Financially struggling 2U adds 6 new programs to Pepperdine University partnership

Higher Ed Dive

Ben Unglesbee

May 17, 2024

Dive Brief:

• 2U has added six new programs to its partnership with Pepperdine University, a Christian institution in California and one of the online program manager’s largest clients.

• The expansion brings the total number of online programs 2U has developed with Pepperdine to 12. The latest include online master’s in teaching and speech-language pathology and a doctorate program in education.

• The company expects the first program to launch in 2024, with others following next year. Accreditation for two of the programs are still pending. The announcement comes as 2U negotiates with lenders to ease its financial pressures and works to downsize amid falling revenue and a smaller program base.

Dive Insight:

As 2U expands its Pepperdine partnership, the company is suffering financially as other academic clients, including the University of Southern California, have scaled back their partnerships with the OPM.

In the first quarter, revenue in 2U’s degree segment declined nearly 21% to $111.5 million.

In an earnings call this month, Chief Financial Officer Matt Norden attributed the decline to “fewer steady-state programs” that were operating during the quarter, as well as to what 2U calls “portfolio management activities,” which includes negotiated exits from programs the company runs with clients.

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