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To boil this down, there are essentially two different realities: one for corporations and another for students and borrowers.
2U and its creditors have the chance to restructure and start fresh. Students do not have the same speedy opportunity, and instead will have to shoulder the high student debt burdens incurred from enrolling in 2U’s programs.
The Higher Education Act is supposed to provide a safety net as an alternative to bankruptcy—and cancel debt automatically when schools close or fail. Unfortunately, for tens of thousands of 2U students, there is ambiguity about whether these protections apply. Should 2U close, these students could be left to navigate the fallout on their own, saddled with loans for educational programs that may not hold the value they were promised.
While 2U pursues bankruptcy protection, many questions remain about what the soon-to-be-private company will look like afterwards—and what will happen to borrowers. Universities and policymakers must scrutinize colleges’ partnerships with third-party online program managers like 2U and ensure that providing a quality education for its students is never sacrificed for the sake of corporate gain. At the same time, students need stronger protections, better oversight, and real recourse to shield them from the fallout of such corporate failures.
As we have repeatedly urged, it is long past time for policymakers to protect students. Read our blog to see the questions federal and state regulators should be asking.
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