Online Course Provider 2U (edX) Faces Doubts It Can Continue ($900 Million in debt)

[Ares]

Online Course Provider 2U Faces Doubts It Can Continue (Inside Higher Ed)

Financially struggling 2U, one of the largest online course providers, has warned of “substantial doubt” it can continue in business, creating uncertainty for the hundreds of colleges and universities that use its services. [...]

The warning, in a quarterly filing on Monday, added more tumult to the already-uncertain landscape for online program management firms, or OPMs.
At the end of last year, 2U had more than $900 million in debt. According to the earnings report, if 2U cannot raise capital or amend or refinance its loan, which the company has already begun to do, there is “substantial doubt about its ability to continue as a going concern.” [...]

2U works with more than 250 higher ed institutions and partners. Inside Higher Ed reached out to a dozen that work with 2U, most of which did not respond to requests for comment. Representatives from Pepperdine University and the University of California, Berkeley, declined to comment. [...]

He pointed toward Academic Partnerships and Grand Canyon Education, both growing in the space, as potential buyers for 2U. Others have suggested a private equity firm, as those firms are used to acquiring debt. [...]

2U is one of the largest in the space, launching in 2008 and hitting a peak with the acquisition of industry giant edX in 2021. [...]

...a potential delisting of 2U on the NASDAQ stock exchange could be a catalyst for universities to cut ties. If a company’s stock price is below $1 for 30 days, the company receives a notice of delisting. It then has 180 days to raise the stock price, which could be as simple as a reverse stock split, which would boost the price. As of Feb. 13, 2U’s stock price was 57 cents per share.

This has the potential to cause massive disruption with online learning platforms.

[ss20ts]

This could seriously fudge a lot of programs up. Like royally fudge them up. I always thought it was a horrible idea for edX to be sold. If it was going to be sold, it should have been sold to a college not what's basically a for profit investment company. Man, this could really mess up a lot of people. I've been eyeballing a master's certificate on there for a college that's a big deal in my area, I'm glad now I have held off. I'll have to wait and see how this shakes out before spending a few grand on the program.

[bjcheung77]

Oh Snap, I wrote about that a month or two ago... Maybe it should have been better EdX or another company acquired 2U (or another institution that acquired them) instead of the other way around...

[studyingfortests]

I personally think OPMs are a scourge to the online education field. While yes, it will massively screw things up for the OPM-run programs, it might also bring more awareness to the whole not-so-great industry.

I sort of figured this out when I was looking through all the accredited online social work programs. I noticed that three or four schools had websites that were nearly identical... looked further, and they were all websites unique to the school's online programs... did some more digging and discovered 2U was behind all of them.

Not coincidentally, the tuition at all the online programs run by 2U were about double the cost of the non-OPM programs.