California's Deal With Kaplan

May 26, 2010

Last fall, the California Community Colleges Chancellor's Office announced what some perceived as a partial solution to the budget-related enrollment restrictions that threatened to disrupt the educational plans of many students. Under a memorandum of understanding with Kaplan University, students at certain community colleges would be able to take specific online courses – at a steep discount off the for-profit institution's normal tuition rates, though still paying significantly more than they would at their own college – with the assurance that the credits would transfer back to their home institutions, allowing them to stay on track to earn an associate degree.

Six months later, though it is unclear how many students have taken advantage of the option, critics view the deal as at best an "evil necessity" and at worst a dereliction by community college and state leaders of their responsibility to ensure a low-cost postsecondary education for state residents. Some also worry that Kaplan's marketing of the agreement gives prospective students the appearance of a state endorsement of the company in particular and for-profit education in general.

Kaplan's California Education Assistance Programs give associate-degree students at California community colleges with which Kaplan has an articulation agreement -- the program is being tested only at a limited number of institutions right now – a 42 percent tuition discount when they enroll in individual courses. Textbooks are included in the cost of tuition.

Still, this is not a cheap endeavor. A standard three-credit online course at Kaplan costs $1,113, and a discounted three-credit course there costs California students $645. By comparison, a three-credit course at a California community college costs a mere $78. Despite the cost, Kaplan officials believe they are helping the state's community colleges at a difficult time.

"Kaplan University recognized that California Community Colleges were facing unprecedented challenges and we knew there was an opportunity to help," Jaime Cocuy, vice president for Kaplan's Strategic Alliances Organization, wrote in an e-mail. "Offering single online courses provides students with an innovative opportunity to complete their education on time. It's a solution to a problem. We didn't come into this arrangement with any preconceived expectations. If we can help one student, that's good enough for us. However, offering single course options is not our primary mission. We came to an agreement with the Chancellor's Office that we thought would help students and focus on student success. Once students have an experience with Kaplan University, they might decide that what we're offering is the best option for them, in which case they may choose to attend Kaplan for their bachelor's degree. We are all about expanding access to higher education."

Scott Lay, president of the Community College League of California, a nonprofit advocacy group representing the state’s 72 local two-year-college districts, doubts that the single-course option at Kaplan will appeal to many of the state's community college students.

“Not many students are going to willingly pay [$645] for a class when they can pay $78,” Lay said. “There are some students who are saying, ‘What’s most important for me is getting a degree.’ For them, it may be a wise investment. But I imagine interest in this program will wane as enrollment demand declines over the next few years. Right now we’re at the peak of California high school graduation and, with 2.3 million unemployed in the state, we hope we’re at the peak of that as well.”

Lay believes the deal is an unfortunate consequence of the state’s disinvestment in public higher education in recent years. He noted that it was perceived as one of the few options -- though not an ideal one -- to keep the path to degree completion open for some students.

“I think the initial reaction was surprise because this was a unique [MOU] with the for-profit sector, a perceived competitor of community colleges,” Lay said. “It’s just a sign of the triage that’s going on in California higher education. We’re not always happy about the decisions we make in triage, but we want to make sure we keep people in higher education. If we don’t think outside of the box, that might not always be possible. Even though it breaks the hearts of supporters of public education, we can’t wait a decade until our budget situation remedies itself. This model may help some students.”

Jane Patton, president of the Academic Senate for California Community Colleges and a communications professor at Mission College, is less forgiving in her assessment of the Kaplan deal.

“I know [Chancellor Jack Scott's] heart was in the right place when he made this agreement, but we’re just not convinced this is the right way to do it,” Patton said. “The initial concern faculty had with the [memorandum of understanding] was that we were not consulted when it was written. A lot of [individual California community] colleges were approached by Kaplan before then and told them, ‘No, thank you.’ We would have been more than happy to let the chancellor know our concerns, but we weren’t involved in the process, even though this is an academic matter and affects students and their ability to transfer.”

Patton added that faculty representation had been a part of ratifying prior memorandums of understanding. For example, she noted that the Academic Senate vetted and ultimately approved an agreement with National University, a San Diego-based private nonprofit institution with branches throughout the state, a few years ago. In that case, she added that faculty were able to put in protections they thought necessary to ensure proper transferability of credit. With the Kaplan deal, Patton says, students may not be getting the transferability they think that they are getting.

“If a student takes five or so courses with Kaplan, they may be able to take these credits back to their community college but there’s no telling whether a [California State University] will take it or not,” said Patton, noting that a student may simply choose to forgo the stress of figuring out how to transfer these credits back to a public institution and go on to pursue a baccalaureate with Kaplan instead. “Articulation is a major concern here.”

Terri Carbaugh, a spokeswoman for the California Community Colleges Chancellor's Office, argues that the MOU should assuage some of these transferability concerns. As the Chancellor’s Office cannot prevent Kaplan from marketing itself to California community college students on a single-course basis, she believes the recent agreement gives Kaplan guidance on how it should go about this process for those who are interested in taking advantage of it.

“In the event students taking Single Courses wish to pursue their baccalaureate degree at a [California State University] or [University of California] institution, [Kaplan] will ensure articulation agreements are in place between [Kaplan] and the [California community college] that stipulate Single Courses provided by [Kaplan] will be accepted by a CSU or UC in lieu of the community college’s own transferable course,” the memorandum reads.

Carbaugh said it is incumbent on Kaplan to ensure that these articulation agreements exist and work as intended.

“I think it’s important to note that we don’t have oversight authority over Kaplan, or any private for-profit for that matter,” Carbaugh said. “In the same way that we have a dialogue with UC and CSU, we want to make sure we have a dialogue with Kaplan. We felt it better to work with them and try to educate those institutions on the value of transferability. Whether or not [transfer works] 100 percent [of the time] or [Kaplan] gets these transfer agreements, that’s up to them."

The California Legislature is currently considering a bill that would change how and which credits are transferable between the state’s community colleges and institutions within the California State University System. It is unclear whether this piece of legislation would ensure the seamless transferability of these Kaplan credits, and Lay and Patton are divided in their interpretation of it.

Unlike the California State System, however, the University of California system is not beholden to the Legislature on issues of credit transferability, and the faculties at each institution determine which courses they will and will not accept. As many University of California campuses still do not accept certain community college credits, it is likely that Kaplan credits would meet a similar fate.

“I’m hard pressed to see where we could modify this [MOU] to make it favorable to faculty,” Patton said. “I appreciate the chancellor trying to keep opportunities open, but we didn’t need to do this. There are other options out there. For instance, virtually every California community college offers courses online. If I’m in the Bay Area and I want to take a philosophy course and can’t get it at my college, then I bet there’s a college somewhere in the state where I can take it online.”

In spite of the criticism, Lay is encouraged by at least one portion of the agreement with Kaplan. The memorandum requires that Kaplan provide to the Chancellor’s Office “the current number of enrolled students and transfer students and their persistence rates for each transferring institution.” Garnering this data from a for-profit institution that does not often share it is a worthy outcome, Lay said.

“I think most people see this as an incentive from, at best, an evil necessity,” Lay said. “But, if you have to go down that road, then let’s see what we can get out of it. This will allow for better tracking of our students who are coming and going and taking classes at multiple institutions.”

This data will also give the Chancellor’s Office the necessary information to judge the success of this agreement when the time comes to decide whether to renew it or not, Carbaugh said. To date, she said, the Chancellor’s Office has not been able to track how many students transferred credits to and from Kaplan, but it was able to do so for various other for-profit institutions.

Data shows us a 10 year increasing trend line of transfers to for-profit universities – from 6 to 12.9 percent,” Carbaugh noted via e-mail. “This data shows low income, black, Hispanic and women are more likely to make this decision, even though it is an expensive option. … This is why the data portion of the [memorandum of understanding] is important to the Chancellor’s Office. We are paying close attention to where our transfer students go -- public 4-year, private nonprofit 4-year, private for-profit, etc.”

Carbaugh said that, in deciding whether to renew the deal in two years, the Chancellor's Office would also have to consider the perception among critics that this agreement amounts to an explicit endorsement of Kaplan.

“I appreciate the gist of what critics are saying, that the nature of the [memorandum of understanding] gives credibility to Kaplan,” Carbaugh said. “By our partnering with them, there’s an assumption that it’s a good thing. We’re sensitive to the fact that the perception exists. We’re not trying to endorse one for-profit over another or the for-profits in general. It’s possible we underestimated the extent to which this would be marketed by Kaplan. We can see it’s being used as a marketing tool for them. But, the extent to which this agreement provides protection and assurance for students, the jury’s still out. We’ll just have to watch over a period of two years and see how it has served students.”

Whether the agreement with the Chancellor's Office is renewed or not, Kaplan officials are optimistic about their institution's future in the Golden State.

"This is not a short term initiative," Cocuy wrote. "We've been serving California students for many years and have a long-term commitment to helping them meet their academic and career goals. Before the [memorandum of understanding], we had transfer agreements with 75 California community colleges. We'll continue to support these and other new relationships that focus on student success in California."

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