The U.S. Department of Education delayed and altered proposed new rules that some worried could cause unintended disruptions to edtech and the many students enrolled in online degree programs.
Through a blog post published last week, the department delayed and updated some of its disputed restrictions on “third-party servicers.” Notably, officials got rid of the ban on foreign ownership of third-party partners. They also spelled out a number of relationships that don’t count as part of their “third party servicer” category, including study-abroad programs, course-sharing consortiums and recruitment of some foreign students.
The Education Department’s overall goal is to bring more oversight to the companies that work with colleges to offer online degree programs, a sector known as Online Program Management (OPMs). These OPM’s recruiting practices have been blamed for swelling student debt, since in many cases the companies operate by getting a share of tuition revenue. And some lawmakers, including Sen. Elizabeth Warren, have called on the department to take action.
So in February, the department came out of the gate swinging, outlining wide new rules for revenue-sharing agreements that would have broad implications for the edtech industry.
Ever since it published the disputed new rules about online programs and for-profit companies, though, the edtech industry has been on edge. Many of those who commented on the proposed new rules were against the changes, according to a review of the public comments, even though consumer and student advocates favor the changes.
The loudest voice has been OPM provider 2U, which sued the department, and the company’s cofounder Chip Paucek has described supporters of the proposed rules as part of an “anti-enterprise agenda.” In essence, he argues that for-profit companies bring innovation to online offerings, and that without the revenue-share model OPMs have with colleges, that would cease.
Even with its latest modifications, Education Department officials haven’t abandoned their approach, according to edtech columnist Phil Hill, who’s extensively covered proposed rules. But by clarifying its rules, Hill argues, the changes are ultimately an improvement.
📰 HEADLINES
HOW TO SPEND A WINDFALL: Two years ago, MIT and Harvard sold off their online course effort edX to a for-profit company for $800 million. Now they’re using that windfall to launch a new nonprofit, with the goal of serving learners that higher education has historically left behind. EdSurge found out how the money will be spent.
COLOR-FULLY CODED: As a computer science college student, Nia Asemota has felt, at times, like the odd woman out or actively discouraged from pursuing a career in tech. During the initial pandemic lockdown, the Afro-Latina started sketches that would eventually become the “Black Girls Code the Future” coloring book, aimed at inspiring young coders to feel like they belong in the tech world.
MUSIC TO MY EARS:Music educator David Casali had a hard time getting his students to engage in class, much less read and write music. However, after experimenting with technological innovations and drawing on his students’ love of games, David was able to help his students find the rhythm and creativity they needed to tell a story with music.
📢 DEALS
Apollo Funds announced that it is purchasing $500 million in stock in the textbook publisher Cengage Group.
Innovamat, a Barcelona-based math curriculum company, raised $21 million in Series A funding from Reach Capital.
LMS365, a learning management system built on Microsoft’s product suite, raised $20 million.
Central New Mexico Community Collegeraised more than $1 million for the Unmudl Skills-to-Jobs Marketplace, its online course marketplace.
The workforce credentials company Territoriumannounced an investment from JFF Labs. The amount was not disclosed.
PeopleGrove, a career development and alumni engagement platform, acquiredStudent Opportunity Center, a platform that helps connect students to real-world learning opportunities and experiences such as conferences, publications and internships.
Times Higher EducationboughtPoets and Quants, a publication about business schools.
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🎧 ON THE PODCAST
GENERATION ‘SOLIDARITY’? With every new generation of students there’s an effort to understand what’s different about them, and what motivates them as they enter society and the workforce. For Gen Z, a key factor is their skills in organizing on social media and interest in working across traditional partisan divides on issues like gun control, environmental protection and racial justice, argues Timothy Law Snyder, president of Loyola Marymount University in Los Angeles, who calls them the “solidarity generation.”
🏃 MOVERS AND SHAKERS
Solve, a social impact initiative of the Massachusetts Institute of Technology, namedHala Hanna as executive director.
Oxford International Education Group namedSanam Raza as senior vice president for the U.S.
Interplay Learning namedKim Caldbeck, a former Chief Marketing Officer for Coursera, to its board.
👀 ALSO ON OUR RADAR
Homework help site Chegg launched a learning service built on GPT-4, CheggMate. (Chegg)
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