By John Egan.
In April 2016, the Federal Trade Commission (FTC) announced a landmark decision: The consumer watchdog had, for the first time, punished a lead generator in the education industry.
Operators of a website called Gigats.com agreed to settle allegations by the FTC that the company claimed it was pre-screening job applicants for employers when it really was collecting information for other reasons — namely generating leads for colleges and career-training programs.
In a blog post about the Gigats.com case, the FTC issued this warning: “Members of the lead generation industry should take this as one more reminder of the need for transparency. Be upfront with consumers about what you’re up to and don’t use deception to elicit personal information.”
Settlement of the Gigats.com case came during the final year of the Obama administration — nine months before Donald Trump took the oath of office as the 45th U.S. president. Today, with President Trump in the White House, it’s unclear how aggressive the FTC will be in regulating lead generators in the education industry, particularly since the makeup of commission itself promises to change.
Almost certainly, the regulatory future for lead generators in higher education will be discussed during a session at LeadsCon Las Vegas 2017. The session, to be led by higher education marketing agency Sparkroom, is titled “The Latest Higher Ed Inquiry Generation Trends & How They Impact You.”
In January 2017, Trump appointed Maureen Ohlhausen, a Republican, as acting chairwoman of the FTC. That move preceded the scheduled departure in February 2017 of the previous chairwoman, Edith Ramirez, a Democrat. When Ramirez steps down, the FTC will have just two members, offering Trump the opportunity to pick like-minded commissioners and essentially remake the FTC’s approach to regulation of lead generators and other businesses.
In an FTC statement, Ohlhausen says she’s committed to preserving “America’s true engine of prosperity: a free, honest and competitive marketplace.”
“In pursuit of that mission, I will work to protect all consumers from fraud, deception and unfair practices,” she adds. “I will safeguard competition while preserving American innovation and promoting economic liberty for all citizens. Finally, I will ensure the [FTC] minimizes the burdens on legitimate business as we carry out this vital work.”
In the past, Ohlhausen has been critical of what she believes is overregulation of businesses by the federal government.
In a speech delivered to the Heritage Foundation, a conservative think tank, just one day before she was named acting FTC chairwoman, Ohlhausen complained that the commission, under the Obama administration, had “at times pursued an antitrust agenda that disregarded sound economics.” Obama named Ohlhausen to the commission in 2012; her term expires in September 2018.
While citing a handful of pro-consumer cases she has supported, Ohlhausen said she thinks businesses suffer under the weight of burdensome regulations. She said she advocates a “philosophy of regulatory humility” that is “mindful of the private and social costs that government actions inflict.”
In the speech, Ohlhausen described herself as a champion of FTC efforts to “challenge abuses of government process and to promote economic liberty.”
How Ohlhausen’s stances and Trump’s actions affect lead generators in the education industry remains to be seen. Will the FTC continue to aggressively pursue lead generators that it believes are behaving badly? Or will it take its foot off the regulatory pedal? The answers to those questions depend in large part on the mercurial Trump and how he chooses to move forward with policies protecting American consumers.
Another issue that could alter the lead generation landscape in the education industry is how the Trump administration will handle financial aid for college students.
In a 2015 workshop sponsored by the FTC, Jonathan Gillman, who then was billed as CEO of Omniangle Technologies, a consumer analytics company, suggested the bounty of federal aid for college students — billions of dollars in loans and grants — is an enticement for lead generators in the education industry.
The federal money, Gillman said, “does and will trickle down through the lead generation ecosystem, and the ability of savvy marketers and lead generators to match up that subsidy — which ultimately starts with the government — down to extremely inexpensive sources of traffic, such as websites that offer people jobs or websites that look to offer people government assistance, is one reason why, from a lead generation standpoint, I think education is so popular.”
At the same FTC workshop, Jeff Appel, who at the time was deputy undersecretary of education at the U.S. Department of Education, said the agency supported “any avenue or mechanism” that would improve access to higher education, but not if it exploited students “for the sake of student aid programs.”
“And that’s kind of hard to do, frankly. It’s not an easy distinction to always make,” Appel acknowledged.
Appel explained that the Department of Education had been working on stepping up oversight of colleges and universities, but that fewer than 300 federal workers had day-to-day responsibility for monitoring the nearly 6,000 institutions of higher education participating in federal programs for student aid.
But just as with the FTC, Trump is poised to refocus the Department of Education. For instance, Sam Clovis, who was national co-chair and policy director of Trump’s presidential campaign, told Inside Higher Ed in May 2016 that Trump’s team favored getting the federal government out of the student loan business and putting those loans in the hands of private lenders.
“Once we get into office, we’re going to take a hard look at the Department of Education,” said Clovis, a longtime college professor. “There are lots of things that serve people well, but there are many operations that do not.”
Click here to register for LeadsCon Las Vegas 2017.