Senate Democrats study impact of online degree programs on high student debt

WASHINGTON — Three Senate Democrats are raising concerns with companies that develop online degree programs for colleges about whether their recruiting tactics and tuition-sharing deals are contributing to high student debt loads.

Sense. Elizabeth Warren, D-Mass., Sherrod Brown, D-Ohio and Tina Smith, D-Minn., sent a letter to eight of the largest online program management companies – including 2U, Academic Partnerships and Pearson – expressing their concerns about their business practices.

“We continue to be concerned about the impact of OPM partnerships on increasing student debt load,” the senators wrote in the letter sent Friday. “Responses to our previous letters confirmed that OPMs often have tuition-sharing agreements with universities, which commit an ongoing percentage of tuition revenue to the OPM to fund start-up costs and permanent functioning of online study programs.

The tuition-sharing model, they said, “also creates incentives for aggressive recruitment practices.”

Companies often receive 50% or more of student tuition on each deal, which in turn can discourage lower costs, the senators said.

Representatives for 2U, Academic Partnerships and Pearson did not immediately respond to requests for comment.

Millions of student financial aid dollars are spent on online degree programs every year. But there is no consistent public disclosure of how many of those dollars are spent on recruiting, advertising and profit, rather than instruction.

The senators first questioned the companies in a previous letter sent last January. Since then, the Covid pandemic has dramatically increased the need for online education, the senators said in a statement.

In recent months, student loan advocates and some congressional Democrats, including Warren, have continued to press the Biden administration to cancel student debt and provide greater financial aid amid the pandemic. . More than 44 million Americans owe about $1.7 trillion in student debt.

In December, the administration announced that a moratorium on federal student loan repayments would be extended through May 1 due to rising cases of the highly transmissible omicron variant of Covid.

In the letter, the senators asked the companies for information on the scale and logistics of online program operations and tuition-sharing agreements, the demographics of the students they serve, a breakdown of their expenses, as well as their use of federal assistance, by no later than January 28.

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