Kaplan University

Following several years of significant enrollment decline, Graham Holdings sold Kaplan University to the Purdue University system for one dollar in March 2018, who rebranded the institution as Purdue University Global. In exchange, Purdue agreed to employ Kaplan, Inc. as the exclusive provider of nonacademic functions for thirty years, with a six year buyout option, and Kaplan, Inc. agreed to assume responsibility for liabilities resulting before the transaction.[18] According to the contract terms, Kaplan receives 12.5 percent of the university's revenue, as long as funds are available after all operating expenses and guaranteed payments to Purdue have been covered.

Kaplan University used its access to a large and diverse pool of at-risk students to conduct teaching experiments to adjust its online programs. It partnered with researchers from Harvard and Stanford who found that the online medium allowed for better analysis of learning outcomes and experimental teaching practices.[36]

On August 17, 2011, the U.S. District Court for the Southern District of Florida issued a series of rulings in three related cases based on the federal False Claims Act. The cases included three separate complaints by three former Kaplan University employees, Messrs. Wilcox, Gillespie, and Diaz. The court dismissed the claims brought by Wilcox in their entirety. (Diaz v. Kaplan Univ., No. 09–20756–civ, 2011 WL 3627285, (S.D.Fla. Aug. 17, 2011)).[38] Wilcox was later, and separately, convicted for making threats against Kaplan employees. (U.S. v. Wilcox, 1:08-cr-00256, U.S. District Court, Northern Division of Illinois (Chicago)).[39] The court also dismissed in part Gillespie’s complaint, and, on July 16, 2013, the court entered summary judgment in favor of the company on all remaining claims in the Gillespie complaint. (Diaz v. Kaplan Univ., No. 09–20756–civ, 2011 WL 3627285, (S.D.Fla. July 16, 2013)).[40] Gillespie appealed to the U.S. Court of Appeals for the Eleventh Judicial Circuit and, on March 11, 2015, the appellate court issued a decision affirming the lower court’s dismissal of all of Gillespie’s claims. (Urquilla-Diaz v. Kaplan University, No. 13-13672 (11th Cir. 2015)).[41]

On Diaz’s compliant, the court dismissed the entire False Claims Act claim and on October 31, 2012, the court entered summary judgment in favor of Kaplan as to the sole remaining employment claim in the Diaz complaint. Kaplan also received a judgment for costs against Diaz based on his frivolous employment claims. (Urquilla-Diaz v. Kaplan University (1:11-cv-23394)).[42] However, Diaz appealed and, on March 11, 2015, the Appellate Court affirmed the dismissal of three of the four Diaz claims, but reversed and remanded on the claim that incentive compensation for admissions representatives was improperly based on enrollment counts. (Urquilla-Diaz v. Kaplan University, No. 13-13672 (11th Cir. 2015)).[43] Kaplan filed an answer to Diaz’s amended complaint and a summary judgment briefing schedule has been set.

On July 7, 2011, the U.S. District Court for the District of Nevada dismissed another False Claims Act case brought by another former employee of a Kaplan nationally accredited campus, Mr. Jajdelski, in its entirety and entered a final judgment in favor of Kaplan. The claim found that Jajdelski had failed to present evidence the company received student aid funds for "phantom students". (Jajdelski v. Kaplan, Inc., 834 F. Supp. 2d 1182 (D. Nev. 2011)).[44] Like the other cases, the federal government has repeatedly declined to intervene. On February 13, 2013, the U.S. Circuit Court for the Ninth Judicial Circuit affirmed the dismissal in part and reversed the dismissal on one allegation under the False Claims Act relating to eligibility for Title IV funding based on claims of false attendance. (CHARLES JAJDELSKI V. KAPLAN. INC., No. 11-16651 (9th Cir. 2013).[45] The surviving claim was remanded to the District Court, where Kaplan was again granted summary judgment on March 9, 2015. (U.S. EX REL. JAJDELSKI v. KAPLAN, INC.)[46] The plaintiff appealed, and on March 22, 2017, a Ninth Circuit panel upheld a lower court's ruling in favor of Kaplan.[47]

In 2010 Kaplan and other for-profit education companies came under scrutiny from the U.S. Congress due to concerns that the industry leaves too many students with heavy debts, and with credentials that are of little help in finding jobs.[48] Much of the report focused on Kaplan College programs, which are no longer a part of Kaplan University. Although the report was critical of Kaplan Inc., Senator Tom Harkin, then chair of the investigating committee noted "Kaplan stands alone among the large, for-profit education companies for having taken what are, in my opinion, real and significant steps to reduce high withdrawal rates and high default rates by implementing the Kaplan Commitment program."[49]