For more than 15 years, a group of companies known as Online Program Management providers, or OPMs, have been helping colleges build online degree programs. And most of them have relied on an unusual arrangement \u2014 where the companies put up the financial backing to help colleges launch programs in exchange for a large portion of tuition revenue.<\/p>\n
It\u2019s a model that has long raised eyebrows in higher ed, and now it\u2019s one that is under scrutiny from federal agencies. New regulations [under consideration in the U.S. Department of Education](https:\/\/www.insidehighered.com\/news\/tech-innovation\/2023\/12\/13\/how-education-department-could-change-opm-industry) could require OPMs to give up revenue-sharing and adopt the more conventional fee-for-service, subscription or other approaches instead.<\/p>\n
As a longtime administrator of online programs at colleges, I have mixed feelings about the idea of shutting down the model. And the question boils down to this: Are colleges ready for a world without OPMs?<\/p>\n
For one thing, the number of colleges that have worked with OPMs is large. It\u2019s a $4 billion industry, with about 550 U.S. colleges partnering with them and about a quarter of students in fully online 4-year programs enrolled in them.<\/p>\n
But it turns out, to my surprise, that it hasn\u2019t been a very profitable model for the companies.<\/p>\n
According to edtech consultant Phil Hill in [a recent blog post](https:\/\/onedtech.philhillaa.com\/p\/post-opm-rorschach-test), most revenue-sharing ventures have either lost money or barely reached breakeven. Leaders in the sector, including 2U, Coursera and Keypath, never made a profit on the activity, and Pearson and Wiley sold off their OPM offshoots in recent months when the going got rough.<\/p>\n
It\u2019s an OPM paradox \u2014 as companies lose money, colleges make it.<\/p>\n
It turns out that these ventures often hoped to make money by growing large enough to be sold at a premium. A century ago, British economist John Maynard Keynes recognized that what matters most is not a company\u2019s bottom line, but how the stock exchange rewards it.<\/p>\n
When colleges turned to OPMs, they must have known it was dicey. Sharing half your tuition revenue with your provider is \u201coutrageous,\u201d a senior New York University faculty member, Thomas D\u2019Aunno, grumbled years ago, just as he was signing up with an OPM against his better judgment.<\/p>\n
\u201cThe question was which OPM we were going to work with,\u201d he told me with resignation, \u201cnot whether we were going to work with one.\u201d<\/p>\n
## Outsourcing vs. Insourcing<\/p>\n
When OPMs first infiltrated higher ed, convincing well-known colleges to outsource digital learning, I was among those who didn\u2019t welcome them, fearing they\u2019d do the job I thought more appropriate for faculty and college administrators to tackle.<\/p>\n
OPMs, I worried, would undermine academic integrity in digital education. And even more troubling, I feared they would keep colleges from building higher ed skills needed to propel internal development over the long run.<\/p>\n
My objection later softened, though, as I came to recognize that many colleges needed help to enter the digital marketplace. Since many lacked skillsets and resources to do what was required to move online forward, it made sense to turn to commercial vendors to give higher ed time to acquire digital ed know-how.<\/p>\n
Once they got the hang of it, I hoped, colleges could then jump off their training wheels and go online entirely on their own.<\/p>\n
That\u2019s what happened recently at the University of Southern California when it [canceled its long-term contract with 2U](https:\/\/www.insidehighered.com\/news\/tech-innovation\/teaching-learning\/2023\/11\/09\/2u-usc-sharply-curtail-much-scrutinized-online), a top, full-service provider. USC\u2019s cancellation was just one turnabout in a cascade of dozens of colleges fleeing OPMs in recent years.<\/p>\n
\u201c2U had the technology and the means at first,\u201d Pedro Noguera, dean of USC\u2019s Rossier School of Education, told me recently. \u201cBut over the years, USC also gained the capacity to deliver high-quality online education. It\u2019s an arrangement that outlived its purpose. Our faculty were doing all the work, and 2U was receiving more than its fair share, pocketing more than half of tuition revenue.\u201d<\/p>\n
As Clay Shirky, vice provost for AI and technology in education at NYU, told me: \u201cA full-service OPM buys you a bundle of competencies. If you go with an OPM, you get less change at your own institution. If you do it yourself, you take the longer road, adapting to online learning.\u201d Shirky also reminded me that \u201cCOVID gave faculty some sense of what online is about. When faculty gained experience, online was demystified.\u201d<\/p>\n
Colleges that depend on OPM investments to build, deliver and market remote programs won\u2019t be very happy if proposed government rulings take effect, since it will require that they quickly come up with capital on their own. And these days, as everyone knows, colleges don\u2019t have stacks of cash lying around. [According to Moody\u2019s](https:\/\/www.highereddive.com\/news\/education-department-third-party-guidance-harm-colleges\/649511\/), \u201cInstitutions that have a significant number of online students and rely on OPM partners to deliver online services will likely be most affected by the proposed guidance.\u201d<\/p>\n
If OPMs go under, a deep gash will be felt in remote education. At their best, OPMs, operating in alliance with institutions like Georgia Tech, have helped lower tuition and increase enrollment markedly for high-quality online technical master\u2019s. And OPMs opened wider possibilities for many institutions that lacked the courage or cash to go online on their own.<\/p>\n
In partnership with hundreds of colleges, OPMs enrolled tens of thousands of working and other nontraditional students, many of whom might otherwise never have graduated with a prized degree.<\/p>\n
## What\u2019s in Store?<\/p>\n
The OPM industry is pretty shaky now, with 2U so precarious, the U.S. government is worried it will go belly up soon, [leaving students stranded](https:\/\/www.highereddive.com\/news\/education-department-opms-2u-financial-distress\/712428\/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202024-04-09%20Higher%20Ed%20Dive%20[issue:60875]&utm_term=Higher%20Ed%20Dive). Still, other top companies are doing quite well, with Coursera, Keypath and Academic Partnerships [reporting solid results](https:\/\/onedtech.philhillaa.com\/p\/coursera-market-insights-online-enrollments-opm-market).<\/p>\n
To extend their reach and avoid being saddled with a single line of business that might not pan out, most big OPMs have become diversified, running a mix of product lines. Coursera, [for example](https:\/\/www.classcentral.com\/report\/coursera-q4-2023\/), with its jaw-dropping, worldwide base of 142 million learners largely in its library of online offerings, offers hundreds of corporate and government online training courses as well as dozens of non-credit professional certificates.<\/p>\n
But it\u2019s unclear whether OPMs can continue with their degree-granting business without revenue-sharing arrangements.<\/p>\n
If OPMs go away in universities, there\u2019s a chance they may no longer be crucial at some colleges and universities, especially when every tuition dollar stays on campus. Following the USC example, many may already be poised to carry on on their own.<\/p>\n
And there\u2019s even the remotest possibility they won\u2019t be forced to go away at all. The Education Department may yet bow to academic opposition, and in a longshot, forego its proposed rules to put OPMs out of business at the nation\u2019s universities.<\/p>\n
Still, it looks like OPMs are not sitting around, waiting for the axe to fall. To escape proposed government regulations that may ban revenue sharing, some vendors are already offering flat fees and other payment options. Colleges aren\u2019t sitting idly by either, with some setting up internal online teams, skipping OPMs altogether.<\/p>\n
Original URL: https:\/\/www.edsurge.com\/news\/2024-04-22-are-colleges-ready-for-an-online-education-world-without-opms<\/p>\n","protected":false},"excerpt":{"rendered":"
For more than 15 years, a group of companies known as Online Program Management providers, or OPMs, have been helping colleges build online degree programs. And most of them have relied on an unusual arrangement \u2014 where the companies put up the financial backing to help colleges launch programs in exchange for a large portion … Continue reading Are Colleges Ready For an Online-Education World Without OPMs?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":557,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-558","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/bobubell.com\/index.php?rest_route=\/wp\/v2\/posts\/558","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bobubell.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bobubell.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bobubell.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bobubell.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=558"}],"version-history":[{"count":0,"href":"https:\/\/bobubell.com\/index.php?rest_route=\/wp\/v2\/posts\/558\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bobubell.com\/index.php?rest_route=\/wp\/v2\/media\/557"}],"wp:attachment":[{"href":"https:\/\/bobubell.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=558"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bobubell.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=558"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bobubell.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=558"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}