Another Delay for Revised TPS Expansion Guidance

Was this forwarded to you by a friend? Sign up, and get your own copy of the news that matters sent to your inbox every week. Sign up for the On EdTech newsletter. Interested in additional analysis? Try with our 30-day free trial and Upgrade to the On EdTech+ newsletter.

Two of the biggest questions in EdTech center around the plans for the US Department of Education (ED) and whether / when it will release revised guidance on two items targeting the Online Program Management (OPM) market.

• The third-party servicer (TPS) guidance released in February 2023 was created to rein in OPM companies but was written in a way to pull in most of EdTech in the US. Given the increasingly global nature of EdTech, that action generated massive pushback that led to ED pulling back the guidance. When will it release revised guidance?

• The bundled services exception was released in 2011 and underpins OPM tuition revenue-sharing models. ED has stated that it is reviewing that guidance and considering whether to rescind it. If done, that action would blow up the OPM market and cause hundreds of contracts to be rewritten, and a redefinition of the market itself.

Update from March 18

On Monday in a joint status report based on the 2U lawsuit against the Department of Education (ED), we learned that ED again is pushing out the date for the earliest release of revised third-party servicer (TPS) guidance.

Based on my notes on the Post OPM conference, James Kvaal, the Undersecretary of Education, said that ED is working on these revisions and expects to release them within 2024 (both TPS and bundled services exception).

If you put these statements together, and if you accept ED’s sincerity in its statements, this means that TPS guidance revisions will be released somewhere between late June and December of 2024.

To put this news in context, it is important to understand the constantly-changing public plans from ED on its timeline surrounding the TPS guidance.

This process is ridiculous - an ever-changing story without any clear expectations for institutions and vendors that would have to comply with the rules, when and if they become effective.

Justification Is Not Credible

I, however, find the justification for the timing to stretch all limits of credibility, specifically “carefully reviewing more than 1,000 comments.”

For comparison, ED received more than 7,500 public comments on its Gainful Employment & Financial Value Transparency rules, and they reviewed those comments and released the final rule in just three months. The TPS comments were closed almost a full year ago, with fewer than 1% of comments supporting the guidance (which was subsequently rescinded with a promise of revision). It took two of us less than three weeks, working part time, to review the comments. The volume and complexity of reviewing the comments cannot be the actual rationale.

Projections

At this point I just do not know whether or not ED will actually release a revision to the TPS guidance in 2024. ED clearly is not being cautious in its 2024 regulatory activity, but at the same time it is repeatedly delaying the earliest date by 90 days at a time. This lack of clarity is part of the problem.

Nevertheless - don’t expect any updates or releases before (at least) late June.

The main On EdTech newsletter is free to share in part or in whole. All we ask is attribution.

Thanks for being a subscriber.