On September 17, 2024, Student Defense filed a lawsuit against University of Maryland Global Campus (UMGC) for violating the D.C. Consumer Protection Procedures Act (CPPA) due to conduct related to the payment of incentive-based compensation to Coursera, Inc.
"UMGC’s violation of the Incentive Compensation Ban unfairly risks exposing student-consumers to coercive recruitment and enrollment practices. In addition, UMGC’s express misrepresentation of its incentive compensation practices subverts student-consumer choice by preventing student-consumers from making enrollment decisions with full and accurate information," Student Defense alleges.
According to the complaint, which was filed in the D.C. Superior Court, UMGC has promoted its policy of not paying incentive-based compensation, when in fact it does. UMGC has an arrangement with Coursera, an online program management company, relating to its Bachelor of Science in Cybersecurity Management and Policy and Bachelor of Science in Cybersecurity Technology degrees. Under this arrangement—and consistent with Coursera’s business model—UMGC pays Coursera a fee that is directly tied to the number of successful student enrollments. With each student Coursera recruits and enrolls, UMGC pays a larger sum.
The lawsuit alleges that UMGC’s compensation arrangement with Coursera violates the Incentive Compensation Ban and, by extension, is an unfair and deceptive trade practice prohibited by the CPPA.
Student Defense brings this lawsuit in consideration of recent developments to the CPPA which allow certain nonprofit organizations groups to bring litigation on behalf of consumers, without representing specific individuals who have been harmed. Student Defense’s lawsuit does not seek to impose monetary damages against UMGC.
The press release issued after this case was filed is available here.
News Coverage
Lawsuit Takes Aim at Education Department’s Incentive Compensation Guidance | September 19, 2024 | Inside Higher Ed
UMGC sued over Coursera payments | September 20, 2024 | Higher Ed Dive