Key House Democratic leaders are calling again on the Education Department to withdraw 2011 guidance that allowed for revenue-sharing agreements between online program managers and institutions of higher education.
On Tuesday, Connecticut representative Rosa DeLauro, ranking member on the House Appropriations Committee; California representative Mark Takano, ranking member on the House Committee on Veterans’ Affairs; and Washington representative Pramila Jayapal, who chairs the Congressional Progressive Caucus, released a joint statement criticizing a partnership between 2U and the University of Southern California that was the subject of a recent class action filed by the Project on Predatory Student Lending. The lawsuit alleged that USC misled students in the online master of social work program. The class action suit says that students were told the program was the same as the in-person program, even though it was administered by 2U, a prominent online program manager.
That partnership, they said, was the result of federal guidance issued in 2011. Federal law prohibits institutions of higher education from providing a commission or bonuses to individuals or entities based on securing enrollment or financial aid. However, the guidance said that third parties are exempt from the ban on incentive compensation if they provide a bundled set of services.
“The flawed guidance allows for-profit OPMs like 2U to partner with colleges to aggressively recruit students into high-cost, low-value degree programs that fail to provide promised jobs,” the statement says. “These for-profit OPMs split federal student loan revenue with colleges in exchange for aggressive recruitment services and outsourced educational programming … We expect the Department to take swift action and prioritize the concerns of students and taxpayers over revenue concerns of schools and for-profit companies.”