STATEMENT: Department of Education Must Protect Students Following Collapse of For-profit Education Company 2U
Bankruptcy follows increasing pressure after students sued USC for misleading them about its online master’s degree program run by 2U, and USC subsequently severed its long-term relationship with 2U
BOSTON – The for-profit education company 2U, Inc. (2U) announced that it has filed for Chapter 11 bankruptcy. The announcement follows increasing legal pressure after graduates of USC’s online Master’s in Social Work (MSW) program, which students allege is largely outsourced to 2U, filed a lawsuit against USC in May 2023. In November 2023, USC announced it would end its long-term contract with 2U for nearly all online programs.
Earlier this year, the Project on Predatory Student Lending (PPSL) joined the Student Borrower Protection Center and the Center for American Progress to send an urgent letter to the Consumer Financial Protection Bureau and the U.S. Department of Education warning about the imminent collapse of 2U and the need to protect students.
PPSL and Altshuler Berzon LLP represent students in the class action lawsuit against USC related to USC and 2U’s online MSW program, Luna v. USC. PPSL also represented student borrowers in the ITT Technical Institute bankruptcy, in Villalba v. ITT. That case recognized students as stakeholders in the bankruptcy, canceling $600 million in private loans still owed to the defunct school and refunding $3 million that students paid the company.
Statement from Eileen Connor, President and Director of the Project on Predatory Student Lending:
"All too often, these for-profit education companies are allowed to trample borrowers’ rights while lining their pockets with federal student loan money, and then cut and run. They escape any real accountability, while borrowers are left devastated with lifelong financial consequences. The Department of Education has a responsibility to put better oversight policies in place to protect students from predatory arrangements that schools enter into with for-profit companies like 2U.
This 2U collapse should also serve as a lesson to any for-profit companies or universities that would treat students as profit centers – this is not the path forward. PPSL will continue to fight alongside borrowers to end predatory practices in higher education and make sure borrowers’ rights are recognized.”
About the Project on Predatory Student Lending
The Project on Predatory Student Lending (PPSL) is the leading legal organization representing student borrowers against predatory for-profit colleges and the policies that enable institutions to exploit and cheat students. PPSL uses bold, strategic litigation and advocacy to demand accountability in the higher education space and influence policy solutions to create a more just and affordable education system. PPSL represents more than one million student borrowers and its work has resulted in cancellation of more than $16 billion of fraudulent student loan debt.
About Altshuler Berzon LLP
Altshuler Berzon LLP is a San Francisco law firm dedicated to providing the highest quality representation in the service of economic justice and the public interest.
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