California Mulls Crackdown on Online Partnerships


Bills targeting for-profit institutions in California would prohibit tuition-sharing deals — a sign of growing political scrutiny of the role of online program management companies.

By Lindsay McKenzie

State lawmakers in California have proposed seven interrelated bills that would tighten regulation of for-profit and private colleges.

The goal of the legislative package, bill sponsors say, is to make colleges put student success before profit — and to ensure that fewer students are saddled with debt and low-paying jobs.

One bill would seek to enact a gainful-employment rule, similar to the Obama-era regulation that was based on loan-repayment rates of graduates of career education programs, which the Trump administration rolled back. Another aims to reduce the amount of taxpayer-funded revenue that an institution can generate from 90 percent to 85 percent. It would also give California’s attorney general power to decide whether an institution claiming to be a nonprofit is truly a nonprofit.

It’s not the first time for-profit institutions have been a focus of Democratic politicians in California. But it may be the first time state lawmakers have sought to tighten regulation of online program management (OPM) companies. Other states are considering bills aimed at for-profits, but none have addressed … (continue reading)