New Higher Education Regs Discriminate, Block Established Organizations from Innovating

Just last week, the Department of Education released its final regulations designed to crack down on the practice of colleges incentivizing recruiters based on either the number of students they were able to enroll in postsecondary institutions or the number of students they were able to help secure Title IV financial aid. The intention is to eliminate the abuses in which institutions enrolled students who had little hope of graduating or paying back their student loans and in essence were enrolling under the guise of what was a false hope.

The regulations go into effect in July of this year — and as that date has approached since the initial draft regulations were released last year, confusion and uncertainty over what will and will not be allowed have grown.

To deal with this, the Department of Education issued a letter in March clarifying the intent of the regulations and giving specific examples as to what would and would not be permissible. In clarifying the regulations though, the Department appears to have lashed out and stacked the deck unfairly against the early innovators and leaders in the online learning world of higher education, who—like all incumbents facing the innovator’s dilemma—already have internal reasons working against them in making this transformation. With the right leadership at the helm, however, these institutions could make the transition, which means that the Department of Education’s actions are at best short-sighted, as they will prevent those institutions that have far-sighted leaders from taking their institution’s know-how into the next evolution of online learning.

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