Online Learning

2U Issues First Transparency Report

• By Dian Schaffhauser
• 12/03/20

Online program manager 2U has issued its first transparency report, which shares details of its agreements with 70 universities, all public or private nonprofit institutions that are supported to some extent by state and federal funding. The report examined practices and outcomes for six "pillars," the same ones that make up a framework for transparency the company published last year and encouraged other OPMs to adopt as well.

2U and other companies like it provide a number of services for the online degree programs they help launch and support, including marketing and recruitment; student success; career counseling; learning technology; professional development; and program management. The institutions develop the content of the classes; hire faculty; set tuition prices, admission criteria and credit requirements; and structure the degree programs. In many cases, an OPM invests in development of the degree program, which may be new for the school. In return, the agreements the company signs with colleges and universities allocate a percentage of tuition generated back to the OPM as payment for its work.

2U reported that it has invested $1.3 billion in degree programs to date, which have enrolled more than 50,000 students since its inception. That has included $19.5 million in scholarships and fellowships for students in 2U programs during 2019. The degree programs it's involved with have an 86 percent retention rate from the first term to the second one and a graduation rate of 72 percent.

On the expense side, according to the 2U report, the company's marketing and sales expense was 22 percent of the "total tuition generated" for degree programs that have been running for at least three years.

On the revenue side, an estimated 38 percent of 2U's total 2019 revenue came from Title IV loans. As the report noted, the company's degree program contracts place sole responsibility for the administration of Title IV financial aid programs and processing of requests on the universities.

"Now is the moment to push for greater transparency across the industry and demonstrate clearly that online education can deliver successful student outcomes," said 2U Co-founder and CEO Christopher "Chip" Paucek, in a press release. "We hope the release of our inaugural transparency report will encourage others in the industry to embrace greater openness and foster a higher education system that is more accessible, affordable, blended, relevant and high quality."

The 2U transparency report is openly available on the 2U website.