Hard Lessons for The Washington Post Co.

The Washington Post has relied on its lucrative education unit, Kaplan, to compensate for significant drops in newspaper income. After Kaplan entered the for-profit education industry in 2000, expanded federal financial aid for students fueled the division’s upward momentum.

Eleven years ago, one of Washington’s most tradition-bound companies placed a bet that would transform its fortunes, according to a story by Steven Mufson and Jias Lynn Yang at The Washington Post.

The wager, by The Washington Post Co. and its Kaplan division, took the form of a $165 million purchase of an Atlanta-based chain of for-profit vocational schools that catered to low-income students.

The bet was big — the price equal to the profits earned that year by The Post Co.’s print-media pillars: this newspaper and Newsweek magazine. So was the payoff.

The acquisition of the firm, called Quest Education, turbocharged the rise of Kaplan, a modest business that had until then mainly prepared students for standardized tests.

Today, Kaplan is a multinational, multibillion-dollar enterprise with 70 campuses and nearly 100,000 students, many of them online, many of them reliant on government aid. This newspaper, meanwhile, has struggled to remain profitable amid dramatic changes in the news industry. Newsweek was sold. The Post Co. now calls itself an education and media company — no longer the other way around.

But what proved a deftly timed business move brought other, less welcome scrutiny to a family-run company that had long prided itself in serving the public interest.

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