“I’ll tell you a funny story,” said Mitch Daniels, the president of Purdue University. It was the day before the first home football game of the season and he was sitting in his corner office, overlooking the postcard-perfect quad.
“So the cost of a year of undergraduate college at Purdue University, tuition and fees, is $9,992. I’m proud of that number.
“One day I’m looking at one of those college guides, and it said, ‘Tuition and fees: $10,002.’ I called up our people and said, ‘Lookit here, there’s a mistake. You got the wrong number.’ They said, ‘That’s not a mistake.’ I said, ‘Yes, it is. Believe me. I know.’ They went back and checked and they said, ‘No, that’s the right figure.’
“It just bugged me to death. Does Walmart have a special and price it at $10.02? I found out what happened. There’s a second installment on a preexisting gym fee that got tacked on. Ten dollars plus $9,992 equals $10,002.
“Next time I’m at the gym, I ask the guy who runs it, ‘How’s it going here?’ He said, ‘Membership’s up; we’re doing well, making a little profit.’ I thought, Okay, that’s all I needed to know. And the next meeting of the board of trustees, they repealed that fee.
“So now we’re back to $9,992,” he said. There was both self-deprecation and a note of triumph in his chuckle. “I don’t know why it bugged me so much, but it did.”
He may not know why, but I do, and so does everybody who’s followed Daniels in his nearly 20-year public career. He is notoriously tight with a dollar. Friends recall that as a beginning golfer, he played with a garden glove he already had instead of a store-bought, $3 golf glove. His parsimonious nature, when applied to public matters, is one reason he received more votes than any other officeholder in Indiana history in 2008, when he won reelection as governor, and it’s why he and his university—a 150-year-old land-grant school in West Lafayette, Indiana—are objects of curiosity and even wonderment in the world of higher education.
Most of the attention centers on that all-important number, 9,992. Not only is that the dollar amount an in-state student will pay Purdue for tuition and fees next year; it is also the amount such a student paid Purdue when Daniels became university president, in 2013. The university has also reduced the price of food services and textbooks. An undergraduate degree from Purdue, in other words, is less expensive today than it was when Daniels arrived.
Only when seen against the inflationary helix of American higher education can the singularity of this achievement be fully appreciated. The college-affordability crisis has become a staple of academic chin pulls, news stories, congressional hearings, and popular books written in tones of alarm and commiseration. From 2007 to 2017, the average annual cost of a degree at a four-year public university like Purdue rose from about $15,000 to more than $19,000—a jump of 28 percent after taking inflation into account. Only health care rivals higher education as an economic sector so consumed by irrational inefficiencies and runaway prices.
The consequences are plain. Students and their parents have acquired debt totaling more than $1.5 trillion, more than all credit-card debt held in the U.S., and sufficiently large, according to the Federal Reserve, to be a drag on the economy. Roughly 70 percent of college students take out loans to finance their education. The average undergraduate leaves school more than $25,000 in debt.
At Purdue, by contrast, nearly 60 percent of undergrads leave school without any debt at all.
So how did Purdue do it?
“I always say it’s easier to explain what we didn’t do,” Daniels told me. “We didn’t try to get more money from the state. We didn’t shift from full-time faculty and fill the ranks with cheaper, part-time adjunct faculty. We haven’t driven up our percentage of international or out-of-state students,” who pay more than in-staters. Each of these measures has been taken up by other public universities, even as most have increased their in-state tuition.
Proud as he is of his number, Daniels worries that all the attention paid to the tuition freeze scants the improvements that the school says it has simultaneously made in educational quality and financial health.
Increased enrollment since the freeze has brought in an extra $100 million, reckons Chris Ruhl, the university’s treasurer and chief financial officer. The benefits of the improved balance sheet can be seen across campus. According to the university’s figures, Purdue’s full-time faculty at all levels has increased, resulting in a student-teacher ratio of 13 to 1, compared with the Big Ten average of more than 15 to 1. Faculty pay is up too. The salary of a full-time professor at Purdue has increased by 12 percent over the past five years, against a conference-average increase of 7 percent.
Meanwhile, a visitor can’t help but notice that large stretches of Purdue’s campus are construction sites: for new research facilities; new residence halls; a learning center the size of a power plant, which is what stood in its place until six years ago. Applications for admission are up 37 percent.
Tuition increases were once a fact of life at Purdue. The chair of the board of trustees, Michael Berghoff, recalls his first meeting as a trustee, more than a decade ago, during which the school’s annual tuition hike came up: “Most discussions were about how much, very little about whether it was necessary.”
A few years later, the board offered Daniels the presidency—a controversial choice, Berghoff told me, owing to Daniels’s lack of academic experience beyond his Princeton undergraduate degree and law degree from Georgetown. During his eight years as governor, Daniels had become famous for his penny-pinching, as he had in his previous job directing President George W. Bush’s budget office. Bush nicknamed him “The Blade.” On the day when representatives of government agencies came to pick up their copies of the annual federal budget, Daniels played the Rolling Stones’ “You Can’t Always Get What You Want” over the loudspeaker. As governor, in his effort to balance the budget and pile up a surplus, he devised a host of economizing measures, including printing all state documents in the narrowest font he could find to save on paper and ink. “No saving is too small to disregard,” he said then and says now.
So Berghoff wasn’t completely surprised when Daniels, at his first trustee meeting, floated the idea of a tuition freeze. “I thought it would be a one-off, just to send a message that we could break this long, long run of increases,” Daniels told me. “It turned out we could do it a second year, then the third. Then it became the thing we’re known for.”
In Indianapolis, Daniels’s administration was known for selecting successful businesspeople and placing them across state government. He’s done the same at Purdue. Michael B. Cline, the former head of the state’s transportation department, is now running Purdue’s administrative operations, and Ruhl, the former state budget director, is now the university’s CFO and treasurer.
What they described to me could be a new model—a change in the culture—of finance in higher education, bringing market pressures to bear on processes that had never faced them before. Savings came, Daniels said, “from a couple of big things, and lots of little things.” Low-hanging fruit was plucked early: The residence halls, which housed young people who all owned cellphones, still used landlines, so they were quickly removed. Payroll, which incredibly was still using paper time sheets, was digitized. Food service was centralized.
Daniels also addressed complaints from students and faculty about the price of textbooks. After six months of weighing options, Purdue struck a deal with Amazon to provide textbooks, saving students 30 percent on average and more than $2 million in the first few years, according to the school. The arrangement lapsed recently, but Amazon’s first brick-and-mortar store is still on campus, and textbook costs remain lower than before.
And so a virtuous circle was established, according to Purdue and its president. The predictably flat tuition attracted more students, creating a larger student body that brought in increased revenue, which allowed for the hiring of more and higher-quality faculty, whose research the university could profitably license to the private sector, where alumni, delighted at the celebrated achievements of their alma mater, helped increase donations by 136 percent over six years, which in turn has helped keep the freeze in place.
While Daniels’s approach wins mostly praise on campus, David Sanders, a biological-sciences professor and frequent critic of Daniels’s policies, told me he hears quiet grumbles. “The freeze is a marvelous admissions marketing tool,” Sanders said. But the surge in enrollment “puts a lot of stresses on the city and the campus.” In his own department of biological sciences, despite the campuswide improvement in the student-teacher ratio, “introductory-class sizes are much larger,” requiring more students to monitor lectures remotely. And as resources get reallocated, “there’s far more competition between faculty and between departments,” he said. “The institution is less collegial.” (Most faculty members contacted for this story declined to comment.)
However widely these misgivings are shared, no one denies that the freeze and the other innovations have set Purdue in a new direction, one much more in keeping with Daniels’s brand of populism.
“When I got here,” he told me, “there was an effort to become the ‘Stanford of the Midwest,’ an elite institution along those lines,” which would have meant shrinking enrollment, cutting out kids at the low end of the class to skew the average toward the top.
Daniels speaks frequently of Purdue’s mission as a land-grant school, chartered under Civil War–era legislation that helped establish colleges devoted to teaching agriculture, engineering, and other practical arts to the children of prairie pioneers. “We were put here to democratize higher education,” he said.
The number of domestic undergraduate “underrepresented minorities” at Purdue (URMs, in the acronym-happy world of college admissions) grew from 2,483 in 2012 to 3,461 in 2019. Yet as the student body has also grown, the percentage of URMs among undergraduates has remained about 10 percent—while black and Latino students alone account for 36 percent of the U.S. college-age population.
Daniels expresses frustration at the relative lack of progress. A few years ago, he got the idea for the university to sponsor high schools in Indiana’s largest cities. “We realized we had to build our own pipeline if we wanted to recruit minorities and poor kids,” he said. “We couldn’t wait on the public high schools to catch up to us.” The original Purdue Polytechnic High School, in Indianapolis, will graduate its first class, of 115 kids, in 2021. “My dream is that we can slip a Purdue scholarship in with each diploma,” he said.
Even so, Daniels hasn’t escaped the controversies that attend diversity issues in higher education. Last November, Purdue’s student newspaper released audio of Daniels discussing faculty hiring with a group of mostly minority students. “At the end of this week,” he told them, “I’ll be recruiting one of the rarest creatures in America—a leading, I mean a really leading, African American scholar.”
Social media erupted. The hashtag #IAmNOTACreature took off on Twitter. D’Yan Berry, the president of Purdue’s Black Student Union, wrote that she was “disappointed but not at all surprised by his reference … to Black students as creatures. It afflicts me that this is how he speaks even when ‘boasting’ on students.”
After complaining that his figure of speech had been misinterpreted, Daniels took two weeks to issue an apology. “The word in question was ill chosen and imprecise and, in retrospect, too capable of being misunderstood,” Daniels wrote. “I accept accountability for the poor judgment involved.”
Beyond the new Purdue-run high schools, the other great populist initiative of Daniels’s tenure—and perhaps the most controversial—is the purchase, for $1, of the for-profit, mostly online Kaplan University, from the Washington, D.C., businessman Donald Graham, in 2017. Overnight, Purdue Global, as it’s now called, brought approximately 30,000 online students, most of them part-time, into Purdue’s orbit and made the school one of the largest online educators in higher ed.
Daniels had long thought that online education would be crucial to expanding the school’s mission of accessibility, but the idea of building the infrastructure from scratch was daunting. The purchase of Kaplan U solved the problem. Kaplan—best known for its test-prep service—continues to provide back-end and marketing services for Purdue Global in return for a percentage of revenue.
Daniels presented the Kaplan deal to the Purdue community as a fait accompli; the trustees quickly approved it. Reaction ranged from surprise to puzzlement to deep skepticism. Foremost was the worry about commingling the operations of a public university with a for-profit business. “It’s an attempt to inject free-market principles into public education,” says Bill Mullen, an American-studies professor. It’s “a way of blurring the lines between public and private. There’s less of an appreciation for higher education as a public good.”
But Daniels appears unfazed by the criticism, and the larger Purdue community seems quite happy with the way the institution has grown in size and reputation. As it happens, Graham visited the campus last September, and we tagged along as Daniels snaked his way through the stadium parking lot, choked with tailgaters fussing over grills the size of Ping-Pong tables. Young and old greeted him like a rock star—a short, balding rock star. No one called him by his title or his last name. Mitch!
A grill master in a Purdue apron, Purdue sweatshirt, and Purdue cap saw me scribbling and offered a comment. His name was Chuck, he said. He was from Greencastle, and his two kids had gone to Purdue. “This man here,” he said, pointing at Daniels, who was grinning for an endless line of selfies, “saved me thousands of dollars.”
By the time we had crossed the parking lot, half an hour later, Don Graham was beaming from his trip through the delighted scrum of parents and students and alumni.
“These people love you, Mitch!”
Daniels shrugged but was clearly pleased.
“Well,” he said, “they know it’s reciprocated.”
This article appears in the April 2020 print edition with the headline “Tight With a Dollar.”