The Trials of Kaplan -- and the education of The Washington Post Co.

Steven Mufson and Jia Lynn Yang:

As damaging as the new rules could be, Kaplan is also reeling from a storm of criticism of the industry's practices and of The Post Co., an institution more accustomed to publishing news of others' foibles.

The company was snared in a government sting that found Kaplan employees pushing students to take on loans without regard to whether they could afford them. It has been hammered by congressional critics, sideswiped by hedge fund investors and investigated by journalists. In the end, The Post Co. reluctantly conceded it would have to revamp Kaplan's business model and turn away many prospective low-income students it once wooed.

The challenges have never jeopardized The Post Co.'s survival, but they cast a spotlight on management decisions and raise a question: How did The Post Co. end up here?

Post Co. executives blame outside forces, including a drop in political support for private-sector education companies and "financial and corporate agendas." They also acknowledge missteps. Current and past officers say The Post Co. did not keep close-enough tabs on its fast-sprawling education unit, even as it focused heavily on customers who were poorer and thus at the riskier end of the business. But they say serving that disadvantaged population is important.

Posted by Jim Zellmer at April 11, 2011 1:05 AM
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