2018 Fall issue of Horizons

because of the merger, maintaining the identities of the original merged entities, logistical space issues and new requirements to finish programs. The Purdue acquisition of Kaplan has not been well accepted by the faculty, as more than 300 faculty members signed a petition urging the Higher Learning Commission to block it. In addition, the University Senate has refused to endorse the acquisition. Purdue faces a long challenge to determine how Kaplan will fit, given the resistance from important constituents. The Purdue acquisition of Kaplan has an additional challenge – the Department of Education’s (ED) position that Purdue may not disassociate itself from the obligations Kaplan incurred prior to the merger. As with all merger negotiations, Purdue and Kaplan negotiated the terms of the merger, and they agreed to include a clause that states “…none of the Purdue Parties shall have or assume any Liabilities of (Kaplan)…” ED’s position comes from the perspective that it wants to be made whole on the loans it provided or subsidized through Kaplan prior to the merger. Bringing the responsibility for those loans to Purdue could impact how Purdue is able to participate in the ED’s loan programs in the future. The merger of Berklee and The Boston Conservatory addressed an issue of trying to maintain a distinct identity for the Conservatory, as many students and donors are proud of the Conservatory’s legacy.

Two ways that the issue of identity was addressed were by the Conservatory being called the “Boston Conservatory at Berklee” and graduates receiving a diploma with the name the Boston Conservatory at Berklee rather than Berklee. Mergers of campuses can create additional logistical issues with space, such as finding adequate parking. One of the ways that the University System of Georgia addressed this issue was by affecting the merger through shared programming and administration, rather than closing facilities. Keeping the facilities of the merged institutions open minimized the issues around having enough space to serve the students. The donation of AIB to the State of Iowa Board of Regents resulted in confusion on what steps were necessary to complete degrees from students of AIB who were unable to do so prior to its closure, how credit hours earned would be accepted and how additional or different degree requirements would be addressed. The answers to many of these questions, and similar ones, should be determined prior to a merger to avoid confusion and frustration. On the whole, mergers in higher education are happening for a variety of reasons that are generally in the best interest of the institutions and the constituents of those institutions, but those mergers often come with challenges that should be considered before the mergers take place.

COLLEGES & UNIVERSITIES SERVICES GROUP

RubinBrown’s Colleges & Universities Service Group provides a full range of assurance, tax and consulting services to colleges and universities. Our specialized services and expertise are delivered with close personal attention to our clients. For more information, visit www.RubinBrown.com/Colleges .

Brent Stevens, CPA, CGMA Partner-In-Charge Colleges & Universities Services Group 314.290.3428 brent.stevens@rubinbrown.com

Chester Moyer, CPA Partner Colleges & Universities Services Group 816.859.7945 chester.moyer@rubinbrown.com

Fall 2018

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