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Notes on OPM Bundled Services Virtual Listening Sessions
Will tuition revenue sharing agreements survive?
Phil Hill
March 09, 2023
How complicated is it to push an unmute button?
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On to the update.
The US Department of Education (ED) held virtual listening sessions yesterday and today to help with the decision of whether to rescind or alter the 2011 Dear Colleague Letter that provided a “bundled services exception” on the incentive compensation ban, effectively underpinning the use of OPM revenue sharing agreements. These sessions were announced in the February 15th release.
The U.S. Department of Education announced today that it will hold virtual listening sessions on the impact of Department guidance on how institutions of higher education may compensate their recruiters. The Department is looking to hear from the public about how an exception contained in the guidance has affected the growth of online enrollment and associated federal student loan debt.
"Online education has the potential to meet the needs of many students and lower costs," said Under Secretary James Kvaal. "But we are concerned about the growth in loan debt and want to ensure students get value for their money. These listening sessions are part of the Department's commitment to undertake a careful, fair, and thorough review of the rules around how contractors recruit students for online programs. This process will give the public a chance to make its thoughts known on any possible changes."
The Higher Education Act prohibits institutions of higher education from providing a commission or bonuses to individuals or entities based on securing enrollment or financial aid. This prohibition is known as the ban on incentive compensation. In 2011, the Department issued guidance related to the ban, which created an exception for third parties if they provide a bundled set of services, which can include recruitment.
While we will provide more analysis in future posts, I’d like to share some initial notes on these public comments.
For the most part, you can interpret “public comments” as advocates on both sides making short statements (3 minutes each) in public. There were few members of the public commenting who were not already actively involved in lobbying, both formally and informally. No, I am not surprised that Bob Shireman is against revenue sharing and that Chip Paucek is for them.
I am not sure whether ED decided on the order of speakers unilaterally or if this was a first-come first-served situation, but the result was that Day 1 - especially the first half - was stacked with consumer advocates and even a US representative calling for the full recision of the 2011 guidance. Seven of the first eight speakers were activists on this side, and this gave the appearance of the anti-rev-share side being better organized. Day 2 was different, with roughly 20 of the 24 speakers (I lost count, so this is approximate) speakers arguing to keep the guidance and allow revenue sharing.