GAO Reviews ED’s Oversight of Online Program Providers

By Hugh T. Ferguson, NASFAA Staff Reporter

The Government Accountability Office (GAO) in a recent report is urging the Department of Education (ED) to improve instructions for institutions of higher education, as well as auditors, to better assist in conducting oversight of online program providers.

While GAO did not report any violations of any federal laws, the office’s findings underscored that the landscape does not have extensive oversight because they could not account for the exact number of online academic program managers (OPMs) arrangements “due to a lack of comprehensive data.”

Third-party OPMs are used to help institutions of higher education run their online education programs — and many of these entities are paid a share of tuition revenue.

According to GAO, in 2010 there were at least 20 new arrangements between colleges and OPMs — and by 2020 that number had grown to at least 165, with roughly 90% of these arrangements at public or nonprofit institutions.

GAO urged ED to provide colleges and accreditors with clearer instructions to detect any potential violations of federal law, and to provide details as to the extent to which ED’s monitoring instructions “ensure that it obtains the information needed to assess whether OPM arrangements comply with the incentive compensation ban.”

The study was spurred by GAO finding that in 2020 almost three-quarters of the nation's college students were enrolled in an education program offered at least partially online.

Due to the guesstimation in the total number of OPM arrangements, GAO expressed concern that ED does not have all the information it needs to detect incentive compensation violations.

ED concurred with both of GAO’s recommendations and provided details as to how it would go about making internal modifications.

In the wake of the GAO report, congressional Democrats called on ED to collect more data to ensure OPMs aren’t violating the Higher Education Act’s ban on abusive recruiting practices.

“We need to know more about these arrangements and make sure these companies are working to lower, not raise, costs for students,” said Sen. Patty Murray (D-Wash.), who chairs the chamber’s education committee. “This report makes clear the Biden administration needs to conduct proper oversight to protect students, prevent abusive recruiting practices, and improve transparency of these business arrangements — and I’m glad they are committed to taking action.”


Publication Date: 5/11/2022

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