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Colleges can use third-party online program managers to help run their online education programs. These managers often recruit students, in addition to providing other services.

Many online managers are paid a share of tuition revenue—an arrangement the Department of Education allows only if safeguards against prohibited incentive payments are in place. For example, online managers must provide multiple services and not be paid separately for recruiting. These arrangements are subject to annual audits.

But colleges and auditors lack clear instructions from Education, making it hard to detect violations. Our recommendations address this issue.

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