Students File Lawsuit Against USC and 2U for Deceptive Enrollment Scheme
FOR IMMEDIATE RELEASE:
December 20, 2022
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Students File Lawsuit Against USC and 2U for Deceptive Enrollment Scheme
USC and 2U used misleading U.S. News & World Report rankings to pad profits by expanding online programs
Student Defense and Tycko & Zavareei LLP today filed a lawsuit against the University of Southern California and 2U, Inc. for defrauding students by using misleading U.S. News and World Report rankings of the Rossier School of Education. The class action lawsuit was filed on behalf of three named plaintiffs and all other similarly situated students who were defrauded.
Earlier this year, USC came under intense scrutiny after the university released a report describing how the dean of the Rossier School of Education directed administrators to intentionally withhold information from U.S. News & World Report to improve its ranking. USC withdrew Rossier from the annual evaluations following the report, citing “a history of inaccuracies.”
The lawsuit alleges that USC, and its for-profit online program partner 2U, enticed students to enroll in their online programs using the doctored U.S. News rankings that only included data reflecting the selectivity of just one in-person program. U.S. News compiles a more specialized ranking of online education graduate programs, USC’s only appearance on that list is from 2013 when the school ranked 44th. In the years that followed, USC Rossier’s dean admitted that including data for its burgeoning online doctoral degree would cause the school "to drop like a rock in the rankings.” Nevertheless, USC and 2U still promoted the doctored in-person rankings in advertising for USC Rossier’s online programs, investing in paid search terms and employing targeted online advertising to prospective students to boost the online program’s enrollment.
According to the complaint, 2U Inc. — a publicly traded online program management (OPM) company — assumed responsibility for recruiting these online students and was paid a substantial percentage of tuition. Tuition sharing agreements between non-profit institutions and OPMs have come under fire recently due to concerns with program oversight, deceptive recruitment tactics, and for causing students to take on excessive debt. Graduate degrees at USC Rossier are also among the most expensive in the country, meaning teachers and education professionals paid an enormous tuition premium on the belief that the programs in question were highly ranked, while 2U and USC inflated their own profits.
“It’s not hard to see the throughline here — USC intentionally falsified data to inflate their U.S. News ranking, and 2U used the false numbers to pad their profits,” said Student Defense Litigation Director Eric Rothschild. “Both USC and 2U’s actions have hurt countless students who thought this data would help them make an informed enrollment decision. Instead, they were lured into a manufactured profit-making scheme at the expense of their financial and educational futures.”
“Time and time again, we see that when Wall Street gets involved in higher education, students lose,” said Kristen Simplicio, a partner at Tycko & Zavareei. “USC not only procured the fraudulent ranking, but it financially incentivized a for-profit operation to use that ranking to recruit hundreds of students every year. We hope that with this lawsuit, 2U and USC are ultimately held accountable to the teachers and other educational professionals that they harmed with this rankings scheme.”
“We’re seeing a troubling new pattern of for-profit providers cloaking their schemes in the brands of well-respected public and nonprofit institutions,” said Student Defense President Aaron Ament. “It’s the next frontier in protecting students from fraud.”
The lawsuit seeks restitution as well as actual and punitive damages for students enrolled in these online degrees. A copy of the complaint can be found on the Student Defense website and the Tycko & Zavareei website.