The U.S. Department of Education heard dozens of public comments this week on whether it should update or reverse guidance that laid the groundwork for how many colleges recruit students.
In question is a 2011 Dear Colleague letter that provided an exception to the federal incentive-compensation ban: Colleges could have revenue-share agreements with companies offering recruitment services, so long as recruitment was part of a “bundle” of other services, such as IT support and course design. This exception is widely credited for the birth of the multibillion-dollar online-program-management industry, which has helped hundreds of institutions erect online-degree programs but also attracted scrutiny for cases of deceptive and aggressive recruiting practices.
What comes out of these listening sessions matters for institutions. Revenue-share models are the most common arrangement between online-program-management companies, often referred to as OPMs, and colleges, and many institutions rely on outsourced recruitment and marketing support as they compete for a shrinking pool of students. Should the Education Department ultimately decide to alter or reverse its 2011 guidance, many colleges would need to rework their vendor contracts.
Feedback from about 70 individuals over four hours was split. Some applauded the guidance for enabling the growth of low-cost and accessible online programming, while others argued that the revenue-share models that have emerged — many of which give OPMs more than 50 percent of tuition dollars — put recruitment and financial gain over student outcomes. Here are seven key themes we heard in arguments for and against the 2011 guidance:
FOR: Low-cost options and flexibility for students.
While there are cases of pricey online-degree programs, OPM representatives said their size and expertise has helped colleges create low-cost programs that remove barriers to entry for students. The weighted-average tuition of a degree program supported by Academic Partnerships, a major OPM, is about $15,600 in total, said its senior vice president for government affairs, Adam Arguelles. A few college administrators chimed in, too; one from Eastern Michigan University cited the institution’s $10,000 online-nursing program.
A half-dozen former students, including those who’d gotten OPM-supported degrees from George Washington University and the University of Southern California, also spoke to how critical the online-learning option was for juggling their education with child care, jobs, and health issues.
“Online education, when done well, is transformative,” said Haley Scott DeMaria, who got her master’s degree in teaching at USC and is now director of admissions at an elementary school.
AGAINST: Deceptive tactics harm students and exacerbate loan debt.
Perhaps the most-cited grievance with the bundled-services exception is that it incentivizes companies to deploy deceptive and aggressive recruiting tactics — often targeting vulnerable populations, such as single parents and those who’d previously “stopped out” of a program. One former student who got a master’s in social work online through USC said he was promised a scholarship that never materialized. Another student who’d enrolled in an online doctoral program through Vanderbilt University recalled how employees of one of the nation’s largest OPMs, 2U, masqueraded as college admissions counselors, using Vanderbilt email addresses.
“You sold me a dream that may never be realized,” said Kerry O’Grady. “I’m angry ... for placing unconditional trust into a system that ultimately failed me.”
This deception, a few pointed out, can contribute to already soaring graduate-student loan debt. There are effectively no caps for graduate-school loan borrowing.
Former students who commented cited loan debt as high as $190,000. One college employee also submitted a written statement that they knew of students at their institution with debt surpassing $300,000.
FOR: Support and visibility to smaller institutions.
Multiple college administrators, most notably from small, private colleges, underscored that OPM partnerships have been crucial to the development and visibility of their online programs as they compete with larger universities in a crowded “ecosystem.”
David Lees, director of distributed learning and educational technology at La Salle University, in Philadelphia, said working with Academic Partnerships has led to “sustainable growth” in the college’s online programs, despite the competitive local market. Anne Skleder, president of Brenau University, in Gainesville, Ga., said the revenue-share model, where OPMs absorb the upfront investment and risk, is important for smaller institutions that may not otherwise have the capital or capacity.
Helen Drinan, interim president of Cabrini University, in Radnor Township, Penn., added that her institution’s recent partnership with 2U has also been the difference between “getting into expanded markets and not.”
Historically, the college has recruited “only in our local area because we have very limited marketing capacity,” Drinan said. “But we believe our high-quality, mission-driven education deserves to compete nationally.”
AGAINST: Recruiting is a bigger part of the bundle than anticipated.
A handful of speakers noted that there’s evidence to suggest that recruitment services make up a much larger chunk of colleges’ bundled services than the Education Department anticipated when it made the bundled-services exception. That reality, they argued, warrants modifying, or rescinding, the guidance.
In a cited 2022 survey from the University Professional and Continuing Education Association, for example, about 90 percent of respondents said they had “moderate” or “high” need for OPMs to provide recruiting.
2U also reported spending more than $380 million on marketing and sales in fiscal year 2022 — more than it spent on curriculum, teaching, service, support, technology, and content development combined, said Kevin Carey, vice president for education policy and knowledge management at the think tank New America.
“Marketing is not legally the same as recruitment,” Carey said, “but the two go hand-in-hand.”
FOR: Ability to respond to work force-relevant needs.
Some OPM representatives said these arrangements have allowed colleges to quickly respond to shifting work-force needs in fields such as social work, counseling, and nursing, which are seeing labor shortages.
A couple of former students spoke to how enrolling in these programs led to fruitful job prospects. A graduate of Northwestern University’s online master-of-counseling program, supported by 2U, recalled a robust, interactive experience — one that ultimately secured him a clinical placement at the family-counseling center where he now works.
“I started as a skeptic of online learning,” said Parfait Kanam, but “I wouldn’t have become a counselor without this program.”
AGAINST: ‘Corrupting’ effects on program quality.
Another repeated concern was that the bundled-services exception — and subsequent fixation on recruitment — waters down the quality of programs, be it through larger class sizes, lower admissions standards, or a lack of full-time faculty teaching these courses.
Examples included the now-shuttered Concordia University’s partnership with HotChalk, where the company reportedly instructed recruiters to approve all applicants, whether or not their grade-point averages met admission standards.
Ashley Bell, a former professor, also detailed Arcadia University’s attempt to build a hybrid physician-assistant program with 2U. She reported that while cohorts typically have between 30 and 50 students, the plan was to have 125 students per cohort.
“The quality of the program was simply not a concern to the OPM,” she said.
Suggestions for other avenues to try.
Speakers wary of the current guidance offered suggestions for updates and changes. These included:
- Embracing the fee-for-service model where colleges only pay for what they need.
- Colleges using a separate contractor (and payment model) for marketing and recruitment services.
- Enforced requirements that contractors are not involved in decision-making around things like admissions standards and program pricing.
- Requirements (and proof) that vendors’ service costs align with market rates.
- Updated guidance for accreditors on how to review these arrangements.
- Clear disclosure requirements to students regarding an OPM provider’s role in a program.
So what’s next? Those who missed the listening sessions but still wish to submit comments can do so through March 16.
The department will then “conduct a careful review of what we hear orally and in writing from the hearings before considering any further steps,” a spokesperson wrote in an email. “We are committed to ensuring that this is a thorough and fair process and doing so will take some time.”
