Dive Brief:
- A new draft accreditation policy that would govern college contracts with third parties — including online program management companies — came out this week from the Middle States Commission on Higher Education. The accrediting body is seeking public comment on the plan by Oct. 20.
- Under the proposal, colleges’ contracts with third parties would need to address several issues, including the conditions in which an agreement could be terminated, protections for students if the relationship ends, and procedures for addressing grievances.
- The proposal would not limit the number of third-party contracts colleges could enter but MSCHE would carefully examine any “excessive outsourcing of key business operations or functions.” Moreover, contracts that outsource marketing, recruiting and advertising would “receive intense scrutiny,” it states.
Dive Insight:
The proposal comes amid high scrutiny of online program managers, known as OPMs. These companies help colleges run online programs by offering services like marketing, recruiting and course development. In return, OPMs often receive a cut of tuition revenue.
Student advocates and Democratic lawmakers have argued these arrangements incentivize OPMs to employ aggressive recruiting practices and drive up the price of online education.
A report last year from the U.S. Government Accountability Office, a federal watchdog, found the U.S. Department of Education wasn’t adequately monitoring these contracts. In response, the department issued guidance earlier this year to increase oversight of OPMs — but then delayed its implementation after widespread outcry from colleges.
Under Secretary of Education James Kvaal said in an April announcement that the new effective date for the guidance would be six months after the final version is published, though he did not give a more detailed timeline. The department is reviewing whether to revise the guidance after receiving more than 1,000 public comments on it, Kvaal said at the time.
Accreditors already review colleges’ relationships with third parties, according to a 2021 report from The Century Foundation, a left-leaning think tank. But the authors argued that accreditors aren’t doing enough to provide oversight of OPM contracts.
“Too many colleges rushed into expensive and long agreements without sufficient safeguards in place, and too many accreditors have looked the other way,” Clare McCann, higher education fellow at philanthropy Arnold Ventures, said via email Thursday.
McCann said MSCHE’s proposed changes aren’t perfect and leave ambiguity about when contracts require review and approval from the accrediting body.
“But they’re a good step forward,” she added. “Hopefully, other accrediting agencies will begin to follow suit.”
Stephanie Hall, acting senior director for higher education policy at the Center for American Progress, said via email Thursday that it is encouraging to see an accreditor take up the issue. But Hall argued the proposal “doesn’t look much different from the status quo.”
The onus remains on colleges to ensure programs built with the help of OPMs are successful, Hall said, adding that MSCHE’s proposed policy doesn’t explain how it would be enforced.
“If this is the best we can expect from accreditors when it comes to the oversight of institution-OPM arrangements, action from the Department of Education is all that more urgently needed,” Hall said.
MSCHE, which accredits more than 500 colleges, said it will consider all public comments received and revise the document for its November 2023 meeting. The new policies are slated to take effect Jan. 1.
The policy proposal states that institutions should retain oversight of key operations, including marketing, admissions criteria, tuition and fees, curriculum planning, and academic advising and support services.
It also says that MSCHE would review colleges’ use of third parties and level of outsourcing when they apply for accreditation or are being evaluated. And it would require colleges to provide the accreditor with key information, such as a list of their third-party providers, a description of services they offer for educational programming, and evidence that these third parties have been evaluated.
Federal regulations require accreditors to review arrangements where more than 25% of an educational program is outsourced to a nonaccredited entity. Programs that are more than 50% outsourced are not eligible for Title IV funding.
MSCHE’s proposal outlines what information it would request during those evaluations, including the share of the program outsourced to the third party and the method for calculating that percentage.
Hall also criticized these elements of the proposal, arguing it doesn’t provide details about how colleges should calculate an OPM’s involvement.
“MSCHE’s proposed policy lacks detail on two fronts: how schools should calculate outsourcing levels and how MSCHE plans to verify reported calculations,” Hall said.
