PUR­DUE’S BOLD PLAN

Forbes - - Leader Board -

Mitch Daniels wants to make col­lege more a ord­able and in­crease his univer­sity’s en­roll­ment. Higher-ed purists are aghast.

WAIT­ING FOR Mitch Daniels to pick up a call to his o ce in West Lafayette, In­di­ana, you hear a record­ing of Pur­due’s march­ing band fol­lowed by a hard-to-be­lieve state­ment: “Pur­due has frozen tu­ition at 2012 lev­els through 2019 for all un­der­grad­u­ate stu­dents.”

Daniels, the pres­i­dent of In­di­ana’s ag­ship pub­lic univer­sity, then gets on the phone and says some­thing even more star­tling: In in ation-ad­justed dol­lars, Pur­due costs $4,000 less per year for outof-state stu­dents than it did when he took the job in 2013. In-staters pay nearly $3,000 less, at just un­der $23,000 this aca­demic year for tu­ition, room, board and ex­penses.

Back in 2013, Daniels, now 69, dashed hopes that he would run for the Repub­li­can pres­i­den­tial nom­i­na­tion, sign­ing on at Pur­due in­stead a er two terms as In­di­ana’s pop­u­lar mod­er­ate GOP gov­er­nor—and set­ting out to x the bro­ken busi­ness of higher ed. His rst pri­or­ity: make good on Pur­due’s mis­sion as a land-grant univer­sity, a designation dat­ing back to the Civil War, when the fed­eral gov­ern­ment al­lot­ted land and funds to uni­ver­si­ties that would teach agri­cul­ture and the mechanical arts to work­ing-class Amer­i­cans.

Daniels be­lieved Pur­due wasn’t ful lling that mis­sion. “ e only costs that have out­run health­care in the last three decades are col­lege tu­ition, room and board,” he says. His solution: Freeze stu­dent costs at 2012 lev­els. Pur­due’s ad­mis­sions sta ers balked. “I said, ‘Look, I just landed here on Mars, and I can tell you that the peo­ple back on Earth think col­lege costs too much.’ ”

At­tack­ing a ord­abil­ity from an­other an­gle, in 2016 he in­tro­duced in­come-share agree­ments. Stu­dents who ex­haust fed­eral loans can fund their ed­u­ca­tion with an agree­ment to sign over a share of their fu­ture in­come, usu­ally be­tween 3% and 5% for up to ten years a er they grad­u­ate. (Re­pay­ments are capped at 2.5 times ini­tial costs.) Crit­ics hate ISAS be­cause they’re un­reg­u­lated and untested. Mil­ton Fried­man is said to have in­vented the idea but fa­mously noted that they were “eco­nom­i­cally equiv­a­lent . . . to par­tial slav­ery.” Daniels says, “If you want in­den­tured servi­tude, it’s the stu­dent-loan pro­gram. With ISAS, the risk shi s en­tirely to the lender,” since grads who don’t nd work pay noth­ing.

Daniels’ third bold move in­vited the most crit­i­cism from higher-ed purists. Last year he paid $1—yes, a dol­lar—to ac­quire the be­lea­guered for-pro t, largely on­line Ka­plan Univer­sity from former Wash­ing­ton Post owner Graham Hold­ings Co. Pur­due in­stantly boosted its en­roll­ment by 30,000 Ka­plan stu­dents—most of whom are fe­male, be­tween the ages of 30 and 60, and the rst in their fam­i­lies to go to col­lege. ey are now work­ing to­ward de­grees at the newly named Pur­due Global Univer­sity. A er Pur­due cov­ers op­er­at­ing costs and col­lects $50 mil­lion in tu­ition, Ka­plan is en­ti­tled to 12.5% of Pur­due Global’s rev­enue.

So far, so good. Ap­pli­ca­tions are up 67% since Daniels be­came pres­i­dent. En­roll­ment is at an all-time high, as are alumni dona­tions, grad­u­a­tion rates and the num­ber of star­tups launched by Pur­due re­searchers. Pur­due also ranks No. 126 on Forbes’ list of Amer­ica’s top col­leges, up from No. 143 last year. While other in­sti­tu­tions are cut­ting tenure-track jobs, Pur­due has added 75 tenured engi­neer­ing pro­fes­sor­ships and in­creased the num­ber of stu­dents earn­ing STEM de­grees by 33% (mi­nori­ties are up 50%).

en there’s Boiler Gold, a cra beer on which Pur­due’s hops and brew­ing anal­y­sis lab is col­lab­o­rat­ing with a lo­cal brewer. “It started as a re­search pro­ject,” says Daniels, “and now we can’t make the stu fast enough.”

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