Thu Sep 19 07:00:00 UTC 2024: ## University of Maryland Global Campus Sued Over Coursera Payment Scheme

**Washington, D.C.** – A legal advocacy group, Student Defense, has filed a lawsuit against the University of Maryland Global Campus (UMGC) alleging that its agreement with online learning platform Coursera violates federal law. The lawsuit, filed in D.C. Superior Court, claims UMGC’s payment of “service fees” to Coursera based on student enrollment in cybersecurity degree programs constitutes a deceptive trade practice.

The crux of the lawsuit lies in UMGC’s reliance on a 2011 Education Department guidance that exempts colleges and outside companies from the federal ban on incentive compensation. This exemption allows third parties to receive financial benefits for enrolling students as long as they provide a bundled set of services, such as technology support, in addition to student recruitment.

Student Defense argues that UMGC’s failure to disclose these incentive-based payments to students violates the D.C. Consumer Protection Procedures Act. The group contends that Coursera’s role in developing course content and marketing services for UMGC falls within the exemption’s scope, allowing the company to receive payments tied to enrollment numbers.

While not seeking monetary damages, Student Defense aims to obtain a judicial ruling declaring that incentive compensation violates the Consumer Protection Procedures Act and prevent UMGC from further paying service fees to Coursera.

This lawsuit comes as consumer protection advocates and other groups have long called for the Education Department to rescind the 2011 guidance. While the department expressed openness to reconsidering the exemption last year, those discussions did not progress. Student Defense lawyers see this lawsuit as an opportunity to overturn the guidance based on their interpretation of the Higher Education Act of 1965.

UMGC declined to comment on the ongoing litigation.

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