Democratic senators probe whether online degree programs contribute to high student debt

Three U.S. senators sent a letter on Friday to companies that develop online degree programs for colleges, raising concerns about aggressive student recruitment tactics and other policies they say could contribute to increasing 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 the relationship with the University of Southern California School of Social Work was the subject of a Wall Street Journal investigation published in November.

Lawmakers have questioned whether deals in which universities sometimes share 50% or more of tuition revenue with corporations can motivate schools to keep student costs high and recruit aggressively.

The letter cited reports from the Journal, including its conclusion that 2U recruiters working for USC frequently called and emailed potential candidates to entice them to enroll in a two-year online master’s degree in social work program that currently costs around $115,000. The society at the time said admissions decisions were up to the school.

Recent USC social work graduates who took federal loans took out a median of $112,000 but earned a median of $52,000 two years after graduating, according to the Journal. Many of those who signed up came from low-income backgrounds.

“We continue to be concerned about the impact of OPM partnerships on increasing student debt load,” the senators wrote in the letter. “Although millions of federal student aid dollars are spent on online degree programs each year, there is no consistent public disclosure of how many of those dollars are spent on recruiting, advertising and for profit, rather than for instruction.”

The Journal recently reported on how graduate degrees have evolved into massive revenue streams for universities, even some of the wealthiest nonprofits in the country. Partnerships with for-profit online education companies have grown rapidly over the past decade, allowing colleges to offer more graduate programs as well as other degrees and certificates, often without reducing fees. tuition fees. 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.

Senator Smith said in a statement that “these impermissible practices harm students and taxpayers and subvert the concept of higher education as a public good. And we need to hold colleges accountable for these practices.

A 2U spokeswoman said the company, which acquired nonprofit education company edX last year, is committed to transparency. “We welcome continued discussions with 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 survey of online business leaders 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 about 367 by the end of 2021, according to the letter.

Senators are asking online companies to disclose more information about their tuition-sharing agreements, their use of federal student loan money and the demographic breakdown of recruited students, among other issues, by 28 January.

The new student debt crisis

Write to Andrea Fuller at [email protected] and Lisa Bannon at [email protected]

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Appeared in the January 15, 2022 print edition as “Senators Probe Online Degrees”.

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