Andrew Rosen, CEO, Kaplan

Kaplan CEO Andrew Rosen spoke to Invest: about how Kaplan has evolved over time from a brick-and-mortar-based education institution to a digital model, which provides exponentially increased opportunities not only in terms of expanded business growth but also in the ways in which its students can achieve success through remote learning.

What were a few of the main highlights and key milestones for Kaplan over the last 12 months?

We experienced another year of strong growth. Kaplan is made up of a number of sub-businesses across various educational and geographic markets, and essentially, all our businesses have grown. In particular, we saw a surge in our international businesses, which offer a variety of higher education and professional programs, but the company as a whole has momentum, and we are not dependent on any one unit to drive that growth. 

We also made significant progress in key priority areas. For example, a new program called All Access provides institutions the entirety of our U.S. product suite for their students. In the last year, we made significant progress in advancing this new business model, and in the process received several national awards for innovation and partnership. We signed our first statewide contract with Illinois. Students attending all public universities and some community colleges in that state now have free access to the full range of Kaplan programs. This year, I anticipate a number of other statewide programs, reflecting major investments in workforce development on the part of the states. The data shows that this is a powerful, effective investment in those states’ future productivity and tax base. 

Generative AI has become a very meaningful tool for improving efficiencies in our business, building more effective products and services, enhancing learning outcomes, and providing additional opportunities and more convenience for students. Based on our investments in this area, we are now well-positioned to meaningfully increase the efficacy of Kaplan’s education programs. Generative AI will be a core element of education in the years to come. We have been aggressive about supplementing our human-delivered programs with deep AI capabilities.  Capabilities like 24/7 AI-driven tutoring are embedded in many of our programs already, and in the coming years, such capabilities will be pervasive across education.

How is Kaplan leveraging technological innovations to help students prepare for exams?

Though historically people physically traveled to a Kaplan location to study with us, today we consider ourselves to be a technology company. People do still come to Kaplan in person if there is a reason why a face-to-face interaction is superior to a digital one. Kaplan has brick and mortar locations worldwide, but we were an early pioneer in digital education, and the default has shifted such that students can study wherever and however it’s most convenient for them. The sheer number of tools and the technology involved behind those capabilities is staggering. 

From your perspective, what should be the value proposition of higher education in the 21st century?

Two practical and political questions that have been floating around for quite some time include what people should be educated about and how much students should have to pay. The importance of education, most agree, is only increasing as technology enables the automation of lower-skilled activities and jobs. It’s becoming essential that people add value beyond what machines will be able to do. It is incumbent upon people to become empowered by technology and not become victims of technology.

It is also important to consider if students are choosing to learn the subjects that are going to help them the most, based on what their goals are. There is an age-old question of whether education should be focused on training you to have a more successful career, or should it be focused on providing the tools to help you become a more successful person, student, citizen, parent, or community member. The best education is a blend of that, but not everyone values each aspect in the same way. At times, universities can make assumptions about what students want — and in doing so, they deliver an education that doesn’t always address the needs their students have.  

Many costs associated with higher education have nothing to do with student learning but are bundled with education — for example, clubs, sports, theater, dining, etc. That plays a big role in driving costs up. Digital education doesn’t require fancy dining halls and residence facilities; students can invest in the quality of the education without having to invest in ancillary activities that have nothing to do with learning.

What programs or service lines are driving growth, profit, and demand for Kaplan?

The demand for students in non-Western countries to study in the West is growing rapidly, though this demand is offset at times by economic issues, safety concerns, and political dynamics. Kaplan plays a key role in helping international students access degrees and programs offered by Western universities, and we see this as an important area of growth going forward.