For-profit long-distance education has certainly developed quite the reputation. Beginning in the 1970s with correspondence schools that took taxpayer dollars to do little more than send students videos or study materials in the mail,1 for-profit schools have for decades aggressively misled students in order to siphon off government education subsidies. In response, Congress has taken action to stop the flood of taxpayer dollars that were being used for sham degrees: in the mid-1970s, it capped the amount of aid for programs conducted wholly by correspondence at half of the usual Pell Grant, and, in 1992, it made an entire school ineligible for aid if the majority—half or more—of its offerings were correspondence courses.2

The digital age, however, has presented a dilemma for the regulation of long-distance learning. While today’s online education programs (which were originally classified as correspondence courses, because they are conducted at a distance) are seen by visionaries as a way to expand college access, in the wrong hands they can also be a gateway for massive fraud. So, how can Congress give a green light to colleges that want to offer effective, high-quality versions of education-at-a-distance, while keeping in check those programs that amount to little more than giving students a glorified electronic textbook?

Congress drew a line in 2008 between the good and dangerous versions of online education, based on the level of teacher-student interaction.3 If a school’s online program involved “regular and substantive interaction between the students and the instructor,” then it would be treated, for federal aid purposes, just like a course at a brick-and-mortar college. If it did not have regular-and-substantive-interaction, it would be treated like an old-style, low-expectation correspondence school. The requirement was quite modest, since the interaction does not need to be face-to-face or even live; the interaction can be feedback on paper or responses to comments on an online bulletin board. This method of separating wheat from chaff seemed to work fairly well; that is, until the case of Western Governors University (WGU). And now, for-profit opportunists want to use the example of WGU to toss out the distinction Congress set in 2008.

When Exceptions Become Crowbars: Western Governors University

Teachers—real humans who know the subject matter—do matter in education. Students learn best when teachers gauge students’ understanding and prompt reflection and discussion that builds on their understanding. Giving short shrift to teacher-student interactions reduces the quality of education.4 Of course, there are particular courses and groups of students with enormous educational value and a minimum of teacher-student interaction—and whenever they appear, opportunists try to use them to discredit the important role teachers generally play.

A recent audit of online college Western Governors University, and the political response to it, have been just that. Created by a group of governors in 1997, WGU employs a “competency-based” approach, in which students determine for themselves how quickly to work through the material in their courses, with credits conferred based on students’ demonstration of competencies. While students must complete assignments and take proctored tests to earn course credits and, eventually, degrees, there are no scheduled sessions with a teacher and a class of students. Instead, teacher-student interactions occur on an as-needed basis, with additional resources, like videos or computer-based exercises, providing the bulk of the guidance as students progress at their own pace.

To coax and assist students along the curriculum, WGU employs two types of “mentors.” The professor-level mentors are experts in the subject area, help to design the curriculum, and are available to students as they work through the assignments and exams in the course. The other mentors act as coaches, providing encouragement and advice for getting through the program. (These coaches, according to WGU, are highly qualified, with master’s degrees and five years of relevant experience.5)

WGU says that students’ interactions with the two types of mentors, combined, are regular and substantive. However, an audit by the U.S. Department of Education’s internal watchdog disagrees: the coaches, it concluded, do not qualify as instructors, and because the student interactions with the professor-level mentors occur only at the request of the student (and therefore frequently aren’t regular), the courses should be treated as correspondence.6 Some courses of that type would not jeopardize other schools’ eligibility for federal aid, but because these mentored courses are the model for all of WGU’s courses, the school as a whole loses eligibility for federal aid. As a penalty, the auditors recommend a fine of more than a billion dollars.7

Typically such a recommendation against an online school is accompanied by media stories about innocent students who were misled by aggressive recruiters, unemployed graduates who are stuck with loans they cannot repay, and former executives who laughed all the way to the bank. But in WGU’s case we have none of the above. In fact, it seems that the 80,000-student WGU has been doing a pretty good job educating students, and at a fair price.

After leaving school, WGU alumni earn salaries that are similar to other colleges. The school’s student loan default rate is less than half the national average, well below the rate of its fellow nonprofit colleges, and far below the rate of for-profit colleges.8 Fully 30 percent of WGU’s students are self-pay, enrolling without federal aid of any type, providing strong evidence of value to the students for the price.9 And borrowing rates indicate that WGU’s fair-market-price indicator is stronger than those of the majority of private colleges.10

Furthermore, complaints against WGU are relatively few. The U.S. Department of Veterans Affairs reports only six complaints about WGU from GI Bill users, even though more than 4,000 veterans are currently enrolled, a similar number of enrollees to DeVry University Online, which has tallied 200 complaints. The count of borrower defense claims from student loan borrowers who attended WGU is seven—not zero, but the same number as at Liberty University and the University of Southern California.11

Finally, WGU is reasonably priced, passing along the savings from its low-cost approach by keeping tuition down. With tuition revenue of less than $7,000 per student, WGU is charging less than do nine out of ten private colleges, both nonprofit and for-profit.12 WGU actually spends more to support students—for instruction, academic support, and student services—than do many higher-cost for-profit colleges.13

WGU is not trying to scam anyone, and there are not throngs of former students claiming they were misled or provided an inadequate education.

In short, WGU is not trying to scam anyone, and there are not throngs of former students claiming they were misled or provided an inadequate education. The Department of Education is not required to follow the audit’s recommendation, nor should it: WGU should simply pay a minimal fine and agree to make the minor adjustments necessary to meet the regular-and-substantive interaction requirement.14

Think Before You Automate

Sadly, some have exploited the audit’s penalty recommendation with calls to do away with the regular-and-substantive interaction requirement altogether. In a new bill, Rep. Virginia Foxx, the chair of the House Education Committee, is proposing to allow unlimited federally funded creation and expansion of schools without teachers.15 Lobbyists say that the WGU situation shows that the law is preventing innovative computer-mediated learning. Their argument is unfounded, and following it would create a dangerous invitation to fraud and abuse.

First of all, under current law, there is no impediment to colleges using federal aid for fully automated courses, as long as the school also has courses with human teachers. The federal-aid restriction would come into play only if and when robot teaching completely replaces human instruction in the majority of courses at a college.16 That alone should be a sufficient counter to the bill. Consider too, though, the fact that there are lobbyists chomping at the bit for the requirement to be removed—a sure sign of the money to be made from tapping students’ federal aid. If the teacher-student interaction requirement is eliminated, there will be another massive run on the federal treasury by predatory schools—a new welcome mat for charlatans.

This isn’t to say, however, that fully automated education will never be up to snuff. The innovative computer-programs-that-think-and-teach are welcome in higher education now, both in concept and in practice, and are eligible for federal aid for up to half of a college’s operations. But before we change the law to allow for a college run completely on artificial intelligence rather than human teachers, we should get to know these automated surrogates better.

Instead of the current proposal’s made-up “competencies,” my vote would be for sampling real student schoolwork—the papers, quizzes, examinations, and presentations that are the artifacts of learning—and from courses of all instruction types. Indeed, one of the justifications in the 1980s for curtailing aid for correspondence schools was that those programs involve a meager workload for the student,17 a problem that is hardly confined to online and competency-based programs.18 Whether human or robot, there ought to be rigorous peer review of what teachers helps students to produce.

Many colleges already do spot checks of student work, often as part of their regular reviews of majors and departments.19 In fact, all colleges are supposed to be granting course credit, for federal aid purposes, based on student achievements rather than on scheduled lecture hours.20 Several accreditors, however, still allow schools to consider nothing more than scheduled lecture hours for granting students’ course credits, while imposing the student-work expectation only on online programs.21

The federal advisory committee that oversees accreditation should ask accreditors, as they come up for renewal of their federal approval, how they check whether schools are monitoring the rigor of the implemented curriculum. Are all programs checked, regardless of whether they are online or in-person? Are schools required to use external reviewers? Are there elements of random selection, so that the work of any course or professor’s students could be examined, in the same way that a financial auditor chooses a random selection of invoices to confirm that they represent genuine transactions?22

It is anyone’s guess how soon fully automated instruction will gain widespread acceptance. Maybe never. But to prepare for its possible arrival, we should gain experience with more robust and reliable systems of human peer review to test the rigor of our current college programs, so that if and when the robots arrive, we will be able to keep them honest.


  1. See for example Proprietary Vocational and Home Study Schools, Final Report to the Federal Trade Commission and Proposed Trade Regulation Rule, Federal Trade Commission, December 10, 1976, 157,
  2. Both if more than half of the courses are correspondence, or if more than half of the students are taking correspondence courses.
  3. The 50-percent rule was eliminated in 2006, and the regular-and-substantive interaction provision added in 2008. See Chris Kirkham, “John Boehner Backed Deregulation of Online Learning, Leading to Explosive Growth at For-Profit Colleges,” Huffington Post, July 29, 2011 (updated January 23, 2012),
  4. Karen E. Willcox, Sanjay Sarma, Philip H. Lippel, “Online Education: A Catalyst for Higher Education Reform,” MIT Online Education Policy Initiative, April 2016, p. x,
  5. To get your own sense of what a teaching-assistant mentor is like, see this class introduction or this testimony. For a perspective from an accounting student, watch this.
  6. Western Governors University Was Not Eligible to Participate in the Title IV Programs, Final Audit Report ED-OIG/A05M0009, U.S. Department of Education, Office of Inspector General, September 2017,
  7. The audit says “the Department should require the school to return the $712,670,616 in Title IV funds it received from July 1, 2014, through June 30, 2016, and any additional funds it received after June 30, 2016” (emphasis added). Additional federal funds received by WGU in the 2016–17 year would bring the total to over a billion dollars.
  8. In the most recent data reported by the U.S. Department of Education, WGU’s default rate was 4.6 percent, the national average was 11.5 percent, the rate for other nonprofit colleges was 7.4 percent.
  9. The 30-percent figure was provided by WGU. Data that would compare this measure with other schools are not available.
  10. 60 percent of WGU students take out federal student loans. Of other four-year colleges with at least 500 undergraduates, the proportion of institutions with borrowing rates higher than 60 percent is 71 percent at for-profits (179 of 252), 60 percent at nonprofits (597 of 1003), and 26 percent of publics (182 of 692). Author’s analysis of data from the Integrated Postsecondary Education Data System (IPEDS), U.S. Department of Education, National Center for Education Statistics.
  11. Borrower Defense claims data as of August 15, 2017, provided by the U.S. Department of Education in response to a FOIA request.
  12. Total tuition revenue reported in IPEDS 2014, divided by the reported twelve-month full-time equivalent enrollment, is $6,816 per FTE student, which is less than 89 percent of nonprofit degree-granting colleges using federal aid and less than 93 percent of for-profit institutions that use federal aid.
  13. WGU’s spending on instruction, academic support, and student services is $5,002 per student (full-time equivalent). That represents 73 percent of tuition revenue, a higher proportion than more than two-thirds of for-profits. – Author’s analysis of IPEDS, 2014.
  14. WGU has already made changes, describing the coach-mentors as “program mentors” that provide both “instruction and guidance.” See WGU’s “About WGU Faculty” page on their website:
  15. H.R. 4508 allows federal aid for programs that are based on “mastery of competencies,” with a “competency” defined as a “knowledge, skill, or characteristic demonstrated by a student.” There is no requirement for regular and substantive interaction with an instructor (interaction with “faculty” is required only to the extent “necessary,” as okayed by the accreditor).
  16. The WGU situation was sui generis because the entire school is online and competency-based, so the audit’s findings meant it exceeded the 50 percent limit on students enrolled in low-interaction correspondence courses.
  17. The regulations’ justification was that in the programs students who were enrolled supposedly “full time” generally “have a workload comparable to a part-time student.” 50 FR 10713, March 15, 1985, as quoted on page 10 of the OIG audit.
  18. See Derek Bok, Our Underachieving Colleges: A Candid Look at How Much Students Learn and Why They Should Be Learning More, New Edition (Princeton, New Jersey: Princeton University Press, 2007).
  19. For example, the program review process at Cal State Monterey Bay demands the review of samples of student work by both internal and external reviewers. There, the accreditor’s visiting team checked up on the integrity of that process. See “Report of the WASC Visiting Team,” March 15-18, 2011,
  20. The audit (page 11) points out that, contrary to what many colleges believe, there is no federal mandate of “classroom hours or seat time required for a course or program.” Instead, the federal definition of a credit hour, since 2010, has been “amount of work . . . verified by evidence of student achievement.”
  21. Robert Shireman, letter to four accreditors, March 7, 2016,
  22. For example, UC Davis has a plan to randomly select samples of student work from the 4,000 general education courses. The accreditor praised the concept and told the school that “Best practice in undergraduate program review gives external reviewers access to” actual student work. See “Report of the WASC Visting Team,” April 9-11, 2014,