces Tough Questions From Public-University Leaders

The Chronicle of Higher Education - Professors at public universities sometimes moonlight as instructors at for-profit colleges, and two provosts on Tuesday asked the chief executive of Kaplan Inc., Andrew S. Rosen, why his company won't divulge the names of those professors he employs.

Professors at public universities sometimes moonlight as instructors at for-profit colleges, and two provosts on Tuesday asked the chief executive of Kaplan Inc., Andrew S. Rosen, why his company won't divulge the names of those professors he employs.

That spirited exchange here at the annual meeting of the Association of Public and Land-Grant Universities followed Mr. Rosen's stump speech on why the for-profit sector is advancing the mission of broader student access, which public universities began 150 years ago. He also addressed possible new federal regulations that could harm his sector.

Robert Smith, provost of Texas Tech University, said he recently discovered that a professor at his university was also working for American Public University, an online for-profit institution. That second job required Mr. Smith's approval, something the professor had not sought. Mr. Smith and another provost told Mr. Rosen that public universities create the intellectual capital of their faculties, by training and hiring professors, and that it is a conflict of interest for those professors to also work at for-profits.

M. Peter McPherson, the association's president, said this is an issue that festers across much of public higher education. And Mr. Smith demanded that Kaplan and other for-profits disclose who is working for them.

"When are you going to get your act together and start publishing that list?" Mr. Smith said.

Kaplan's hiring of public-university professors is not a conflict of interest, said Mr. Rosen, but rather an issue of competition. And he said that the two sectors should not be adversaries, but should look instead for ways to collaborate. He also said the joint hiring arrangements, although not publicly divulged by the company, are a "two-way street," as professors benefit from Kaplan's training too.

Mr. Rosen suggested that Kaplan would consider releasing the names. The company has nothing to hide, he said, and the question is one of many the relatively young for-profit sector is confronting as it evolves.

"Nobody's ever pushed on that front," he said.

'Derision and Condescension'

That point echoed his overall argument: That for-profits are the latest in a long line of innovations in American higher education. Mr. Rosen began his speech by describing the "derision and condescension" private colleges directed toward land-grant universities when they were created, following an act of Congress 150 years ago. He compared the reception given those early land-grant institutions to some of the criticism his industry faces today.

He acknowledged problems had occurred at for-profits, saying he was "personally appalled and embarrassed" by a recent Government Accountability Office investigation that found deceptive recruiting practices on two Kaplan campuses, as well as at other for-profit institutions. Kaplan later suspended enrollments on those campuses.

However, Mr. Rosen took issue with the Education Department's proposed "gainful employment" rule, which would cut off federal student aid to programs whose graduates have high debt-to-income ratios and low loan-repayment rates. Mr. Rosen said that the rule would unfairly penalize lower-income students, and that the current proposal had a 99-percent correlation between repayment rates and the percentage of Pell Grant-eligible students at an institution.

In the long run, Mr. Rosen said, Kaplan and other for-profit colleges will fill a respected role. Citing President Obama's graduation goal, he said America needed to educate more nontraditional students. And that vast need is one he said public universities cannot meet alone.

"Will your states fund that expansion?," he asked.

Read the rest of the story at The Chronicle of Higher Education