Tuesday Follow Up

Anti OPM rev share law, Pluralsight collapse in value, and FAFSA kabuki theater

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Note: the first section today is in front of the premium newsletter paywall due to nature of the OPM story.

June has not brought any slowdown in the news. Herewith as some important updates to stories covered in this newsletter, mostly continuing trends already noted but with dramatic examples.

Anti OPM Rev Share Becomes Law

In early March I noted that there was a bill making its way through the Minnesota legislature that seemed to go beyond the US Department of Ed (ED) and Middle States Commission efforts to regulate OPM tuition revenue sharing models and EdTech in general with the expansion of third-party servicer (TPS) definitions.

The state of Minnesota, at least based on an introduced House Bill HF4343, takes the effort one step further. [snip]

The core of the bill is two-fold: first, it seeks to outlaw tuition revenue-sharing in the state, whether or not ED keeps the bundled services exception. [snip]

This [bill language] is where the Minnesota bill combines the general ideas of repealing the bundled services exception (i.e., killing revenue-sharing for OPM companies) with the disastrous ED attempt to redefine TPS guidance. “One or more” means that student support, technology support, and many other individual EdTech functions are pulled into the scope.

Besides seeking to kill revenue-sharing, the bill also requires TPS-style reporting requirements for the institutions.

The update? Minnesota signed a modified version of this bill into law, to be effective July 1, 2024. From my reading of the bill, it appears there were some real improvements to the language to avoid the TPS expansion problem of all EdTech being pulled into the rules.

Whiteboard Advisors has a very useful summary post on the new law, including the tighter definitions [emphasis in original].

The Minnesota law has a very specific definition of what an OPM is and therefore what types of entities can no longer participate in tuition sharing and fall under other requirements of the new law. In particular the definition notes the law applies to for-profit entities that “provide bundled products and services to develop, deliver, or provide managed programs, when the services provided include recruitment and marketing.”

In addition to the ban on tuition revenue sharing with public Minnesota colleges and universities, the law also sets limits on intellectual property, defines new reporting requirements, and new disclosure of the OPM partner’s role in any marketing materials.

Whether one agrees with this policy of banning rev share or not, this law is much better than the initial bill.

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