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Colleges are responsible for any “false, misleading, or inaccurate information” that their contractors provide to students, the Education Department said Wednesday.
The department has sought for nearly two years to increase its oversight of the outside contractors that colleges and universities use to help run online programs and to bring more transparency to the sector. Of particular concern to the department and consumer protection advocates is that the companies, known as online program managers, run online classes on behalf of a university. Critics say that setup misleads students into thinking they are taking a class with the college as opposed to an outside company.
The guidance document known as a Dear Colleague letter outlines three statements that would violate federal rules that prohibit a college from misrepresenting to students the nature of its education programs, the cost or the employability of graduates. The cited examples include identifying an employee of the OPM as a university employee and presenting an OPM recruiter as an academic adviser.
Additionally, the department officials said third-party servicers aren’t allowed to describe an OPM-run program as equivalent to the campus-run version unless there’s “specific evidence of actual parity with respect to each advertised aspect.”
“Programs may not be equivalent if they have meaningful differences in rates of completion, job placement, earnings, or licensure,” officials wrote in the letter. “Institutions should also be clear if the credentials awarded in programs supported by an external servicer provider are different from the credentials students earn in the campus-based version of the program.”
This list of potential violations isn’t exhaustive, officials noted. If the department finds that a college or its partner engaged in a substantial misrepresentation, the institution could be fined or face other sanctions, up to loss of access to federal financial aid.
Officials said the department is aware of “multiple instances in which eligible institutions or their external service providers have apparently engaged in making these types of statements to misrepresent, allow to be misrepresented, or facilitate the misrepresentation of, aspects of programs offered by the eligible institutions.”
The guidance, issued in the final week of the Biden administration, could be rolled back under the incoming Trump administration. But advocates and critics of OPMs who praised the new guidance urged the president-elect’s team to keep the letter in place.