What was supposed to be a recount of practices by Online Program Managers (OPMs) became a historical tirade of malfeasance by for-profit colleges in the face of limited, if not tainted regulation.
New America’s Kevin Carey wrote “The Corporations Devouring American Colleges” and was published in early April. As the author mentions a couple of facts and news about OPMs, he springs factoids materially unrelated to the technology and business models available in online learning: From the admissions scandal, to federal prosecutions and drug addictions. (He also thinks some OPMs have goofy names.) Illegal practices, which throughout the piece none are attributable to OPMs, are nevertheless intertwined in the narration. There is an allusion to a more serious problem in how the U.S. government regulates education, demands transparency and grants public funds. But the author prefers to indict OPMs as representative of all online learning, and “our most trusted universities” for the reputational risk they are inflicting on their own names by partnering with them.
The article has been criticised (and defended) from many angles. Here, our focus is on the technology and the business models underneath.
Online learning is only expected to grow further, to a large extent due to the profitability of new models that can still spring up. Awareness and understanding is essential for fruitful discussions about access to opportunity, oversight and compliance. But Carey seems willing to paint the whole OPM concept not only as “obscure and shady,” but indicative of online learning practices at large. He weaves a couple of events, which should not be mistaken for proper historical context. Which is why it feels important to ground some facts and highlight evidence.
What is an Online Program Manager?
So we’re clear: OPMs are not for-profit colleges.
Any type of learning organization can partner with an OPM to structure, deliver and promote online education. They do so regularly on the U.S. across the spectrum of modalities (online, hybrid) and degrees (graduate, undergraduate, or less formal). While universities all over the world set up technological partnerships with tech companies, most notably Learning Management Systems, the OPM phenomenon is still mostly confined to the U.S.
OPMs, for their part, can help learning organizations identify opportunities, structure programs and bring education products to market. Almost all of them are private, profit-based organizations, but that does not prevent them from partnering with profit-seeking and non-profit organizations alike. As it is common on new sectors, risks are high and so are potential returns. But high margins never last. Eventually new competitors enter the playing field, and consumers get educated.
The sudden “gold rush” of online learning, as well as the cyberspace at large, opens the gates to risk takers and fortune seekers, much like actual gold mines at their height. OPMs find a gap they can fill to deliver learning in a nascent space, innovative business models often anticipate government oversight. Not that there isn’t any. Civil codes, including consumer protection law, still applies.
Providers of new digital services in education, are, like in every other context, a source of new value and new concerns alike. There are better ways to partner and secure governance in a contract than others.
Private institutions, private contractors, social good?
The first wave of criticisms stems from the idea that OPMs introduce profit motives and market dynamics into an education sector led by private organizations. In fact, wealth has been critical at the foundation of every elite school in the U.S. The same goes for the partnerships between reputable institutions and corporations, industry leaders and technological innovators.
Current partnerships held by universities with OPMs are not different from others which throughout history have been essential to keep them at the forefront of industrial knowledge. Last year, 13.9% of 2U’s operating expenses, went to research and development.
The author notes that universities have been historically restrained about their finances, their endowments worth hundreds of billions of dollars. Meanwhile, 2U, the biggest OPM, is a public company worth nearly $4 billion USD that discloses its financials on a quarterly basis.
5/ The programs are almost always very expensive–@USC offers an online master's in social work for $110,000–and very profitable. Instruction only costs 15%, compared to profit margins of 43%. pic.twitter.com/8LhsFQIBEn— Kevin Carey (@kevincarey1) April 2, 2019
Many more objections can be made on the face of economic evidence. The argument on how much should an online degree should cost compare to one in-person deserves attention. Of course, it’s flat out wrong to assume startup costs of online learning are just a fraction of in-person experiences. But perhaps the most concerning is the implication that OPMs have some responsibility on the skyrocketing costs of Higher Ed in the U.S. Chip Paucek, CEO of 2U, acknowledges these increases have benefitted the company. Instructure’s Josh Coates has made statements in a similar vein. But there is no accounting possible that could attribute the trillion-dollar-plus debt in student loans to a category of companies that as a whole will not surpass $10 billion in value by 2022. And this is not even considering basic facts, such as that OPMs have limited presence on undergraduate programs and are more prominent on the graduate level, while the opposite is true in student debt; or that OPM is just as active on the increasing number of colleges and universities featuring reduced or free tuition.
Carey also seems very concerned about the damage to the public trust that long-standing instutition risk by partnering with OPMs. Paucek shares some stats: In the 11 years running, U2’s programs have a sustained retention rate of 82-84%, and its partners, including Ivy league schools, have all continued the collaboration, many of them extending deals beyond 2030.
In cases where private institutions have made the choice to lower the cost of tuition, or eliminate it altogether, OPMs have played an equally key role. There is also evidence to suggest that programs where OPM are involved are more diverse and accessible.
Online Program Manager collaboration, done right
As in any contract between two parties, trust is both essential and at stake. There are reasonable concerns for institutions looking to partner with OPMs, which can go unacknowledged under Carey’s diatribe.
Know the limitations
True whenever a service is translated into a new delivery channel. There are aspects of an in-person, in-campus experience the online medium will never replace. Some subjects are more suitable for an online transition. In some cases (computer science fields could fit the bill) fully online can even be superior to in-person.
Many organizations can also expect and OPM to increase enrollments and revenues, and it can be true. But OPMs cannot offer performance-based bonuses to marketing roles, and more generally, the cannot introduce behaviors forbidden by law to universities and colleges.
Capacity building and knowledge transfer
It is reasonable for OPMs to profit from the risks of diving into uncharted territory. But once a delivery mechanism has been standardized, the role of OPM should be limited, as the organization builds capacities internally. This can be secured contractually. It is also incentive for OPMs to work on new avenues of value and increase R&D investment. In fact, many OPMs are starting to adapt their revenue models to reflect a more competitive market.
Transparency and consumer choice
As OPMs become a source of standardization, they can play a key role in helping customer choice by making offers more comparable. Regulations should help in demanding information be public.
Innovation and risk-taking in education, within bounds
As tech companies, OPMs must remain at the forefront of innovation in their field. While an institution has a fiduciary obligation that promotes conservative strategies, OPMs have the opposite pressure. But as they are willing to take more risks, it follows that they can reap sizable rewards, and require higher upfront capital expenditures.
OPMs can try new approaches in education and technology. They can often find themselves within legal gray areas, which some argue are a necessary, if perhaps hidden side of corporate innovation. “Gray” of course refers to missing or vague regulation and should never be construed as promoting illegal or unethical practices. It also does not imply that all innovators are automatically or implicitly against regulations.
Partnering with a provider of online solutions today should be synonymous of plugin one or several new data streams. Organizations should secure agreements where OPMs can provide user or student intelligence, which can be essential for process improvement and new product development.
- Universities continue to explore partnerships with OPMs, increasingly with no pressure from them. University of Massachusetts is reportedly working on an ambitious online offering, and the need for an OPM to partner with is all but an open secret.
- In one of the few but expected to increase ventures of non-profit and impact investing into online learning, The Rise Fund and Arizona State are launching InStride, a middle point between professional education institution and workforce and professional development agency. Among other things, it will partner with companies to enable employees to pursue degrees funded in part by the employers.
- Despite doubling revenues, 2U‘s losses also expanded in 2018 compared to 2017. (2U has never been profitable.) Reception of its acquisition announcement of bootcamp company Trilogy were mixed. It is the second in a trend of “workforce accelerator” investments with international profile. Bootcamps have also found themselves as a foible in news coverage recently.
- OPM The Learning House and Christian Concordia University St. Paul have extended their partnership throughout 2025, tallying 13 years. It focuses on CSP’s online healthcare and social services offerings, which will expand and incorporate TLH’s data-driven initiatives.
- Another nursing skills gap warning. Only this time, iDesign is on the case. A partnership with Salve Regina University expect to address Rhode Island’s reported critical shortage across the Northeast. Accessibility, quality and affordability are at the core of the press release.
- Udacity, a key actor in the success of Georgia Tech’s famous online CS degree, and which technically makes it an OPM, announced a restructure that involves a 75-employee layoff, or 20% of its workforce. Pioneering the idea of nanodegrees, its 6-month CEO pledges to go back to focus, cut costs and increase corporate partnerships.
- Noodle Partners are some of the first OPMs to lower the financial burdens of their agreements, as expected. Partnerships with the University of Tennessee, University of Pittsburgh School of Health and Rehabilitation Sciences, and most notably the University of Michigan MBA (hybrid), make Noodle Partners an industry leader. The rest will likely follow suit.
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