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Education Department delays protections for students of long distance programs

Online-Only Education Programs Largely Unregulated & Have Been Plagued By Fraud 

July 2, 2018

WASHINGTON, D.C. – The Department of Education announced today that it is delaying new rules governing long distance education programs until July 2020.  Delaying the rules is unjustified and will leave students participating in online education programs vulnerable to fraud and abuse, according to Consumers Union, the advocacy division of Consumer Reports.  Consumers Union had urged the Department to implement its rule without delay

“Long distance education programs remain largely unregulated and are the source of an increasing number of complaints by students,” said Suzanne Martindale, senior Attorney at Consumers Union.  “Online programs offered by for-profit schools are too often purveyors of fraud and debt instead of the knowledge and skills students need to succeed.  There is simply no rationale to abruptly delay the rule for another two years, allowing confusion and uncertainty to impact states, distance education providers, and – most importantly – students.”

Increasing complaints about fraud at some institutions indicate that the need for clear state oversight standards is overwhelming.  For example, in 2014, Ashford and its parent company Bridgepoint Education, Inc. paid $7.25 million to Iowa for misleading online recruiting practices, including deceiving prospective students by leading them to believe that online education degrees would allow them to become classroom teachers.   Last year, the California Attorney General also sued Ashford and Bridgepoint for widespread deception in its recruitment practices, as well as aggressive debt collection.

However, Ashford continues to have an active distance education business. Ashford is not alone in doing active business despite being under investigation.  For example, the University of Phoenix, Kaplan and Ashworth have also been the focus of complaints by state and federal agencies for their ongoing distance education programs.

The Department’s rule for state authorization of distance education programs, issued in December 2016, clarified what states need to do to better oversee out-of-state providers marketing distance education programs to their students. The rule allows for interstate reciprocity agreements but makes clear that states have a right to enforce their own consumer protection laws. The rule also provides important disclosures so that students know whether or not their program meets the relevant requirements for professional licensure in their home state.

Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext. 7606 or 415-902-9537 (cell)