Flying under the Regulation Radar: University Partnerships with Coding Bootcamps

Bootcamps—for-profit, unaccredited, short-term educational programs—have continued to find new university partners during the pandemic. These partnerships have been especially lucrative for coding bootcamps—a popular variant that teaches computer programming—who typically collect 80 percent of the revenue generated from the program and who use the partnerships to gain exemptions from state regulations. But the lack of oversight of these partnerships is cause for concern, especially given past abuses in the industry.

The most recent coding bootcamp boom took place after the 2008 financial crisis and aimed to teach people how to code, quickly. The programs are typically¹ less than a year in length, don’t award college credit or certifications, and often have built-in career support to help students find jobs after they complete the course.

Coding bootcamps historically have followed a boom and bust trajectory. In 2017, one of the earliest coding bootcamps to arrive on the scene, Dev Bootcamp, shut down,² and many competitors³ soon followed. At the time, questions were raised about the ability of coding bootcamps to enroll students consistently and find sustainable business models.⁴

But the pandemic has breathed new life into the format, as has a new business model, wherein bootcamps partner with accredited colleges and universities instead of competing with them. University partnerships with bootcamps have exploded during the pandemic, according to the research firm HolonIQ,⁵ with 2020 seeing eighty-five new bootcamp partnerships in the United States, slightly more than double the forty-two new bootcamp partnerships in 2019.

These partnerships have proven attractive to universities, not least because they provide a source of consistent revenue for institutions struggling to meet enrollment goals⁶ amidst the pandemic. Typically, the bootcamp is responsible for all academic aspects of running the program, such as instruction and curriculum, while the university’s role is limited to providing its brand for marketing and (prior to the pandemic) providing classroom space. But the partnerships are extraordinarily lucrative for coding bootcamps, who typically take around 80 percent of the revenue generated from the programs, and who gain access to the institutions’ powerful, already existing brand for use in recruiting students.

The lack of oversight over these programs is especially concerning given the federal government’s expression of interest in creating new funding sources⁷ for short-term educational programs. While students enrolled in coding bootcamps are unable to finance their education through federal student loans, veterans can use federal money to enroll in coding bootcamps through the Veteran Administration’s VET TEC⁸ program, and the Obama administration launched two programs⁹ that provided federal funding to coding bootcamps. During the pandemic, bipartisan legislation was introduced in the Senate to create a new tax credit¹⁰ students could use to attend coding bootcamps and other short-term programs. Such prominence and subsidization of bootcamps makes the bolstering of oversight an urgent matter.

In this report, we continue TCF’s pioneering analyses of these and similar contracts by taking a closer look at bootcamp–university partnerships, why they pose a threat to consumers without proper regulation, and how they have thus far taken advantage of regulatory blindspots. We conclude with some policy recommendations that would boost government oversight and significantly mitigate the threat to students and universities alike.

Lucrative Contracts

Building off The Century Foundation’s previous analyses in 2017¹¹ and 2019¹² of university contracts with third-party education providers, we submitted public records requests for copies of university contracts with coding bootcamps. In many cases, universities responded with contracts that redacted the details of how the financial arrangement between bootcamps and universities worked. However, in cases where the universities didn’t redact their contracts, the contracts showed that the revenue from the program was typically split in a revenue-sharing agreement. Typically, the university would receive 20 percent of the revenue while the bootcamp would receive 80 percent. Table 1, below, shows some examples of the agreements we received.

Table 1

Compared to other contracts, an 80 percent revenue share puts bootcamps in the upper echelon of online program manager (OPM) contracts when it comes to revenue percentages: the average revenue share among OPMs overall is around 50 percent.¹⁸ This can be explained by the lack of involvement universities have in running the bootcamp. The value that a bootcamp program offers to its university partner is that it is essentially a program in a box, meaning that the bootcamp provider is able to set up and run the program with little to no work required¹⁹ from their university partner.

The contracts we received, and cite in this report, follow these trends. In them, the coding bootcamp is typically responsible for the academic aspects of running the program, including hiring instructors and providing curricula. In some cases, the contracts give the university the right to reject specific course materials or instructors. In Trilogy’s contract with the University of California Riverside, for example, Trilogy agrees to provide the course material²⁰ and to select instructors,²¹ although the University of California Riverside is given final approval over both. Likewise, HackerU agrees to provide the instructors²² and the curricula²³ needed to run its partnership with the University of Central Florida, although the University of Central Florida is also given final approval over both.

However, other contracts specifically bar the university from exercising control over the operations of the program. For example, Fullstack Academy’s contract with California Polytechnic State University specifically notes that the “University Partner shall not intentionally or otherwise take any action to supervise or control Assigned Staff, including hiring or firing, promotion, demotion, setting wage rates or salary or providing benefits of employment or other control or direction of Assigned Staff. University Partner will not exercise any control or direction over the methods by which Fullstack or Assigned Staff perform Services or Additional Services hereunder.” The lack of oversight into the operation of the program is concerning, and could put the university’s reputation at risk if the program does not live up to the university’s own academic standards.

In terms of marketing arrangements, the bootcamps are always branded with the university’s name and logo, even though the bootcamp typically is responsible for the actual instruction.

The universities’ roles are typically limited to two areas: marketing, and, prior to the pandemic (after which many programs moved online), providing classroom space. In terms of marketing arrangements, the bootcamps are always branded with the university’s name and logo, even though the bootcamp typically is responsible for the actual instruction. Often, the university is required to market the program similarly to how it markets the other programs it offers, such as including the program on its website.²⁴

But even though the university’s identity is used, by and large, the universities tend to leave the actual work of marketing the program up to the bootcamp provider. In Trilogy’s contract with the University of California Riverside, Trilogy is responsible for “independently marketing the Program utilizing the UNIVERSITY’s brand,” although the University of California Riverside must give prior approval for any use of its brand in Trilogy’s marketing.²⁵ One exception is Stack Education’s contract with Worcester State University, in which Worcester State University takes responsibility for promoting the program to prospective students.²⁶

It is easy to see how this arrangement can lead to confusion among students: from the consumer’s end, all appearances indicate that the product on offer is chiefly a university product. This is, arguably, intentionally deceptive, and the contracts are frequently explicit about the need to maintain the illusion. Trilogy’s contract with the University of California Riverside, for example, specifies that Trilogy can only be referred to as a “partner of or service provider to” and not “the primary Program provider,”²⁷ which, as we have seen, simply isn’t true.

Overall, the appeal of these contracts appears to be that, in exchange for lending out its brand, the university gains access to a consistent source of revenue despite not having to take on additional instruction-related responsibilities, and very few new administrative ones, either.

Regulatory Blind Spots: Practice Differs from Theory in Accreditor Oversight

Higher education is regulated by three entities: the federal government, state governments, and accrediting agencies. Bootcamps, like other certificate or short-term programs that don’t offer academic credits, are ineligible for most (but not all) federal funding, and typically aren’t regulated by the federal government; they are, however, usually under scrutiny from state governments. Most states have a system where for-profit education and training providers are required to register with and be reviewed by a regulatory agency.

New York, through its Bureau of Proprietary School Supervision (BPSS)²⁸ and California, through its Bureau for Private Postsecondary Education²⁹ (BPPE), have both been very aggressive about regulating coding bootcamps. For example, Flatiron School was fined in 2017³⁰ by BPSS, while Holberton School,³¹ Lambda School,³² and Dev Bootcamp³³ all faced regulatory action from BPPE. The reasons for regulatory action were quite serious. Flatiron was accused of improperly marketing³⁴ its student outcome statistics. Holberton School had no instructors,³⁵ and charged $85,000 in upfront tuition.³⁶

Some privately operated bootcamp programs are offered on behalf of colleges or universities, which is where accrediting agencies come in. These arrangements take place via contractual agreements³⁷ between public and private nonprofit universities and private, third-party bootcamp companies. To ensure a basic level of quality, institutional accreditors are tasked with verifying that colleges are providing sound academic programs and have sustainable operations, finances, and governance structures. Despite the college accreditation process, it is unclear what level of review is given to university–bootcamp partnerships. In other words, by partnering with accredited universities, bootcamp providers may have effectively hidden themselves from regulatory scrutiny. The reason for this is that bootcamps are usually offered via a college’s extension school, and accreditors and other public and nonprofit college oversight boards may pay less attention to the programs and contractual arrangements happening at extensions than they give to the main campus.

By partnering with accredited universities, bootcamp providers may have effectively hidden themselves from regulatory scrutiny.

Extension schools are by definition a constituent part of a degree-granting college or university. As such, when accreditation is granted to a university, it is also granted to its extension school. Therefore, accreditors are responsible for verifying that member institutions hold academic control and are responsible for the quality and outcomes of the programs offered. However, it is unclear the extent to which coding bootcamps are specifically reviewed by accreditors. While one accreditor indicated extension school review falling under its substantive change review process, others indicated that extension schools are either evaluated as part of an institution’s broader review when applying for accreditation, or not at all if they offer non-credit courses.³⁸ Out of the twenty-six accreditation review reports of California schools with extension schools listed on the Western Association of Schools and Colleges Senior College and University Commission’s (WSCUC) website, seven explicitly referenced extension schools. Others either did not mention extension programs or only referenced their existence. A 2019 UCLA accreditation review report noted that the UCLA Extension could serve as a useful revenue source, but made no mention of extension programs beyond this.³⁹

It may be that programs that do not lead to academic credit warrant less scrutiny from an accreditation review team; however, it is important to note that accreditation applies to the entire institution, which includes extension campuses, and that colleges are responsible for all programs offered in their name, whether they offer credits or not. All the same, when a private bootcamp is offered by an accredited college or university, it seems to become exempt from the usual state regulation of private postsecondary programs. What is the cause of this pattern? To learn more about this potential blindspot, The Century Foundation reached out to several state agencies tasked with regulating coding bootcamps, and received responses from California’s BPPE, New York’s BPSS, and the Georgia Nonpublic Postsecondary Education Commission (GNPEC).

In California, a BPPE spokesperson told The Century Foundation that whether a bootcamp partnership would be regulated by the BPPE depends on whether the students’ enrollment agreements are signed with the university or with the private bootcamp provider. “If the student signs an agreement with a private postsecondary institution in California, that institution must be approved by the Bureau for Private Postsecondary Education and the student is protected by the Bureau’s laws, unless otherwise exempt,” said the BPPE spokesperson. “However, if the student’s enrollment agreement is with the public institution offering classes through a partnership with a private postsecondary institution [bootcamp provider], the private postsecondary institution would not be subject to Bureau approval or under the Bureau’s jurisdiction. It would be incumbent on the public university’s oversight agency to ensure the quality of education is provided.”

In New York, a BPSS spokesperson told The Century Foundation that, similar to the conditions in California, whether a coding bootcamp partnering with a university would need to register with BPSS was context-dependent, but that the conditions were myriad. “Whether or not a particular contractual relationship between a degree granting institution and a coding bootcamp provider would result in the provider not needing to be licensed by BPSS could depend upon any of a number of factors,” said the spokesperson, “including but not limited to; the details of the particular contract, which party is offering the program, and the scope and nature of the relationship between the parties.” In every contract TCF obtained, the bootcamp provided the program as well as the instruction, and in most cases split revenue with the institution.

In Georgia, a GNPEC spokesperson told The Century Foundation that the situation was dependent on whether the students were paying tuition to the university or to the bootcamp. “If the bootcamp is partnering with the institution in that the institution is managing all the administrative and financial components, such as enrollment, student files, and tuition collection, and the institution ‘hires’ the bootcamp company to simply provide the education and then pay the bootcamp on behalf of each student, that could be potentially exempted,” said the spokesperson. “This means that the bootcamp may not enroll students and collect tuition itself, and it cannot enroll anyone from the general public: only students sent and paid for by the public or authorized institution.”

But the Georgia spokesperson appeared to draw the line at arrangements where students paid the bootcamp directly. “If the bootcamp is simply recruiting the institution’s students by an advertised ‘partnership’, but the students pay the bootcamp directly, this will not qualify for exemption,” the spokesperson continued. In nearly every bootcamp contract TCF has obtained, mostly with Trilogy Education Services, students pay the bootcamp directly, and the bootcamp then pays the university its portion of the tuition share.

Thus we can see that, in the vast majority of the cases TCF has considered, the bootcamps are partnered with accredited colleges, but are operating in the same way they would without the partnership, i.e., are providing the instruction and receiving tuition directly from students, essentially operating as separate entities from their partner institution, but doing so without scrutiny from state regulators. As these programs perform functions that would normally fall within regulators’’ jurisdiction, they ought to be scrutinized accordingly.

An additional line of oversight should come from the governing boards of the schools themselves—that is, the university trustees and regents. These partnerships generate revenue for public universities, and frequently do so without much required from the university in terms of labor or resources. Thus, bootcamps’ convenience and short-term profitability may make them seem less consequential to busy trustees, especially if it is assumed that accreditors are vetting academic and operational quality. Whatever the case, it is clear that bootcamps are frequently flying under the regulatory radar, and that regents and trustees aren’t scrutinizing the programs either. The combination leaves prospective students in a very precarious situation.

In many states, coding bootcamps can evade the regulatory radar by forming partnerships with universities, even if the bootcamp operates in a similar manner to how it would operate as an independent entity; and furthermore, the easy revenue that the partnerships generate for public institutions may encourage relaxed scrutiny and, as a flipside of the same coin, discourage the development of stricter, less conditional regulations.

In summary, in many states, coding bootcamps can evade the regulatory radar by forming partnerships with universities, even if the bootcamp operates in a similar manner to how it would operate as an independent entity; and furthermore, the easy revenue that the partnerships generate for public institutions may encourage relaxed scrutiny and, as a flipside of the same coin, discourage the development of stricter, less conditional regulations. This relaxed enforcement on coding bootcamp partnerships appears to be something of which many bootcamps are taking advantage. In the University of California Riverside contract with Trilogy, for example, the university is the entity responsible for obtaining regulatory approval for the program.⁴⁰ With this arrangement, Trilogy gets all of the benefit while putting in less work than it would otherwise, both in terms of regulations—because the university is responsible for compliance—and in terms of student recruitment, thanks to the use of a well-respected public institution’s name.

Policy Recommendations

Two groups are already charged with the oversight of coding and other third-party bootcamps, and should pay closer attention to the ones offered by public universities: state and local officials that oversee the universities themselves, and the institutions’ accreditors. They should take the following steps to improve their oversight.

1.  Institutional accreditors, already tasked with reviewing extension schools, should task their review teams with closer scrutiny of the programs and operations throughout an institution even for non-credit programs, especially when outsourcing is involved.⁴¹
2.  Where programs are wholly offered by a private provider in the name of a public or nonprofit university, and especially in cases where the student pays for or finances the cost via the third party, state regulators should require the same registration and review process as any other private training provider.
3.  Public and nonprofit university governing boards should require the same review and approval process they use for other newly proposed programs, even if the program does not require a line item in the operating budget. Likewise, when administrators propose to outsource existing programs, some level of governing review is ideal.
4.  Finally, as they should with any form of outsourcing of academic programs, accreditors and regulators should evaluate contracts with coding bootcamps for the level of risk⁴² they pose to the institution and students.

Conclusion

At their best, coding bootcamps are an exciting opportunity to place students in high paying jobs, at significantly less time and cost compared to a traditional four year degree. But students deserve oversight that ensures coding bootcamps are living up to their promises.

1. Caren A. Arbeit, Alexander Bentz, Emily Forrest Cataldi, and Herschel Sanders, “Alternative and Independent: The Universe of Technology-Related ‘Bootcamps,’” RTI International, February 2019, https://www.rti.org/rti-press-publication/alternative-and-independent/fulltext.pdf.
2. Tony Wan, “Unable to ‘Reach a Sustainable Business Model,’ Dev Bootcamp Will Shut Down in December,” Ed Surge, July 12, 2017, https://www.edsurge.com/news/2017-07-12-unable-to-reach-a-sustainable-business-model-dev-bootcamp-will-shut-down-in-december.
3. Steve Lohr, “As Coding Boot Camps Close, the Field Faces a Reality Check,” The New York Times, August 24, 2017, https://www.nytimes.com/2017/08/24/technology/coding-boot-camps-close.html.
4. Steve Lohr, “As Coding Boot Camps Close, the Field Faces a Reality Check,” The New York Times, August 24, 2017, https://www.nytimes.com/2017/08/24/technology/coding-boot-camps-close.html.
5. “1,377 University Partnerships. OPM & Bootcamp PPPs.” HolonIQ, February 9, 2021, https://www.holoniq.com/notes/1377-university-partnerships.-opms-bootcamps-and-the-academic-ppp-acceleration./
6. Elissa Nadworny, “’Losing A Generation’: Fall College Enrollment Plummets For 1st-Year Students,” NPR, December 17, 2020, https://www.npr.org/2020/12/17/925831720/losing-a-generation-fall-college-enrollment-plummets-for-first-year-students.
7. Robert Shireman, “Fast-Track Job Training: How to Make the Shortcut Work,” The Century Foundation, June 2, 2021, https://tcf.org/content/commentary/fast-track-job-training-make-shortcut-work/.
8. “Veterans technology education courses,” U.S. Department of Veterans Affairs, https://www.va.gov/education/about-gi-bill-benefits/how-to-use-benefits/vettec-high-tech-program/.
9. “Educational Quality through Innovative Partnerships (EQUIP),” Office of Educational Technology, https://tech.ed.gov/equip/.
10. S.3779 Skills Renewal Act, https://www.congress.gov/bill/116th-congress/senate-bill/3779/summary/00.
11. Margaret Mattes, “The Private Side of Public Higher Education,” The Century Foundation, August 7, 2017, https://tcf.org/content/report/private-side-public-higher-education/.
12. Stephanie Hall and Taela Dudley, “Dear Colleges: Take Control of Your Online Courses,” The Century Foundation, September 12, 2019, https://tcf.org/content/report/dear-colleges-take-control-online-courses/?session=1.
13. UC Riverside University Extension Professional Studies Frequently Asked Questions, https://bootcamp.extension.ucr.edu/faq/#1564084227839-6d1af60e-e712.
14. Worcester State University Coding Certificate Bootcamp landing page https://www.wsucode.com/.
15. University of Central Florida Cyber Defense Professional Certificate landing page https://cybersecurity.ce.ucf.edu/the-programs/professional-course/.
16. Cal Poly Extended Education Coding Bootcamp landing page, https://bootcamp-extended.calpoly.edu/coding.
17. University of North Florida Coding Bootcamp landing page, hhttps://bootcamp.unf.edu/coding.
18. Stephanie Hall and Taela Dudley, “Dear Colleges: Take Control of Your Online Courses,” The Century Foundation, September 12, 2019, https://tcf.org/content/report/dear-colleges-take-control-online-courses/?session=1.
19. Natalie Schwartz, “More colleges are partnering with boot camps to tap demand for short-term programs, Higher Ed Dive, February 1, 2021, https://www.highereddive.com/news/more-colleges-are-partnering-with-boot-camps-to-tap-demand-for-short-term-p/594295/.
20. Trilogy contract with University of California Riverside: “TES shall provide the course materials required for the Program subject to review and approval by the UNIVERSITY”
21. Trilogy contract with University of California Riverside: “TES will select instructors who will be presented to UNIVERSITY for evaluation and approval.”
22. HackerU contract with University of Central Florida: “HackerU will supply UCF CE with qualified, trained instructors… all Program Instructors shall be reviewed and approved by UCF CE”
23. HackerU contract with University of Central Florida: “HackerU shall provide the curriculum, syllabi, and all content and materials… The Program Content for each Program shall be approved by UCF CE”
24. Trilogy contract with University of California Riverside: “UNIVERSITY shall market the Program according to its standard marketing practices for similar non-credit programs, including in its printed materials and on its website.”
25. Trilogy contract with University of California Riverside: “TES agrees that any use of UNIVERSITY’s brand will be subject to UNIVERSITY’s prior approval and such restrictions on the use of said brand as UNIVERSITY in its sole discretion may determine which will include a limited, nontransferable license on terms and conditions established by UNIVERSITY.”
26. Stack Education contract with Worcester State University: “Stack Education will lead and provide the content & instruction for each program. Worcester State University will lead all marketing efforts, with assistance from Stack Education in the form of course descriptions & providing examples of marketing materials.”
27. Trilogy contract with University of California Riverside: “Parties agree that the Program shall be marketed by the UNIVERSITY and TES utilizing the UNIVERSITY brand and that TES shall be referred to in all marketing and publicity as a partner of or service provider to the UNIVERSITY but not the primary Program provider.”
28. New York State Education Department Adult Career and Continuing Ed Services, http://www.acces.nysed.gov/bpss/welcome-career-training-proprietary-schools.
29. Bureau for Private PostSecondary Education, https://www.bppe.ca.gov/.
30. Joe Mullin, “One of the original coding schools must pay $375k over employment claims,” October 19, 2017, https://arstechnica.com/tech-policy/2017/10/one-of-the-original-coding-schools-must-pay-375k-over-employment-claims/.
31. Emma Rindlisbacher, “Priyanka Chopra’s Favorite Coding Bootcamp Accused of ‘Fraud’,” Daily Beast, January 28, 2020, https://www.thedailybeast.com/priyanka-chopras-favorite-coding-bootcamp-holberton-accused-of-fraud.
32. Rosalie Chan, “A California official says red-hot coding bootcamp Lambda School is violating state law if it operates without the right registration — but the company insists classes can go on,” Business Insider, https://www.businessinsider.com/lambda-school-california-state-law-coding-bootcamp-y-combinator-2019-8.
33. Associated Press, “California cracks down on computer boot camps,” USA Today, January 31, 2014, https://www.usatoday.com/story/tech/2014/01/31/california-computer-boot-camps-cited/5078521/.
34. Joe Mullin, “One of the original coding schools must pay $375k over employment claims,” October 19, 2017, https://arstechnica.com/tech-policy/2017/10/one-of-the-original-coding-schools-must-pay-375k-over-employment-claims/.
35. Avi Asher-Schapiro, “Skin in the Game,” Harper’s Magazine, https://harpers.org/archive/2020/12/skin-in-the-game-wall-street-student-debt-crisis/.
36. Emma Rindlisbacher, “Priyanka Chopra’s Favorite Coding Bootcamp Accused of ‘Fraud’,” Daily Beast, January 28, 2020, https://www.thedailybeast.com/priyanka-chopras-favorite-coding-bootcamp-holberton-accused-of-fraud.
37. Stephanie Hall and Taela Dudley, “Dear Colleges: Take Control of Your Online Courses,” The Century Foundation, September 12, 2019, https://tcf.org/content/report/dear-colleges-take-control-online-courses/?session=1.
38. Reviewed policies of the regional accreditors: Higher Learning Commission, Middle States Commission on Higher Education, New England Commissioner of Higher Education, Northwest Commission on Colleges and Universities, Southern Association of Colleges and Schools Commission Colleges.
39. 2019 Report of the WSCUC Team For Reaffirmation of Accreditation of the University of California Los Angeles, https://documentcloud.adobe.com/link/review?uri=urn:aaid:scds:US:e8982a81-a156-4df1-988b-3e4a730e1131.
40. Trilogy contract with University of California Riverside: “UNIVERSITY agrees that any state education agency or other governmental or accrediting agency license or approval (“Education Approval”) required for the UNIVERSITY to offer or market the Program is the sole responsibility of the UNIVERSITY and, to the fullest extent permitted by law, shall incorporate the Program under its current UNIVERSITY Educational Approvals.
41. Alejandra Acosta, Taela Dudley, Stephanie Hall, and Amy Laitinen, “Outsourcing Online Higher Ed: A Guide for Accreditors,” June 28, 2021, https://tcf.org/content/report/outsourcing-online-higher-ed-guide-accreditors/.
42. Alejandra Acosta, Taela Dudley, Stephanie Hall, and Amy Laitinen, “Outsourcing Online Higher Ed: A Guide for Accreditors,” June 28, 2021, https://tcf.org/content/report/outsourcing-online-higher-ed-guide-accreditors/.

Tags: higher education, online program managers, for profit college, Coding bootcamp