Arnold Ventures Influence Beyond Regulation

"Research" and letters and lawsuits, oh my

Note: Due to the nature of the topic that includes references to specific authors and their organizations, we have decided to make this premium On EdTech+ post free and openly available.

Additional Notes: Based on social media and private conversations about the post yesterday, I would like to be more clear in my language. 1) By coalition I mean the organizations or parts of organizations that are that are united on a common message against OPM rev share deals. I do not mean to imply that most of New America’s or The Century Foundation’s or the Center for America Progress’s funding as overall organizations comes from Arnold Ventures - just the activities tied to the current regulatory activity against OPMs as a method to reduce student debt. 2) Furthermore, I am pointing out funding connections that are relevant but am not implying that this funding is based exclusively on OPM issues. 3) I realize that not all institutions or vendors have a common perspective on the two regulatory guidance issues. In particular, there is a subset of institutions and vendors that strongly oppose the TPS expansion but that at least privately supports the removal of the bundled services exception.

In yesterday’s post I shared how Arnold Ventures happens to provide funding to more than 80% of the think tanks and foundations publicly targeting Online Program Management (OPM) companies though changes in regulatory guidance.

But if you step back and look at the broader movement against OPMs beyond regulatory action, you get a more complete picture of Arnold Ventures’ influence. There is a multi-channel campaign being waged by the coalition, and seldom do the connections get mentioned in news stories.

It might help to go backwards in time to get this broader perspective.


Last week there was news at the Wall Street Journal (WSJ) of a class action lawsuit against the University of Southern California (USC) and their usage of 2U as an OPM for the online Master of Social Work program. Buried in paragraph 14 is an interesting nugget.

The Project on Predatory Student Lending has sued for-profit colleges such as ITT Technical Institute and Corinthian Colleges in the past. This is its first case against a traditional nonprofit institution, said Eileen Connor, president.

$4.5 million of funding for the Project on Predatory Student Lending (PPSL, see above) specifically to “help establish legal protections for college students against predatory lending practices.” There’s not a lot of nuance there, and PPSL is doing its job.

In December 2022 there was a similar lawsuit against USC, also announced by WSJ.

The suit, which has three named plaintiffs and is seeking class-action status, was filed by the nonprofit National Student Legal Defense Network and the law firm Tycko & Zavareei LLP. It alleges USC promoted its high U.S. News rank on Rossier’s home page, as well as on the sites for its online degree programs, and that both USC and 2U noted the ranking on social media and in press releases

$7.7 million of funding for the National Student Legal Defense Network (NSLDN, see above) specifically to “support efforts to protect and advance higher education consumer protection policies and to direct litigation to protect students against predatory institutions in higher education.”

These lawsuits are largely funded by Arnold Ventures and certainly appear coordinated.

Letters Part 1

Also last week, an advocacy group sent a letter to the University of California warning them to avoid OPM-based bootcamps.

The University of California system took steps this year to restrict students’ ability to take fully online degree programs, but now an advocacy group is calling for further action: “banning online nondegree courses such as vocational-training boot camps.”

A letter sent this week by the Student Borrower Protection Center and signed by five University of California faculty members alleges that “these online certificate programs rarely leave students with the skills necessary to earn enough to pay off the debts they accrue in pursuit of their education.”

$2.7 million of funding for Student Borrower Protection Center (SBPC, see above) specifically to “launch the Student Borrower Protection Center and the Student Loan Law Project.” In other words, to create this group specifically to take this type of action.

Letters Part Deux

There were several letters and one op-ed sent by members of the US Congress advocating for action against OPM companies, asking ED to rein in predatory companies. In this case I am not aware of any direct contributions from Arnold Ventures or the Arnolds, but I’d like to point out the referenced material. Going backwards in time:

  • January 31, 2023 op-ed by Representative Rosa DeLauro at Higher Ed Dive, describing that “just like predatory for-profit colleges, these OPMs mislead students, drive up costs and leave student borrowers with a low-value education, excessive debt and low-paying jobs after graduation.”

  • December 2, 2022 by Representatives Bobby Scott and Rosa DeLauro and Senators Patty Murray, Elizabeth Warren, and Tina Smith - pushing ED toward “conducting a formal legal review of the Department’s guidance on the bundled services exception” and to “improve the data collection of information relevant to OPM arrangements.”

  • January 14, 2022 by Senators Warren, Smith, and Sherod Brown, asking OPM providers to respond to specific data collection questions.

The ammunition used in all of these letters, as is true in so many other op-eds and media stories, starts from the basis of three primary “research” sources.

Research Scare Quotes

Yes, they are intentional.

Besides the reference to the General Accountability Office (GAO) report on OPMs from Spring 2022, the most common references that we have abuses by OPMs that harm students and increase student debt start with the Kevin Carey article in Huffington Post, two Hechinger Report articles, and two Century Foundation articles by Stephanie Hall.

All of the Congressional letters referenced similar source materials to frame the discussion, and they even treat these articles as neutral research reports that just happened to find that OPMs are bad. Let’s look at the three key sources, and continuing with the backwards-in-time approach:

In September 2021 Stephanie Hall wrote “Invasion of the College Snatchers”. This article summarized TCF’s review of over 40 OPM contracts obtained by public records requests, and compared the arrangements to the cult movie.

In the 1978 version of Invasion of the Body Snatchers, the city of San Francisco is completely taken over by what the film’s fans call “pod people.” They are parasitic, invasive beings that control the shell of the bodies they have taken over. Even Elizabeth and all but one of her friends’ bodies have been snatched by the end, in spite of exhaustive efforts to avoid being taken over by the pod people. One by one, Elizabeth’s friends are taken and in their new form, one tells her, “The function of life is survival.” Similarly, when universities are starved for revenue, that is the mission they shift to–survival–and they will outsource themselves under the illusion that it will help them avoid a certain death. In reality, outsourcing on a grand scale turns universities into shells of their former selves and the way they serve students follows suit.

This 2021 article followed a 2019 TCF article by Stephanie Hall and Taela Dudley titled “Dear Colleges: Take Control of Your Online Courses.” At the time I wrote a post titled “The Century Foundation On Online Education And OPMs: Position Paper Masquerading As A Study,” noting two key problems.

* One is that TCF does not list in their summary spreadsheet which contracts they consider “directly relevant to the management of online courses”. By my hand-coding, I get 14 OPMs, 10 OPEs, 2 MOOCs (and these are not the more-recent MOOC-as-OPM version), and 17 CE / PD, for a total of 43. I’m guessing that my list is fairly close, but who knows.

* More importantly, these data points are mostly arbitrary, depending on which schools they asked and how successful they were in obtaining public records. Yes, they claim to have targeted schools with large online enrollments, but the data are mixed up between face-to-face and online programs, degree-based and non-degree based programs and courses, and contract years from 2002 to 2019. As a public listing this approach is fine. But to make constant percentage-based claims (53% of contracts, 68% of contracts, etc) implies statistical relevance and is misleading.

$4.3 million in funding for The Century Foundation (TCF, see above) specifically to “support research and policy resources to improve federal oversight of the postsecondary education and training market,” among other similar activities.

In January 2021 Jon Marcus wrote an article for The Hechinger Report titled “More colleges and universities outsource services to for-profit companies,” which followed Jillian Berman’s 2019 Hechinger Report titled “Spotlight swings to for-profit middlemen that may be driving up the cost of online higher education.” These articles are different in nature, as the 2021 item is a balanced description of the OPM market, sharing multiple perspectives and avoiding simple “side X is evil” assumptions. The 2019 article, however, starts with a strong position in mind with the title and lede - OPMs may be driving up costs.

And though the colleges are still technically responsible for setting the prices of the programs, a recently published review of some of these contracts by Hall and her colleagues at The Century Foundation found that, in at least some cases, the OPMs do play a role.

Her review found a wide swath of approaches to price setting and revealed that it’s been common for OPMs to insist that a school price its program no higher than on-campus offerings, while also requiring that the price be market-competitive.

You may have noticed that The Hechinger Report is not listed in my table as being funded by Arnold Ventures. But that is because the table was limited to organizations publicly commenting on the regulatory guidance issues. It turns out that Arnold Ventures does provide funding to The Hechinger Report through Teachers College Columbia University. $500 thousand for general operating support. And to their credit The Hechinger Report makes it easy to find out their funding sources, with Arnold Ventures as one among many foundations.

Looking further back we find what may be the urtext for this movement, Kevin Carey’s April 1, 2019 article in HuffPost titled “The Creeping Capitalist Takeover of Higher Education,” along with its infamous headline graphic.

Kevin Carey is and was the Vice President, Education Policy & Knowledge Management at New America. In the article he presents an expansive view of the OPM market - the motivations, the history, the importance of the bundled services exception, and the problems at USC. The tone of the article, however, is quite apparent by looking at the title and graphics. Although I have no problem with that perspective, I think that New America’s funding by Arnold Ventures is relevant at least by way of disclosure. New America does have a funding page with searchable grants, which is useful, but that disclosure would have been very difficult to trace with publication in the Huffington Post.

$1.1 million in funding to New America specifically to “support efforts to create and disseminate policy recommendations for federal policymakers to advance policy change in higher education data, accountability, and evidence.”

Speaking of Transparency

In all but two of the cases mentioned above that are tied to Arnold Ventures funding (the Hechinger Report and New America indirectly being the exceptions with searchable funding pages), the organization writing the research, articles, letters, and filing the lawsuits made no attempt to acknowledge the Arnold Ventures funding source. Yes, Arnold Ventures lists the grants on their site, but the Project on Predatory Student Lending, National Student Legal Defense Network, Student Borrower Protection Center, and The Century Foundation did not and do not disclose their relationship to Arnold Ventures. A coalition with common funding, common messaging, and a coordinated campaign, but very little meaningful disclosure by the grantees.

Arnold Ventures funding and influence are quiet but pervasive.

Unfortunately this lack of disclosure has worked. I am at fault as well, as I have not dug deeper in the funding arrangement until the past week, and I fell into the trap of describing the individual letters and lawsuits and article but not describing the coalition. And media sources - both national with WSJ and in education circles - have not mentioned these connections at all.

This leads the public, the reader, to see all of the anti-OPM campaign elements as individual items and not with its true nature as a coordinated multi-channel campaign.

Correlation Is Not Causation

Particularly in the case of larger organizations with multiple areas of coverage - New America, The Hechinger Report, The Century Foundation as well as CAP and Third Way - we should not assume that because Arnold Ventures provides funding to a group that the article’s perspective was directly influenced by Arnold Ventures. Even if the timing of that funding aligns with a change in coverage, we should give these groups the benefit of the doubt.

And it may be that there is causation but that it flowed in reverse. Perhaps Arnold Ventures was swayed by the New America and Hechinger Report and Century Foundation coverage to develop its anti-OPM stance.

But there are still problems with the structure and methods of the coalition, as I described in yesterday’s post.

I have no problem with different people - regardless of their wealth - advocating their opinions on educational reform issues. The problems with this largely single-source funded coalition and its rush for change are two-fold.

First is the transparency issue, with ED listening to this small group of advocacy organizations, and developing guidance that impacts nearly all institutions and most vendors, without sufficient public knowledge. Especially when some organizations in that coalition are hardly independent.

Second is the groupthink issue, where any small group of likeminded people who believe they know what and who are good and bad can come to flawed conclusions by not engaging or listening to the broad community and challenging their own assumptions.

Whether you agree with the Arnold Ventures coalition perspective or not, I believe that the higher education community needs to understand the nature of this public campaign and who the key players are.

Update 5/9: New America does have a searchable funding page showing the Arnold Ventures grants. I have updated the descriptions of their disclosure above.

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