2U Calls for Transparency in Online Program Management

• By Dian Schaffhauser
• 09/12/19

Even as the Century Foundation was doing its best to damn the practices of online program managers (OPMs) that work with colleges and universities to deliver online courses and programs, OPM pioneer 2U sought proactively to counter the report's punch by calling for greater visibility in online program management with a new "Framework for Transparency."

The 2U framework touched on several areas:

• University oversight and accountability, and specifically "greater clarity on the independence and control of nonprofit institutions."
• Marketplace openness: The framework advised OPMs to "publicly disclose the existence and nature of its university relationships," whether the agreement encompassed a tuition revenue share or a fee-for-service contract.
• Data: 2U called for OPMs to disclose aggregated data on enrollees, including gender, race, age, geographic location and military status.
• Pricing: The framework called for OPMs to be "more transparent about tuition pricing of degree and non-degree offerings and their total investment scholarships."
• Quality measures, such as student satisfaction ratings, and outcomes, including average retention and graduation rates.

However, what the Framework didn't touch on were some of the more damaging aspects exposed in the Century Foundation's analysis of some 79 contracts between public institutions and third-party OPMs, such as the amounts of revenue share or service fees going to the OPMs or the length and cancellation terms of the contracts signed.

2U Co-founder and CEO Christopher "Chip" Paucek called on other OPMs to adopt the framework. "Providing greater transparency around our partnerships is the right thing to do and will foster a more constructive dialogue about the value of OPMs," he said in a statement.

2U received its share of unwanted attention earlier this summer when the Los Angeles Times reported on the company's agreements with the University of Southern California. In 2009 and 2010, 2U helped USC launch an online master's program for its once highly-rated School of Social Work.

As the LA Times noted, USC gave 2U control over marketing and recruiting based on a 60-percent revenue sharing agreement. "Enrollment exploded," increasing from 900 in 2010 to 3,500 in 2016 — unsustainably, according to the paper.

With tuition as high as $116,000 and new, lower-cost competitors drawing candidates away from USC, the school struggled to recruit enough students to fill classes. Eventually, enrollment requirements began a downward slide and the school lost its top rating. Worse, graduates were left with astronomical debts — the second most of any program in the nation, behind the for-profit University of Phoenix, according to the Century Foundation.

According to the LA Times, the contract between 2U and USC remains in effect until 2030.

2U said it would release its inaugural transparency report in 2020.