Democrats urge Biden admin to scrutinize colleges’ outsourcing of online programs

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Dec 05, 2022 View in browser   By Michael Stratford FIRST LOOK — DEMS URGE CARDONA TO SCRUTINIZE ONLINE COLLEGE OUTSOURCING: Top Democrats in the House and Senate are calling on the Biden administration to crack down on the companies that universities hire to advertise and manage their online courses, including reexamining whether a key part of the industry's business model is allowed under federal law. — Online program management companies, known as OPMs, have faced scrutiny over the past several years from some Democrats and consumer advocates, who question the growing role of the businesses in higher education. But senior Democrats are now sketching out more specific demands for how they want the Biden administration to take to address the companies. — A group of Democrats, in a new letter to Education Secretary Miguel Cardona , urged the administration to immediately begin a "formal legal review" of Education Department guidance that allows colleges to pay the companies based on the amount of tuition revenue they help generate. That guidance, published in 2011, carves out an exception to the typical federal rule against "incentive compensation" in higher education, which is meant to prevent abusive student recruiting practices. Getty Images — The letter was signed by the chairs of the congressional education committees, Rep. Bobby Scott (D-Va.) and Sen. Patty Murray (D-Wash.); House Appropriations Chair Rosa DeLauro (D-Conn.); as well as Sens. Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.). — Federal and state regulators lack "adequate oversight of OPM arrangements, especially considering the significant amount of federal funding flowing to OPMs," the Democrats wrote in their letter. They cited a congressional watchdog report from earlier this year that raised questions about whether the Education Department is appropriately monitoring colleges' agreements with for-profit businesses. — The Democrats also want the Education Department to look at whether colleges are required to disclose more information to students and prospective students about the role an OPM is playing, often behind the scenes, in operating its online courses. — An Education Department spokesperson said: "We've received the letter and are reviewing it." IT'S MONDAY, DEC. 5. WELCOME TO MORNING EDUCATION. Please send tips and feedback to your host at mstratford@politico.com or to my colleagues: Mackenzie Wilkes at mwilkes@politico.com , Juan Perez Jr. at jperez@politico.com and Bianca Quilantan at bquilantan@politico.com . Follow us on Twitter: @Morning_Edu and @POLITICOPro .   JOIN WEDNESDAY FOR A POLITICO DISCUSSION ON THE NEW TRAVEL EXPERIENCE : Americans are now traveling in record numbers — but the travel experience has changed drastically in recent years, not always for the better. What lessons can we learn from the pandemic and different responses around the globe? And in the face of a possible recession, what will help the travel industry remain vibrant and deliver jobs? Join POLITICO on Dec. 7 for "The Travel Experience Redefined" to discuss these questions and more. Breakfast and coffee will be provided. REGISTER HERE .     Want to receive this newsletter every weekday?  Subscribe to POLITICO Pro . You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. Happening This Week THIS WEEK — CARDONA HEADS TO FRANCE: Education Secretary Miguel Cardona will lead a delegation at the Organization for Economic Co-operation and Development Summit in France this week where he'll discuss "lifelong education and reimagining education for an equitable future," the department said. — Cardona "will also join education officials for a school visit to learn how teachers are addressing academic recovery following the pandemic, and to learn more about efforts to increase multilingual education," the department said. In Congress WHAT'S ON TAP FOR EDUCATION IN THE LAME DUCK: The House and the Senate return this week to tackle a lengthy list of unfinished business before the end of this Congress. Here's what's at stake for education issues in that final legislative sprint: — Government spending: It's crunch time for congressional appropriators and leaders to reach a deal to fund the government beyond Dec. 16 when a stop-gap spending measure expires. Colleges and universities are pushing for an omnibus spending deal that includes a boost to the maximum Pell grant and other student aid programs. They're also lobbying to get Congress to shell out money for the research and science programs lawmakers authorized as part of the CHIPS and Science Act earlier this year. In addition, HBCUs, tribal colleges and other minority-serving institutions are seeking new federal funding for improving infrastructure and technology on their campuses. — An omnibus, year-end government spending deal could also be a vehicle for other education policies that have been debated this Congress, including short-term Pell and the College Transparency Act, which is aimed at improving federal tracking of student outcomes in higher education. — Immigration deal? Senate Democrats have been scrambling to see if they can find enough GOP support to clinch a deal to allow DACA recipients to stay in the U.S. legally. The Obama-era program shields from deportation young immigrants who were brought to the country as children. College presidents last week made a push in Washington for Congress to take up the issue. A deal on DACA faces long odds in the remaining weeks of this Congress, though it's likely to become even more difficult, if not impossible, in a divided government next year. — A year-end tax deal? Congressional negotiators are also working on a possible year-end tax deal as Democrats press to revive some form of their expanded child tax credit. College groups are urging tax writers to include a plan to lower taxes for Pell grant recipients and make it easier for students to access a higher education tax break in any deal they reach. Student Loans CORDRAY ROLLS OUT 'FRESH START' GUIDANCE TO GUARANTY AGENCIES: Federal Student Aid chief Rich Cordray on Friday rolled out new details of how the federally-guaranteed student loan industry must carry out the Biden administration's policy to pull borrowers out of default on their student debt. — The Education Department earlier this year announced its "Fresh Start" program that is aimed at expunging the defaults for the millions of borrowers who fell severely behind on their federal student loan payments. — The guidance applies to defaulted federal loans that are held by private companies known as guaranty agencies. It details how the Education Department plans to compensate those companies and how quickly they need to start implementing the program. — For example, the companies will have to start reporting defaulted borrowers to credit bureaus as current on their loans starting Feb. 1 — or, depending on a borrower's circumstance, take other steps that eliminate the negative credit reporting consequences of default. — Borrowers will still have to take some action to fully pull their loan out of default. The deadline is one year after the payment pause ends, which currently would be some time in the middle of 2024. ICYMI — BIDEN ASKS SCOTUS TO TAKE UP 2ND CASE ON STUDENT DEBT RELIEF: The Biden administration is asking the Supreme Court to intervene in a second major legal challenge to its student debt relief program and potentially hear it alongside the case the justices already agreed to hear in February or March. — The Justice Department on Friday urged the court to immediately pause a ruling by a federal judge in Texas that struck down President Joe Biden's debt relief program as illegal or, alternatively, take up the two cases at the same time. — The justices last week agreed to hear arguments about the legality of Biden's student debt relief policy in a case brought by six Republican-led states. The second case involves a lawsuit brought by the conservative Job Creators Network Foundation on behalf of two borrowers who were partially or fully excluded from Biden's debt relief plan. — Hearing the two cases together at the same time, the DOJ wrote in its filing on Friday, "would allow the Court to consider the full range of challenges to the plan at once." More here . MOVERS AND SHAKERS — Luis R. Lopez will be the Education Department's new chief information officer starting on Dec. 18, the agency announced on Friday . — Suzanne Stokes Vieth has been appointed as director of state relations and outreach at the National Association of Independent Colleges and Universities. She previously was deputy director for government affairs at Population Association of America/Association of Population Centers.   POLITICO APP USERS: UPGRADE YOUR APP BY DECEMBER 19! We recently upgraded the POLITICO app with a fresh look and improved features for easier access to POLITICO's scoops and groundbreaking reporting. Starting December 19, users will no longer have access to the previous version of the app. Update your app today to stay on top of essential political news, insights, and analysis from the best journalists in the business. UPDATE iOS APP – UPDATE ANDROID APP .     Syllabus — A killer on the loose leaves an Idaho college town shaken: The New York Times . — Education Department contractor mistakenly told about 9 million borrowers they were approved for debt relief: Insider . — 'Kids seem to be a paycheck": How a billion-dollar corporation exploits Washington state's special education system: ProPublica .   Follow us on Twitter Delece Smith-Barrow @DeleceWrites Michael Stratford @mstratford Bianca Quilantan @biancaquilan Juan Perez Jr. @PerezJr   Follow us

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