Three U.S. senators sent a letter Friday to companies that develop online degree programs for universities, raising concerns about aggressive student-recruiting tactics and other policies that they said might contribute to rising college debt levels.
The senators—Elizabeth Warren (D., Mass.), Sherrod Brown (D., Ohio), and Tina Smith (D., Minn.)—wrote to eight online-program management companies, including 2U Inc., whose relationship with the University of Southern California’s social work school was the subject of a Wall Street...
Three U.S. senators sent a letter Friday to companies that develop online degree programs for universities, raising concerns about aggressive student-recruiting tactics and other policies that they said might contribute to rising college debt levels.
The senators—Elizabeth Warren (D., Mass.), Sherrod Brown (D., Ohio), and Tina Smith (D., Minn.)—wrote to eight online-program management companies, including 2U Inc., whose relationship with the University of Southern California’s social work school was the subject of a Wall Street Journal investigation published in November.
The lawmakers asked whether deals in which universities sometimes share 50% or more of tuition revenue with the companies may motivate the schools to keep student costs high and recruit aggressively.
The letter cited the Journal’s reporting, including its finding that 2U recruiters working for USC frequently called and emailed prospective applicants to woo them to enroll in a two-year online master’s program in social work that currently costs about $115,000. The company at the time said admissions decisions lie with the school.
Recent USC social work graduates who borrowed federal loans took out a median $112,000 yet earned a median $52,000 two years after finishing school, the Journal found. Many who enrolled came from low-income backgrounds.
“We continue to have concerns about the impact of OPM partnerships on rising student debt loads,” the senators wrote in the letter. “Although millions of dollars in federal student aid go to online degree programs every year, there is no consistent public disclosure of how many of those dollars are directed to recruiting, advertising, and profit, rather than instruction.”
The Journal recently reported on how graduate degrees have evolved into massive revenue streams for universities, even some of the nation’s wealthiest nonprofit ones. Partnerships with for-profit online education companies have expanded rapidly over the past decade, allowing colleges to offer more graduate programs as well as other degrees and certificates—often without cutting tuition. The partnerships have been controversial, pitting school officials who say the programs often lower standards against those who say they make it easier for students from diverse backgrounds to earn degrees.
Sen. Smith said in a statement that “these unconscionable practices harm students and taxpayers, and subvert the concept of higher education as a public good. And we have to hold colleges accountable for these practices.”
A spokeswoman for 2U said the company, which acquired nonprofit education company edX last year, is committed to transparency. “We welcome continued discussion with the senators about the important role that 2U and edX play in making high-quality online higher education more accessible and affordable,” she said.
The letters follow a previous inquiry to the leaders of online companies in January 2020. Over the past two years, the pandemic has fueled the growth of online degrees. The number of partnerships between online-program management companies and colleges has grown from about 200 in January 2020 to roughly 367 by the end of 2021, according to the letter.
The senators are asking the online companies to disclose more information about their tuition-sharing agreements, their use of federal student loans dollars, and the demographic breakdown of recruited students, among other questions, by Jan. 28.
Write to Andrea Fuller at andrea.fuller@wsj.com and Lisa Bannon at lisa.bannon@wsj.com
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