Don Graham, Chairman and CEO of the Washington Post Company, visited the Reuters studio this morning to chat with Chrystia about the future of the company’s Kaplan subsidiary as well as its flagship newspaper. In addition to its popular test preparation courses, Kaplan operates 75 colleges and graduate schools, both online and through brick-and-mortar campuses, that serve 112,000 students. Earlier this year the Department of Education lashed out at for-profit colleges like Kaplan for misleading prospective students about tuition costs and salaries after graduation. The Department proposed new regulations on these institutions that would tie federal aid to the number of students who are repaying their loans.
Graham said that while the Department’s efforts to crack down on bad actors are right-minded, the current proposals will end up having an unintentional yet harmful effect on low-income students:
There is a 99% correlation between the number of Pell Grant students—the number of poor students a campus serves—and the repayment rate under the proposed Department rules… The Department has scored a direct hit on schools that serve poor students. They didn’t want to. They didn’t mean to. But that is what they did. And I hope they’ll reconsider that rule and propose something that in fact cracks down on bad actors but does not punish schools that serve poor students.
Graham offered an alternative proposal, the “Kaplan Commitment,” that would preserve the Department’s intentions to ensure students are not misled but that would not discriminate against poor students. The Kaplan Commitment will allow any student to enroll in any campus or online course that Kaplan operates for five weeks, free-of-charge. If the student decides the program is not for them, they can withdraw without paying a dime in tuition. Graham did note that enacting this change would have a material adverse impact on the company’s earnings, but he said it was worth it to show everyone that at Kaplan students come first.
When asked whether the entire model of for-profit education is a mistake, Graham said that at a time when state universities are seeing their budgets’ slashed, only for-profit colleges like Kaplan are poised to meet students’ needs: