Did You See The Memo About the TPS Reports? EdTech Style
Well that was quite an update from the Department of Education (ED). The department, in a long-awaited move, has started action on reviewing the 2011 Dear Colleague letter guidance that provides much of the regulatory foundation for OPM revenue sharing agreements. The short description is that ED will hold public listening sessions starting in March to support potential changes to the guidance, including the question of “How would changing third-party servicer contracts from a revenue-sharing model to a fee-for-service model impact the services, such as recruitment, currently provided to an institution under the bundled services exception?” We don’t know if there will be any changes, but we know there is a review. [link to full-page audio]
The GAO Jump Ball
This should not be a surprise, at least to any readers of this blog. The Spring 2022 release of the Government Accountability Organization (GAO) report on OPMs and revenue sharing agreements foreshadowed the next steps, despite the report itself not finding any major issues.
I was wrong in my estimate of timing, as the review did not start in the fall, as I predicted, likely due to the ED biting off more than it could chew with the student loan forgiveness and borrower defence planned changes. In my initial coverage of the GAO report, I noted that the scope was likely to grow.
A Change in Scope
We now know much more with today’s announcement, and the answer is that ED is going much further than almost anyone suspected. The second half of today’s announcement will likely have a bigger impact than the potential changes to revenue sharing for OPMs.
Traditionally, Third-Party Servicers (TPS) are defined as those entities directly supporting institutions in their provision of Title IV financial aid, and these providers have increased regulatory burdens. Being based in the US and not owned by a foreign national, annual audits, addition reporting of all contracts with ED, etc. Consider the implications of the first requirement.
Today’s news initially pointed out that OPMs are to be considered TPSs, also triggered by the GAO report, but then ED went further. Much further. Here is the key sentence:
Basically, if a vendor provides software and services enabling in almost any way an academic program eligible for Title IV financial aid, that vendor may be considered a TPS with all of the increased regulations. Consider this element of the set of tables provided to explain what activities might or might not fall under TPS regulations.
Learning management – even LMS vendors are now considered TPS? With this broad definition, it certainly appears that they are. This would also capture publishers and courseware providers, ERP providers, etc, etc. And the guidance change is effective immediately. This is huge, if ED does not further amend their new guidance.
Regulatory Activism Redux
Today’s announcments certainly fit into the new Regulatory Activism that I described 11 months ago.
Further in that post I described what was becoming a common approach.
If I’m reading the new TPS guidance changes correctly, we are going to have a slew of unintended consequences.
Both parts of today’s announcement need to be followed – the review of OPM revenue sharing agreements and the new scope changes to TPS guidance. Stay tuned for more coverage.
The post Did You See The Memo About the TPS Reports? EdTech Style appeared first on Phil Hill & Associates.