January 24, 2020

Senators Warren and Brown Examine Questionable Business Practices of Largest Managers of Online Degree Programs

Aggressive and Deceptive Recruiting Tactics Similar to Those Used by For-Profit Colleges May Undermine Best Interests of Students


Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.), a member of the U.S. Senate Committee on Health, Education, Labor and Pensions, and Senator Sherrod Brown (D-Ohio) wrote to the five largest Online Program Management (OPM) companies – 2U, Academic Partnerships, Pearson Learning, Wiley, and Bisk – that administer online degree programs for many colleges and universities, raising concerns about their business practices that appear to undermine the best interests of students, and inquiring about their contracts and use of federal student aid dollars.
 
Colleges and universities often enter into contracts with for-profit OPM companies to administer their online academic programs, but OPM companies can also charge colleges and universities for a variety of non-academic services, like recruitment and admissions services. OPM contracts often stipulate that the college or university must pay most of the tuition revenue from students enrolled in their online programs to the OPM. Because these contracts often delegate recruitment responsibilities to the OPM, this tuition-sharing arrangement may violate federal law, which prohibits colleges and universities from paying commissions for recruiting and enrolling new students.
 
Available evidence suggests that tuition-sharing arrangements in OPM contracts create perverse incentives that lead to aggressive and deceptive recruiting practices, similar to those that pervade the for-profit college industry. For instance, basic information about the program, including cost, schedule, or admissions policies, may not be available to prospective students until they provide their contact information to the OPM, which the OPM company can then use for aggressive follow-up calls and text messages. An analysis of OPM contract terms found that tuition-sharing contracts often include provisions that prevent colleges and universities from making any changes that would lower revenue, which inflates college costs for students. Because colleges and universities often do not disclose whether an OPM is administering certain programs or advertising and recruiting on their behalf, students often have few ways to know whether their online degree program is affected by these troubling practices.
 
“As the influence of this small handful of companies on the American higher education system has exploded, there is an increasing need for transparency to ensure that students and policy-makers are able to make informed decisions,” wrote the senators in their letters. “It is also critical that policy-makers determine if OPM business practices—specifically OPM contracts that require tuition-sharing arrangements—are legal, an appropriate use of federal student aid dollars, and in the best interest of students.”
 
The lawmakers have requested that each OPM respond to questions outlined in their letter no later than February 21, 2020.
 
Senator Warren has been a champion for students throughout the Senate, fighting to create more opportunities for young people and protect America's students from predatory for-profit colleges:

  • She conducted rigorous oversight of the for-profit college industry and helped secure three-quarters of a billion dollars in debt relief for students who were cheated by predatory for-profit colleges, including 4,500 Massachusetts students and more than 28,000 students across the country.
  • Senator Warren, the late Congressman Elijah E. Cummings (D-Md.), then-Chairman of the House Committee on Oversight and Reform, and Congresswoman Suzanne Bonamici (D-Ore.) also opened an investigation into the sudden collapse of Education Corporation of America (ECA), a for-profit college that received a stamp of approval from the Accrediting Council for Independent Colleges and Schools (ACICS). The information that their investigation uncovered led the Department of Education’s Office of the Inspector General, in December 2018, to open an investigation into Secretary DeVos's decision to reinstate ACICS.
    • When President Trump then abruptly dismissed the ED's acting inspector general, Senator Warren called him out. The Trump administration back-tracked hours later.
    • Since then, Senator Warren has led her colleagues in calling on ECA regarding attempts to collect outstanding accounts receivable and other financial obligations from ECA's former students.

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