Students paid thousands for ‘branded’ university course, but it was outsourced

DENVER – Mr Raymond Sewer said he had good reason to believe that the California Institute of Technology (Caltech) would be deeply involved in the cloud computing “boot camp”.

Caltech’s website touted the online programme, and the school’s orange logo appeared on the promised certificates of completion.

“I was just like, ‘Ah, man, this has got to be legit’,” said Mr Sewer, 46, who works in Denver and enrolled in the $9,000 (S$11,500) programme to try to leave the mortgage industry.

But after Mr Sewer signed up, he said that Caltech was almost nowhere to be found. He said his primary instructor, who sometimes vanished during class sessions, lived in Mississippi, not Southern California. A course facilitator, he said, was in India.

Neither had any meaningful ties to Caltech, which Mr Sewer had known as an academic powerhouse and a backdrop of the sitcom The Big Bang Theory.

The university, he learnt, had largely outsourced the programme to a company called Simplilearn.

“It was just a bunch of bogus,” Mr Sewer scoffed in an interview. “They just wanted our money.”

Caltech, a private university in Pasadena, is a highly selective school, but some of its online programmes make it merely part of the crowd.

Colleges across the country are routinely offering online, non-degree-granting programmes that they tout as avenues to offer more educational opportunities to broader audiences. But the programmes are largely unregulated and may not feature university faculty members or their curricula.

Caltech spokeswoman Shayna Chabner said the university viewed its online programmes as “a way that we can bring value” and expertise to the ideal of lifelong learning, while Simplilearn chief marketing officer Mark Moran said the company’s programmes “help thousands of professionals advance their careers”.

Other online programmes have also faced recent pressure.

In a June report, California’s state auditor faulted the University of California system for insufficient oversight of outside firms involved in online education.

Minnesota recently passed legislation to limit the ties of its public universities to online programme managers.

Government officials and researchers have said the tactics used by many universities and their corporate partners can be especially harmful to low-income students, who sometimes look to such programmes as cost- and time-efficient ways to earn an educational credential.

At least 600 colleges and universities in the United States have used online-programme management companies, according to data compiled by market research firm ListEdTech. More than one-third of public, four-year-or-above universities have turned to such companies, the analysis found, as branded training programmes help schools shore up budgets.

In addition to ListEdTech’s data, The New York Times relied on interviews and examined advertising materials, course communications, private correspondence, court filings and other public records to report this article.

Although some universities have begun to rethink their approaches, colleges can earn several thousands of dollars for each enrolled student, estimated to add up to hundreds of millions of dollars a year across the industry.

Some of those students became deeply disillusioned.

Ms Elva Lopez was online in 2020 and saw a pop-up advertisement for a Caltech-branded cyber-security programme, according to a class-action lawsuit that she filed in 2023 that accused the university and Simplilearn of violating consumer protection laws.

After requesting more information, she received an e-mail from an admissions adviser whose address matched Caltech’s in Pasadena. She was admitted and arranged for US$14,000 in loans.

Ms Lopez, according to a court filing, soon learnt that one of her instructors was not a Caltech professor but a recently minted graduate of the same cyber-security programme.

Strong sales tactics

Few American universities have the influence of Caltech, which manages the Jet Propulsion Laboratory for Nasa. The university trumpets 46 Nobel laureates in its ranks, and 110 fellows of the prestigious American Academy of Arts and Sciences.

In at least seven consecutive years, it has reported at least US$3 billion in revenue.

In May 2020, it announced a partnership with Fullstack Academy, which Simplilearn eventually acquired. A co-chief executive at the company said then that the agreement would give students “access to some of the world’s brightest educators”.

Ms Chabner said in September that the university, having recognised that a contractor might be able to tap new audiences, had picked the company because of its track record with blue-chip corporations and universities.

One programme said it could transform “beginners into cyber-security professionals in as little as 12 weeks, teaching skills that qualify its participants for high-paying, in-demand tech jobs in California and beyond”.

Ms Chabner, who declined to discuss details of Caltech’s financial arrangements with Simplilearn, said the university had about 50 distinct online course titles but that only eight were associated with the company.

About 500 people a year participate in the Simplilearn programmes, she said.

The company has used high-pressure sales tactics.

Students described calls that dangled time-conditioned discounts with a sense of pushiness and urgency, and some students said the calls leaned on the majesty of Caltech.

The sooner they enrolled, they were told, the sooner they would be on their way to better lives. Caltech’s name, they acknowledged, encouraged less due diligence.

Many students said they were aware that they would not be traditional students – “I’m not a physicist or anything like that,” Mr Sewer said – but they believed that Caltech would play a central role in the programmes.

They interpreted language such as “powered by Simplilearn” as an expression of the technology platform they would be using, not as a signal that a company representative would be teaching.

Mr Austin Barnes, who recalled the sales pitches starting minutes after he requested more information, expected that Caltech personnel would be involved.

“I thought it would be a Caltech professor, 100 per cent, or maybe just somebody affiliated with the faculty: an adjunct professor, maybe a PhD student, even a grad student prepping for a PhD candidacy,” said Mr Barnes, 34, who lives in Parker, Colorado, and has a master’s degree from the University of Northern Colorado.

But Mr Barnes and other students sometimes found instructors who they said lacked sterling academic pedigrees and would race through presentations before vanishing for long stretches of class.

Sessions were cancelled for suspicious reasons; in one instance, after their instructor cited weather trouble, students checked conditions in Mississippi and discovered that it was sunny there.

The situation was not much better when classes convened, and students said they worked through a curriculum that they thought had little depth. Some students recalled finding similar materials elsewhere online and said they received scant career counselling.

Mr Barnes, who paid US$10,000, was unsure of whether the programme was worth even US$1,000.

Mr Sewer put it a different way as he lamented how little the programme had helped his career: “They threw icing on a cornbread muffin and called it a cupcake.”

Ms Chabner said students such as Mr Barnes and Mr Sewer had experienced “really isolated events” that the university did not believe were “reflective of the quality of the programme”.

She would not discuss individual instructors. But she acknowledged that Caltech, which sometimes arranged for refunds despite the time limits in Simplilearn’s published policies, had imposed new quality control measures in recent months to “ensure that our expectations for instruction and the student experience are met”.

The university, Ms Chabner said, was involved in vetting and consulting with instructors, evaluating course material and “refining or enhancing that material when it’s needed”, and monitoring student feedback.

Simplilearn founder and CEO Krishna Kumar said in an e-mail on Sept 5 that he was “happy to get on a call” but did not respond to follow-up messages, including one that detailed the Times’ reporting.

Instead, Mr Moran, the chief marketing officer, sent a series of statements, including one that said “we are proud of the digital skills services we provide and fully stand behind the programmes offered in collaboration” with Caltech.

Citing feedback from other participants, the statement added that the company did not “believe that these individual comments accurately represent the positive experience of the vast majority of individuals”.

The company asserted that its role in Caltech programming was “disclosed multiple times to participants before signing up”.

Ms Lopez’s litigation, which names Caltech and Simplilearn as defendants and relies on consumer protection laws, involves only California residents who enrolled in the cyber-security programme. (Ms Lopez was not always so critical: In an April 2021 e-mail to a Fullstack Academy employee who was processing certificates of completion, she wrote that the programme had been “a wonderful experience”. Through her legal team, Ms Lopez declined to be interviewed.)

Judge Ethan Schulman dismissed a part of Ms Lopez’s case that accused Caltech and Simplilearn of “unjust enrichment”, but he allowed much of the litigation to proceed.

In a ruling this past spring, he wrote that a “reasonable consumer would believe that Caltech supplies educational content, including curriculum and instruction” to a programme that bears Caltech’s name and that is promoted on its website.

A joint court filing in April said the parties to the lawsuit, including Caltech and Simplilearn, were “amenable to informal and formal settlement discussions”. No settlement has been announced.

A burst of investment

The federal government helped kick off the gold rush in 2011. The Education Department, under the Obama administration, loosened its guidance on revenue-sharing relationships between colleges and for-profit companies.

Hundreds of universities signed contracts with online-programme management firms.

In tax filings over the past decade, some of the country’s most prominent schools, including Georgetown University, the University of Southern California and Vanderbilt University, have at least once listed online-programme companies among their five largest outside contractors.

Agreements involving public universities often called for schools to have some sway over programmes offered in their names but fell short of granting them absolute control – or responsibility.

The Covid-19 pandemic accelerated the trend as universities scrambled to offer a buffet of opportunities.

“I think it’s a fundamental betrayal of students to slap the branding of an elite institution on, essentially, a cookie-cutter, for-profit boot camp,” said Mr Aaron Ament, president of the National Student Legal Defence Network, which is helping represent Ms Lopez.

Mr Ament, who worked for the Education Department from 2013 to 2017, said he saw the practice as “one of the fastest-growing trends in higher education where there is little to no oversight”.

Investors took note. In 2021, private equity giant Blackstone spent US$250 million for a majority stake in Simplilearn.

At the time of the investment, Simplilearn, founded in 2010, had worked with fewer than three million students. In January 2023, Simplilearn said it had crossed the five million student threshold.

Nevertheless, there would be a contingent of frustrated customers.

In February, for example, Mr Barnes wrote to Caltech official Rick Hefner, who was among the university’s links to Simplilearn.

“I’m not sure how Caltech is involved at this point, but I’d be willing to bet it wouldn’t stamp its name on the quality of this course,” Mr Barnes wrote.

“The irony of a cloud computing instructor not being able to find a way to log into Zoom is not lost on me,” he noted.

Dr Hefner called him and, according to Mr Barnes, acknowledged shortcomings with the instructor and helped him move into a different class.

Caltech, though, remained a cheerleader for its relationship with Simplilearn.

In early May, when Simplilearn announced that another 765 students had finished courses branded by Caltech, Dr Hefner was quoted in a news release hailing “the quality of the programmes”.

Days later, Mr Sewer wrote to Dr Hefner with his own complaints. He said he received a refund but still lamented the time he had wasted.

In July, the Education Department said it planned to revise its guidance “no sooner than late this year”.

The new guidelines, whatever they are, may reorder the industry.

In May, while Mr Barnes said he was still working his way through the course, Caltech sent him a certificate marking his completion of the programme.

Pressed in September on whether Mr Barnes had received the certificate too soon, Caltech and Simplilearn gave differing accounts of the boot camp’s requirements.

Mr Moran said that Simplilearn’s expectations were clear and that the company did “not believe that certificates were sent prematurely”.

But Ms Chabner said Caltech would “certainly not knowingly issue a certificate before the course requirements have been met”.

She acknowledged, without discussing specific students, that there had been “a misunderstanding around student progress”.

To critics such as Mr Ament, Ms Lopez’s lawyer, the university has shortsightedly cheapened its storied brand.

“That’s what they have to ask themselves,” he said. “Is that worth it?” NYTIMES