Are Colleges Ready For an Online-Education World Without OPMs?

It’s an OPM paradox — as companies lose money, colleges make it.

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’s bottom line, but how the stock exchange rewards it.

When colleges turned to OPMs, they must have known it was dicey. Sharing half your tuition revenue with your provider is “outrageous,” a senior New York University faculty member, Thomas D’Aunno, grumbled years ago, just as he was signing up with an OPM against his better judgment.

“The question was which OPM we were going to work with,” he told me with resignation, “not whether we were going to work with one.”

Outsourcing vs. Insourcing

When OPMs first infiltrated higher ed, convincing well-known colleges to outsource digital learning, I was among those who didn’t welcome them, fearing they’d do the job I thought more appropriate for faculty and college administrators to tackle.

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.

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.

Once they got the hang of it, I hoped, colleges could then jump off their training wheels and go online entirely on their own.

That’s what happened recently at the University of Southern California when it canceled its long-term contract with 2U, a top, full-service provider. USC’s cancellation was just one turnabout in a cascade of dozens of colleges fleeing OPMs in recent years.

“2U had the technology and the means at first,” Pedro Noguera, dean of USC’s Rossier School of Education, told me recently. “But over the years, USC also gained the capacity to deliver high-quality online education. It’s 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.”

As Clay Shirky, vice provost for AI and technology in education at NYU, told me: “A 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.” Shirky also reminded me that “COVID gave faculty some sense of what online is about. When faculty gained experience, online was demystified.”

Colleges that depend on OPM investments to build, deliver and market remote programs won’t 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’t have stacks of cash lying around. According to Moody’s, “Institutions 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.”

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’s. And OPMs opened wider possibilities for many institutions that lacked the courage or cash to go online on their own.

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.

What’s in Store?

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. Still, other top companies are doing quite well, with Coursera, Keypath and Academic Partnerships reporting solid results.

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, 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.

But it’s unclear whether OPMs can continue with their degree-granting business without revenue-sharing arrangements.

If OPMs go away in universities, there’s 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.

And there’s even the remotest possibility they won’t 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’s universities.

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’t sitting idly by either, with some setting up internal online teams, skipping OPMs altogether.