NAICU Raises Concerns about Possible Recission of Bundled Services Guidance

In conjunction with the higher education community, NAICU sent a letter to Secretary Miguel Cardona expressing serious concerns about reports that the Department of Education is considering rescinding guidance that currently permits revenue-sharing agreements with online program management companies (OPMs) that provide “bundled services.”

Although the Department has not publicly confirmed the scope of the changes it expects to make to the guidance, the comment letter notes that the guidance has long permitted institutions to partner “with outside entities to provide critical services and supports to students and institutional staff. An abrupt rescission of this guidance would result in an untold number of existing contracts becoming suddenly impermissible.” Such action not only would cause unnecessary “disruption and uncertainty” for institutions and the students they serve, but also would likely be reversed by the incoming Trump Administration and Republican Congress.

Since it was issued in 2011, the bundled services guidance has been criticized by consumer groups seeking more stringent regulation of OPMs. While the Higher Education Act prohibits institutions of higher education from making incentive payments for purposes of recruiting students, the guidance permits such revenue sharing agreements when recruiting services are provided as part of a larger package, or bundle, of services. 

For more information, please contact:
Jody Feder