by Bloomberg News

How do you turn a for-profit college into a not-for-profit? Partner with a public university—and pay $50 million for the privilege.

That’s basically what happened on Thursday, in a financial deal between the for-profit Kaplan higher-education chain and Purdue University, the flagship Indiana college run by Mitch Daniels, the state’s former governor.

The arrangement may help Kaplan parent Graham Holdings Inc. shed the for-profit education sector’s tarnished reputation. Purdue—paying Graham only a symbolic $1—immediately enters the ranks of public universities expanding their reach with online degrees targeting older Americans—many of them minorities—who are unable to attend traditional schools.