The University of Southern California (USC) has ended its partnership with online education company 2U Inc., marking a significant shake-up in the university’s programs. The decision comes after 2U’s involvement led to financial and reputational issues at USC’s social work school.
In a joint statement, USC and 2U confirmed that they had mutually agreed to conclude their relationship for degree programs at USC’s social work school, education school, and the Iovine and Young Academy, which focuses on entrepreneurship. Over the next 15 months, USC will take over the operations of these online programs, allowing the university to have full control over its programs and tuition revenue.
The separation from 2U was a major blow to the company, as USC was its first partner when it was founded 13 years ago. USC’s social work school saw a rapid increase in enrollment under the partnership with 2U, becoming the largest in the world. However, the exponential growth came at a cost to the school’s finances and academic standing. 2U was consuming more than half of USC’s online tuition dollars, contributing to a budget crisis.
During this period of financial strain, former social work dean Marilyn Flynn engaged in bribery to secure government contract money, further worsening the school’s finances. Flynn later pleaded guilty to the charges.
While the terms of USC’s separation from 2U were not disclosed, 2U’s CEO, Chip Paucek, revealed that the company would receive approximately $40 million from USC in the fourth quarter of 2023. USC declined to confirm this sum.
The split with 2U was welcomed by administrators and faculty on campus. The partnership had pushed the social work school to continuously recruit more students, resulting in rising overhead costs. Despite increasing tuition to over $100,000 and expanding enrollment from 900 to 5,000, the school still faced financial struggles.
Vassilios Papadopoulos, interim dean of USC’s school of social work, voiced his support for ending the partnership, stating that it was clear they needed to go in a new direction when examining the school’s financial status. He acknowledged that times and technology had changed since the partnership began, and now there are numerous online master’s programs in social work available at more affordable prices.
USC remains committed to online education, with plans to develop and operate its own online programs independently. The university aims to prioritize quality over quantity and has already made efforts to make education more affordable by reducing tuition by 25% in 2022. The school of social work’s enrollment has dropped to 1,000 students, but administrators believe that having control over their programs will enable them to make necessary changes and expand effectively.
The separation from 2U is expected to benefit USC’s programs in social work and education by providing more flexibility and control. Although the education school did not face financial hardships due to its online learning contract with 2U, ending the partnership will offer opportunities for program design improvements.
While USC’s split from 2U has had a significant impact on the company, USC stands firm in its decision to prioritize its academic reputation and financial stability. The university will now focus on running its online programs independently, leveraging technological advancements and their dedicated faculty to deliver high-quality education to students.
As online education continues to evolve, both USC and 2U face new challenges and opportunities. USC is determined to embrace these changes and move forward, while 2U will need to adapt and find new ways to navigate the shifting landscape of the online education industry.
