05.05.22

Murray, Colleagues Release Report Highlighting Need to Ensure Companies Managing Colleges’ Online Programs Aren’t Violating Ban on Abusive Recruiting Practices

(Washington, D.C.) – Today, U.S. Senators Patty Murray (D-WA), Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Tina Smith (D-MN), Sherrod Brown (D-OH), Elizabeth Warren (D-MA), and U.S. Representative Bobby Scott (D-VA-03), Chairman of the House Education and Labor Committee, released a new report from the Government Accountability Office (GAO) highlighting the need for the Department of Education to collect more data to ensure online program managers (OPMs)—third-party companies that help colleges run and recruit students for online academic programs—aren’t violating the Higher Education Act’s ban on abusive recruiting practices.

 

“With so many for-profit companies helping run—and recruit students for—colleges’ online education programs, we must make sure students are protected. We need to know more about these arrangements and make sure these companies are working to lower, not raise, costs for students,” said Senator Murray. “This report makes clear the Biden administration needs to conduct proper oversight to protect students, prevent abusive recruiting practices, and improve transparency of these business arrangements—and I’m glad they are committed to taking action.”

 

“Students should have complete and unbiased information when making key decisions about their higher education. Unfortunately, this GAO report confirms that our higher education system lacks adequate oversight of online program managers, which are hired by institutions to help with student recruitment and marketing, among other services, in exchange for substantial portions of a student’s tuition payments. Without this oversight and transparency, our guardrails to prevent abusive recruiting practices—and to ensure students know the entities involved in and profiting from their education—are insufficient,” said Chairman Robert C. “Bobby” Scott (VA-03), House Committee on Education and Labor. “As we recover from the pandemic and seek to restore faith in the value of higher education, the Education Department must make sure that institutions are transparent with students and comply with the incentive compensation ban. I will continue working to ensure that every student has the complete information they need to access a high-quality education.”

 

“I’m concerned about the impact of OPM partnerships on the cost of college. While the demand for online education has increased at colleges and universities especially due to the COVID-19 pandemic, the business arrangements between these companies and institutions raise many questions about costs and incentives. This report confirms these concerns are warranted, as there’s been a serious lack of effective oversight while these arrangements have proliferated. The U.S. Department of Education needs to take a much closer look at this issue, OPM business practices, recruitment tactics, and ultimately the costs borne by students,” said Senator Smith.

 

“Students shouldn’t have to worry that their degree is being used to pad someone else’s pockets. The Department of Education has a responsibility to prevent schools and their online program managers from arrangements that lead to abusive recruiting practices—especially for-profit institutions, which have a history of cheating students into worthless degrees and leaving them drowning in debt. This report details the steps we must take to strengthen transparency and improve data collection to protect students,” said Senator Brown.

  

The report found that existing Department of Education policies do not ensure the Department has the information it needs about colleges’ arrangements with OPMs to conduct oversight and make sure OPMs are not engaging in abusive recruiting practices. OPMs often provide recruitment services for colleges and receive a cut of the tuition revenue when they enroll students—raising questions about their compliance with the Higher Education Act’s prohibition on incentive compensation. As of July 2021, at least 550 colleges worked with an OPM to help run at least 2,900 education programs—a marked increase in recent years—but because of gaps in data collection, the exact number of arrangements is unknown. The GAO report recommends the Department take steps to ensure it collects data on all agreements colleges have with OPMs to prevent abusive recruitment practices.

 

Read the full GAO report HERE.

 

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