A deal between UC Berkeley and 2U, Inc., an online education company, recently received backlash concerning details of a 2013 contract.
Under the contract, 2U, Inc. agreed to pay campus 14 installments of $300,000 for a 15-year contract, totaling in a $4.2 million deal. The agreement provides 2U, Inc. with a list of denied applicants and accepted applicants who turned down admission to campus’ School of Information after consenting on the school’s website to receive information about a similar program offered through 2U, Inc. at Southern Methodist University.
2U, Inc., which provides online services to both universities, was given permission from campus to cross-market the SMU program to the listed students.
“2U pays the (School of Information) for the right to share information about other data science programs with prospective students who have given their consent to be contacted,” said campus spokesperson Janet Gilmore in an email.
In regards to compensation, the contract states campus is “allowed to use all amounts at its sole exclusive discretion.” Gilmore said in the email the funds received through this agreement help support campus programs.
Brett Herda, a team member of Make College Cheaper — an online financial aid calculator — questioned 2U’s annual $300,000 payment to campus. He alleged in a Twitter direct message that 2U, Inc. implicitly uses funds from their deal with SMU to pay campus for their contract, potentially involving denied UC Berkeley applicants’ money in an institution they were rejected from.
However, the contract detailed 2U, Inc. would initially receive $39,000 for each of the 499 full-time-equivalent students enrolled in the campus program every fiscal year, and less the following years.
“2U’s marketing and recruiting efforts follow industry best practices and policies to ensure prospective students only receive outreach if they request information about a specific program and/or similar programs at other universities,” said a 2U spokesperson in an email.
In the email, the 2U spokesperson noted the consent efforts outlined in the contract. The deal was renegotiated in 2015 to include the right to share information about SMU’s data science programs with prospective UC Berkeley students who consented to receive the information.
The spokesperson added that students may opt out of these notifications of programs at any time.
“2U uses those leads to sell an expensive SMU degree,” Herda alleged in a Twitter direct message. “The SMU students are paying for those leads, and 100 out of 110 are taking out GradPLUS loans to pay for the degree.”
Campus stated that neither the School of Information nor campus receives money from or is involved in a contractual relationship with SMU. SMU was unable to comment on the accusations.