I read the Martin Center’s recent report, “Charting a Better Collegiate & Workforce Education Course,” with interest. As a longtime higher-education reformer, I share the Martin Center’s sense of urgency to improve postsecondary education through innovations that lower costs and improve outcomes. However, as CEO of Project Kitty Hawk (PKH)—the subject of the report—I found the analysis incomplete at best. While I spoke openly with author Jenna Robinson at length about the lessons learned from PKH during her research, little of that conversation is reflected in the final report.
Established by the General Assembly in the 2021 budget, Project Kitty Hawk was created to accelerate progress toward our state’s attainment goal: By 2030, two million North Carolinians will have completed a postsecondary degree or credential. PKH is a nonprofit startup affiliated with the UNC System with a mission to create pathways for working adults to earn degrees or credentials from North Carolina’s public universities. To date, PKH has partnered with four UNC universities to bring 18 online bachelor’s programs (and one graduate program) to market and enroll over 3,000 students. Persistence rates in PKH-supported programs are high, with more than 90 percent of students returning for subsequent terms.
Robinson’s paper criticizes the General Assembly’s decision to create this nonprofit startup, arguing that alternative approaches such as for-profit online program managers (OPMs) or acquiring a for-profit university could have fulfilled this mission. To be sure, PKH represents a unique approach to educating working adults at scale, and, as the report notes, that approach has evolved in response to regulatory uncertainty and subsequent changes to the business model.
But the report’s central thesis ignores a critical reality: PKH exists precisely because the OPM market has shown little interest in solving the problem PKH was created to address. PKH is not competing with OPMs; we are serving a segment they have consistently overlooked.
Why? Because OPMs have historically focused almost exclusively on high-priced graduate programs, not undergraduate degrees. Undergraduate programs require significant investment and support for adult learners while generating far less tuition revenue. Prospective undergraduate students arrive with complex academic histories involving multiple transcripts and careful credit articulation, and these adults often need more academic support and coaching than a traditional-age student. Translation: higher costs, less revenue, and less margin for shareholders.
Online graduate programs, by contrast, thrived for years on unlimited federal borrowing (thankfully ended by the One Big Beautiful Bill Act) and require less student support. In the few cases where OPMs support bachelor’s programs, they are targeted at a handful of fields, particularly registered nursing to bachelor of science in nursing (RN to BSN) programs—and that market has begun to tighten dramatically due to changes in nursing salaries.
This is why, outside of a handful of exceptions highlighted selectively in the report, the mythical “zero up-front cost” partnerships praised by Robinson primarily exist for expensive graduate programs. As a regular reader, it was surprising to see the Martin Center champion expensive online master’s degrees fueled by unlimited federal loans—some of which have been sued for making fraudulent rankings claims or misleading employment promises. And, whatever your views of traditional OPMs, the market has spoken: A spate of high-profile bankruptcies, sales, and divestment of OPM units by large firms has led observers to use phrases like “fallen off a cliff” and “on life support” to describe the future of for-profit OPMs.
The report also cites Purdue Global as a model for our state to emulate. Here again the report misses some key facts. While the headlines at the time claimed Purdue (the public university) acquired for-profit Kaplan University for one dollar, the venture is actually an ongoing business relationship between Purdue Global and Kaplan Higher Education. Under a 30-year contract, Purdue Global will pay Kaplan substantial fees for marketing, student recruitment, and financial-aid administration—$239 million since inception. Purdue Global is obligated to pay these fees before Purdue University receives any tuition revenue. The project lost $83 million in its first three years; after eight years (2025), those losses sit at $71 million. While Purdue Global’s financial health is improving, its net financial position remains negative. Outside of cash payments that Kaplan agreed to pay Purdue University directly to close the deal, a fall 2025 examination found that “Purdue’s main campus has yet to receive revenue from its online school.”
In contrast, PKH’s “Flight Path” programs offered by North Carolina Central, ECU, and Appalachian State have already generated nearly $20 million in tuition and fee revenue for the universities, with that number projected to reach $35 million by the end of FY26. PKH itself has charted a path to reach financial sustainability by 2028-29—about five years after launching its first degree program and more quickly than the target date cited in the report (2031).
To be clear, none of this means Purdue Global has “failed.” It has expanded access for adult learners and increased retention and graduation compared to its predecessor Kaplan University. The partnership may succeed over time on the same measuring stick Robinson uses to judge PKH. That would be a positive outcome for Indiana’s adult learners and for the state. But, in citing the model as a better option, the report ignores the fact that Purdue Global has been operating five years longer than PKH and still runs at a loss. Policymakers deserve the full story, not selective praise that omits key facts.
Innovation in higher education is hard work. It is also more critical than ever to the health of our economy and the success of our citizens. As advances in technology continue to shift and disrupt the labor market, the state’s investment in PKH ensures that working adults will have affordable, flexible pathways to education and training at our public universities now and in the future.
I welcome continued discussion on how we can best serve adult learners and strengthen North Carolina’s workforce and appreciate the Martin Center’s willingness to post this response.
-Andrew Kelly, president & CEO, Project Kitty Hawk
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