USC and 2U misled online students through doctored U.S. News rankings, lawsuit says

Higher Ed Dive

Natalie Schwartz

December 21, 2022

Dive Brief: 

• A group of former students filed a class-action lawsuit this week against the University of Southern California and 2U, alleging that they lured students to enroll in the institution’s online education programs by advertising artificially inflated rankings.

• The lawsuit alleges that the University of Southern California incorrectly submitted data to U.S. News & World Report’s influential annual rankings of education schools. It says the university then worked with 2U, a public company that helps it run some of its online programs, to use the doctored rankings to advertise its online education programs to prospective students.

• The lawsuit was filed in the Superior Court of California of Los Angeles County. The former students allege that 2U and USC violated California law by making untrue or misleading representations, engaging in unfair competition and deceiving consumers.

Dive Insight: 

The lawsuit stems from the USC Rossier School of Education’s decision earlier this year to withdraw from U.S. News’ annual ranking of graduate education schools. When the university made the call, it revealed it had provided the influential publication with inaccurate data for at least the past five years. 

But the lawsuit says the incorrect data submissions began more than a decade ago. The former students allege that these inaccuracies began around the time USC entered a contract with 2U, a company that helps colleges launch and run online programs in exchange for a cut of their revenue.

USC and 2U struck a contract in October 2008 to create an online master’s in teaching. Although the university was the company’s first client, today 2U brings in close to $1 billion in revenue through contracts with other colleges and a large MOOC platform.

At the time they struck a deal, online programs weren’t widely trusted. Thus, 2U’s success hinged on its ability to build confidence in USC’s online graduate program, according to the lawsuit.

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