The College Cost Reduction Act (CCRA), a package sponsored by former House Education and the Workforce Committee chairwoman Virgina Foxx (R), purportedly aims to make college more affordable for students and families by overhauling the current federal student loan system and increasing institutional accountability in higher education. First introduced in the House during the 118th Congress in 2024, it did not receive a vote. Since the provisions of the CCRA as introduced in 2024 align with the types of higher education legislation that Republicans will prioritize in the new Congress in 2025—a Congress with a Republican majority in both the House and the Senate—it is anticipated that a version of the CCRA could soon be reintroduced.
Improving college accountability and affordability is something both parties have called for. However, the manner in which the CCRA aims to improve college accountability and affordability is flawed, and some of the measures it includes would actually be counterproductive to those goals. For example, the CCRA contains several provisions that actually stand to increase college costs for students by repealing regulations that protect students from inflated college costs.
Some particularly troubling aspects of the CCRA are the provisions concerning online education, which aim to codify incentive compensation for student recruitment and enrollment and to exempt online program managers (OPMs) from regulation and oversight.
For years, TCF has outlined the need for federal action to protect students in the online higher education environment from high-cost, low-value programs and predatory recruitment practices. In particular, TCF has asked the U.S. Department of Education to restore the prohibition on “incentive compensation” in the Higher Education Act by rescinding the 2011 Bundled Services Guidance—guidance that creates a loophole that allows for-profit OPMs to receive “bounty payments” for each student they recruit into an online program. TCF has also called on the Department of Education to improve oversight over these companies by extending their regulations on third-party servicers to include OPMs. This would enable the department to track which federal dollars are going to OPM-operated programs.
Rather than protect students from low-quality online programs and predatory practices, the CCRA includes provisions that would do the exact opposite, essentially making the CCRA a gift to for-profit OPMs at the expense of students and taxpayers.
First, the CCRA seeks to enshrine into law the current guidance loophole permitting “bounty payments” to for-profit companies that recruit students into online programs. Under the CCRA, incentive compensation will be allowed when the third-party provider offers recruiting or admissions activities as part of a bundle of services. This provision specifically codifies the 2011 Bundled Services Guidance and will leave OPMs incentivized to aggressively recruit students. Since OPMs will be eligible to receive a cut of the tuition for each student they recruit into an online program, not only will this provision reward predatory practices, these arrangements may also result in inflated tuition costs for students.
Second, the CCRA limits the definition of a third-party servicer in Department of Education regulations that permit oversight and monitoring by the department to exclude companies that provide marketing and recruiting. As OPMs often conduct marketing and recruiting in order to fill seats in online programs, this provision would exempt OPMs from oversight by the department. Perhaps the most concerning component of this provision is the stipulation that the U.S. secretary of education cannot move to further regulate the definition of a third-party servicer. Thus, the CCRA would protect OPMs from reporting requirements, annual audits, and sharing joint liability with the institution for any misconduct, in perpetuity as law as the law is in force.
On Tuesday, January 14, in one of the final days of the Biden administration, the Department of Education took a step in the right direction when it released a Dear Colleague Letter confirming that certain common practices by OPMs are illegal under department regulations prohibiting misrepresentations. For example, the letter notes that institutions and their OPMs cannot misrepresent program quality or misrepresent OPM employees as employees of the institution.
The department’s guidance on OPMs underscores the need for more oversight of OPMs and stronger enforcement of federal regulations to prevent OPM misconduct. Unfortunately, the CCRA is a step in the opposite direction. While the CCRA is presented by its sponsors as addressing the inflated cost of college degrees for students, these regulatory provisions instead would prioritize the well-being of for-profit companies over students and taxpayers allowing them to operate unchecked and unaccountable, to continue to receive a slice of student tuition, and to remain incentivized to engage in aggressive and abusive marketing. If the CCRA package is reintroduced in the 119th Congress, these harmful online provisions must be removed.
Tags: college costs, online education, college affordability
College Cost Reduction Act Puts For-Profit Companies before Students
The College Cost Reduction Act (CCRA), a package sponsored by former House Education and the Workforce Committee chairwoman Virgina Foxx (R), purportedly aims to make college more affordable for students and families by overhauling the current federal student loan system and increasing institutional accountability in higher education. First introduced in the House during the 118th Congress in 2024, it did not receive a vote. Since the provisions of the CCRA as introduced in 2024 align with the types of higher education legislation that Republicans will prioritize in the new Congress in 2025—a Congress with a Republican majority in both the House and the Senate—it is anticipated that a version of the CCRA could soon be reintroduced.
Improving college accountability and affordability is something both parties have called for. However, the manner in which the CCRA aims to improve college accountability and affordability is flawed, and some of the measures it includes would actually be counterproductive to those goals. For example, the CCRA contains several provisions that actually stand to increase college costs for students by repealing regulations that protect students from inflated college costs.
Some particularly troubling aspects of the CCRA are the provisions concerning online education, which aim to codify incentive compensation for student recruitment and enrollment and to exempt online program managers (OPMs) from regulation and oversight.
For years, TCF has outlined the need for federal action to protect students in the online higher education environment from high-cost, low-value programs and predatory recruitment practices. In particular, TCF has asked the U.S. Department of Education to restore the prohibition on “incentive compensation” in the Higher Education Act by rescinding the 2011 Bundled Services Guidance—guidance that creates a loophole that allows for-profit OPMs to receive “bounty payments” for each student they recruit into an online program. TCF has also called on the Department of Education to improve oversight over these companies by extending their regulations on third-party servicers to include OPMs. This would enable the department to track which federal dollars are going to OPM-operated programs.
Rather than protect students from low-quality online programs and predatory practices, the CCRA includes provisions that would do the exact opposite, essentially making the CCRA a gift to for-profit OPMs at the expense of students and taxpayers.
First, the CCRA seeks to enshrine into law the current guidance loophole permitting “bounty payments” to for-profit companies that recruit students into online programs. Under the CCRA, incentive compensation will be allowed when the third-party provider offers recruiting or admissions activities as part of a bundle of services. This provision specifically codifies the 2011 Bundled Services Guidance and will leave OPMs incentivized to aggressively recruit students. Since OPMs will be eligible to receive a cut of the tuition for each student they recruit into an online program, not only will this provision reward predatory practices, these arrangements may also result in inflated tuition costs for students.
Second, the CCRA limits the definition of a third-party servicer in Department of Education regulations that permit oversight and monitoring by the department to exclude companies that provide marketing and recruiting. As OPMs often conduct marketing and recruiting in order to fill seats in online programs, this provision would exempt OPMs from oversight by the department. Perhaps the most concerning component of this provision is the stipulation that the U.S. secretary of education cannot move to further regulate the definition of a third-party servicer. Thus, the CCRA would protect OPMs from reporting requirements, annual audits, and sharing joint liability with the institution for any misconduct, in perpetuity as law as the law is in force.
On Tuesday, January 14, in one of the final days of the Biden administration, the Department of Education took a step in the right direction when it released a Dear Colleague Letter confirming that certain common practices by OPMs are illegal under department regulations prohibiting misrepresentations. For example, the letter notes that institutions and their OPMs cannot misrepresent program quality or misrepresent OPM employees as employees of the institution.
The department’s guidance on OPMs underscores the need for more oversight of OPMs and stronger enforcement of federal regulations to prevent OPM misconduct. Unfortunately, the CCRA is a step in the opposite direction. While the CCRA is presented by its sponsors as addressing the inflated cost of college degrees for students, these regulatory provisions instead would prioritize the well-being of for-profit companies over students and taxpayers allowing them to operate unchecked and unaccountable, to continue to receive a slice of student tuition, and to remain incentivized to engage in aggressive and abusive marketing. If the CCRA package is reintroduced in the 119th Congress, these harmful online provisions must be removed.
Tags: college costs, online education, college affordability