US Department of Education Opens Financial Aid to Students in ‘Bootcamps’ and Non-Institutional Programs

US Department of Education Opens Financial Aid to Students in ‘Bootcamps’ and Non-Institutional Programs


Here’s a conundrum: The smaller the college, the fewer resources it has to experiment with different models to meet the demands of a rapidly changing workforce. At the same time, students are increasingly eyeing “bootcamps” and non-institutional providers that promise industry-relevant skills—but may not be able to afford their costs.

Ted Mitchell, Under Secretary of Education at the US Department of Education, thinks he has an answer. Today he is announcing that the federal government will loosen restrictions on schools that work with “alternative education providers,” including massive online open course (MOOCs) developers and coding bootcamps.

Here’s the kicker: Students enrolled in select programs can be eligible for Title IV federal financial aid.

The US Department of Education has launched the “Educational Quality through Innovation Partnerships” (EQUIP) pilot, open to carefully selected colleges or universities that work with non-institutional providers to create new programs. These partnerships must include an independent, third-party “Quality Assurance Entity” of the school’s choosing that will monitor and evaluate the program’s rigor. The school’s accrediting agency must also approve.

New Models, New Rules

The plan is sure to spark controversy. The pilot program proposes to waive existing rules that prohibit colleges that offer federal student aid from outsourcing 50 percent or more of their content and instruction to un-accredited, outside organizations. This means that an entire program—including curriculum, assessment and faculty—could be provided by an outside company.

The EQUIP pilot will offer colleges the flexibility to create programs that they otherwise would not be able to afford, says Mitchell, former president of Occidental College in Los Angeles. “This is a way for campuses to be able to innovate without using their own resources and to build a partnership that will create more robust opportunities,” he said in an interview with EdSurge.

Making federal aid available for new types of public-private post-secondary offerings, he believes, “represents a critical first step in broadening access to high-quality programs.” Today, about 30 percent of US adults hold a bachelor’s degree but those degrees are not distributed evenly to all: Wealthier students are eight times more likely to get a degree by age 24 than those from low-income families.

“There is a moral problem and we must do whatever we can to open the doors to higher-ed opportunity for learners who are not adequately served,” says Mitchell.

The education department has lauded the efforts of some non-traditional education providers, acknowledging that the private sector has shown “promise in preparing students with the training and education needed for better, in-demand jobs.” Several companies are already working with colleges. General Assembly, which claims roughly 60 percent of all “bootcamp” students, offers a credit-bearing “Tech Semester” program for students at Boca Raton's Lynn University. Galvanize, based in San Francisco, has created a Master’s of Science program in data science with the University of New Haven. Arizona State University is working with edX, a provider of massive open online courses, to create the Global Freshman Academy, which allows any student around the world to take online classes for credit at a fraction of the cost.

Not all collaborations have worked out, however. Ivy Bridge College, a two-year associate’s program created by startup Altius Education and Tiffin University, was forced to close in 2013 after the Higher Learning Commission, the accrediting body for Tiffin University, questioned its quality.

“Sometimes if you’re right about what the market needs, you can still be too early,” asserts Paul Freedman, formerly chief executive of Altius and now co-founder of Entangled Ventures. Still, he applauds the move to test new mechanisms to evaluate different models of post-secondary programs: “Education is a unique service where there is a high need for quality assurance that is open and transparent.”

Defining ‘Quality’

What “quality assurance” looks like—and how it will be measured—for these new hybrid programs is still emerging. In July, Mitchell wrote that “the normal mechanism we use to assess quality in higher education, accreditation, was not built to assess these kinds of providers.” He expressed hope that a new “quality assurance process will rely much less on inputs, where the emphasis of much accreditation still rests, and will instead focus on outputs and evidence.”

For the EQUIP pilot, the department has stipulated that any Quality Assurance Entities must evaluate non-institutional providers on:

  • Claims made about student learning and outcomes
  • Assessments and other evidence used to evaluate claims
  • Student outcomes in terms of employment or salary
  • Management and stability of the company to ensure it is financially sound

Mitchell states that QAEs will supplement—”but not substitute”—existing accrediting agencies. “Institutional accreditors are still key” to approving programs for the EQUIP pilot, he says.

When it comes to ensuring rigor and quality, “the model I would see is like [financial] auditors,” says Freedman. “Instead of creating a monopoly in quality assurance, there ought to be some agreement by bootcamps and schools on the process of quality assurance.”

The coding bootcamp industry is already getting started. Ten companies formed an organization, the New Economy Skills Training Association, to develop a standard for reporting student outcomes. The group has drafted a set of guidelines that focus on completion rates, job placement and tuition.

Cautionary Tales

Even so, for many the prospect of federal aid funneling to companies evokes memories of Corinthian and other predatory for-profit education providers that have been caught falsifying data about student outcomes to woo tuition dollars. And the idea that colleges can effectively “outsource” entire academic programs will likely raise concerns.

Even bootcamp providers are worried. Clint Schmidt, chief operating officer at Bloc, is concerned that access to federal aid may lead to “a big land grab and gold rush by companies to open up new bootcamps.” Robert Shireman, a senior fellow at The Century Foundation, worries that education will become “flooded with low-quality programs run by charlatans.” He states:

“It is worth remembering that the for-profit college scandal, which is still in the process of being cleaned up, began as a noble effort to allow companies to gain access to federal funds only if they ran innovative training programs that led to good jobs. We must be careful that, in opening federal aid to coding boot camps, we do not let that happen again.”

Mitchell says he’s on guard: “One of the things we’re all concerned about is making sure that when we put taxpayer dollars and student time at risk….the outcomes are of high quality, that programs have integrity, and that, at the end, students will be successful.”

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