Misrepresentations by OPMs could land colleges in trouble, Education Department says

Misrepresentations by OPMs could land colleges in trouble, Education Department says

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Colleges could lose access to federal financial aid or face penalties if their external service providers mislead their students, the U.S. Department of Education said Tuesday. 

That includes companies that help colleges launch and run online programs. Employees of online program managers, or OPMs, cannot represent themselves as working directly for colleges, including by having email addresses or signatures implying they’re employed by those institutions, according to the guidance. 

OPM employees are also not allowed to represent a virtual program as equivalent to a college’s campus-based version if they have dissimilar admissions criteria, completion rates, faculty qualifications or other substantive differences. And workers in recruiting or sales roles can’t call themselves an “academic counselor” or use a similar title if it doesn’t accurately describe their position. 

The guidance — issued in the waning days of the Biden administration — aims to add more oversight to colleges’ relationships with OPMs. Student advocacy groups have long called for stricter rules for these companies, which often help colleges launch online programs in exchange for a significant cut of their tuition revenue.

Carolyn Fast, director of higher education policy at The Century Foundation, a left-leaning think tank, praised the letter Wednesday. 

“Today’s move by the Department of Education is a step in the right direction, affirming what we already know: OPMs commonly mislead students about the quality of their online programs and that is illegal,” Fast said in a statement. “This action will deter misconduct by OPMs and their college partners and will help protect online college students from the risks posed by predatory OPMs.”

What led to the guidance?

The guidance comes after the Biden administration’s other plans to add oversight to the OPM industry faltered. 

In early 2023, the administration said it would review guidance that allows colleges to enter tuition-sharing deals with OPMs that provide recruiting help — so long as it is part of a larger bundle of services. Despite asking for public comment on the matter, the Education Department has not updated or rescinded the 2011 guidance.

At the same time it announced the review, the administration issued separate guidance that would designate OPMs and other organizations as third-party servicers. The change would have subjected them to regulations that would give the department insight into their contracts with colleges. 

However, the Education Department quickly delayed the guidance — and eventually rescinded it altogether — amid widespread criticism that it would create burdensome requirements for the higher education sector. 

“We finally have clarity, in the last days of the administration, what they’re actually going to do with the guidance around [third-party servicers]” and OPMs, said Phil Hill, an ed tech consultant. “It’s just been this soap opera for 2 1/2 years now.”

However, Hill described Tuesday’s guidance as “petulant rulemaking” from the Biden administration. 

“This Dear Colleague letter is attempting to go down to the level of telling colleges and universities and vendors what words are allowable and what aren’t,” Hill said. “And this went through zero process, zero attempt to get input from schools.”

That includes whether the guidance will hamstring colleges from running online programs or whether the policies address the issues they’re trying to solve, Hill said. 

Stephanie Hall, senior director for higher education policy at the Center for American Progress, a left-leaning think tank, took a different stance. 

The Education Department received a “treasure trove of comments” when it sought public input in 2023 on policies that would have impacted the OPM sector, Hall argued. 

“A lot was given over the past couple of years, and I see this guidance letter as just an extension or a conclusion of that process and not something new that didn’t take any input,” Hall said. 

Whether the Trump administration will enforce the new guidance is another matter. But Hall said the guidance is likely to create changes either way. 

“Schools are put on notice,” Hall said. “It’s something they take very seriously.” 

The incoming Trump administration could also rescind the guidance altogether, though it’s unclear if OPM oversight is a priority issue to incoming officials. 

“Are they aware of the impact this could have on online education, and is this going to be on their radars to take action and just immediately get rid of it?” Hill said. 

The guidance could also draw legal challenges. The Biden administration’s now-rescinded 2023 guidance sparked a lawsuit from 2U, a prominent OPM. 

“This is just waiting for a rescission or a lawsuit,” he said. 

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