Revised TPS Guidance Plans

Best guess right now is April - Jun 2024, if at all

Author

Phil Hill
December 19, 2023

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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.

Today we received news, thanks to the 2U lawsuit against ED regarding TPS. In short, the earliest ED expects to release revised TPS guidance is April 2024. From today’s joint status report [emphasis added]:

6. The Department is still engaged in the monthslong process of carefully reviewing the more than 1,000 comments it received from the community on the 2023 DCL and developing new guidance. Although the Department stated in a press release on November 28, 2023, that the Department “intends to issue updated guidance on Third Party Servicers in early 2024,” the Department does not anticipate issuing revised guidance in the next 90 days.

7. The parties will file another joint status report in 90 days.

Don’t expect anything in January through March 2024 on TPS other than the next 2U lawsuit status report in late March.

The best guess I have is that if ED releases revised TPS guidance in mid 2024, it will take roughly the same form as before but limit its scope to companies involved in marketing and student recruitment.

Whether and when ED updates / rescinds guidance on the bundled services exception is unknown.

Stay tuned.

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