Online Program Managers Are Not the Enemy
Despite alarmist depictions, they can help colleges — if used right.
The headlines are hard to miss: A “creeping capitalist takeover of higher education” is underway as “college finances are being eaten from the inside” by online program management companies. These “predators” seek to “exploit vulnerable institutions” as they “siphon off half or more of the tuition dollars.” So argue Erik Gilbert (in The Chronicle) and Kevin Carey (in the Huffington Post) in two of the more provocative essays from a range of recent think pieces that fall somewhere along the continuum between justified concern and irresponsible, alarmist thinking.
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The headlines are hard to miss: A “creeping capitalist takeover of higher education” is underway as “college finances are being eaten from the inside.” The supposed culprit? Online program management companies. These “predators” seek to “exploit vulnerable institutions” as they “siphon off half or more of the tuition dollars.” So argue Erik Gilbert (in The Chronicle) and Kevin Carey (in HuffPost) in two of the more provocative essays from a range of recent think pieces that fall somewhere along the continuum between justified concern and irresponsible, alarmist thinking.
It’s reasonable to be concerned about OPMs, especially given continued regulatory scrutiny by the Department of Education, the Federal Trade Commission, and congressional inquiries into OPMs specifically. Those investigations tend to focus on potential abuses and the excessive redirection of federal student aid and tuition dollars to big corporations. Yet the pause given by these legitimate concerns risks turning into paralysis if we allow the discourse around such complex challenges to be marred by oversimplifications and faulty assumptions.
The problem with much of the criticism of OPMs is that it assumes academic culture will, somehow, always succumb to the corporate mind-set.
Gilbert, invoking a Century Foundation report, argues that colleges are being “taken over from within” by OPMs, going on to cite a “steering committee” at one university that included staff members from an OPM. This alarmist example doesn’t help us understand the extent to which colleges can and should retain accountability for the content of their marketing, recruiting, and advising messages. Meanwhile, Carey suggests we make “the price of online degrees proportional to what colleges actually spend to operate the courses,” failing to recognize that schools do not separate those expenses from the full cost of educating the student throughout the program of study. These critics suggest that online programs are cheaper to run than those on ground, which is often not the case.
We need a more informed discussion around OPMs. As a dean of continuing studies and former associate dean of academic affairs and general studies, I’ve seen firsthand what can go right in such arrangements. And the reality is that the reasons OPM agreements go wrong are much more complex than presented in the press, and typically involve missteps by both the university and the vendor.
For instance, the case recently highlighted in a Wall Street Journal piece on University of Southern California’s use of 2U — an OPM — for its social-work program illustrates a range of issues. These include potentially over-aggressive recruiting, a lack of upfront strategy, and a failure to provide adequate career support while launching an expensive program in a field with low entry-level salaries. It’s a complex situation, and not entirely a result of the actions of the OPM.
The problem with much of the OPM media criticism is the assumption that academic culture will, somehow, always succumb to the corporate mind-set. That is alarmist and unrealistic thinking. Like it or not (and indications are that many faculty members may not), OPMs are here to stay. As some examples highlighted by Higher Ed Dive show, OPMs are responsible for benefits such as freeing up classroom space at Amherst College, providing instructional-design support to Vanderbilt University and the University of Maryland system, and helping Howard University start an online M.B.A. program. A market-research firm tracked no fewer than 85 new OPM contracts in the first six months of 2020 alone.
If OPMs are such predatory partners, why would universities continue to contract with them? The answer is that OPMs can be valuable tools for universities as they try to leverage technology to meet challenges of scale and complexity — whether in coping with declining enrollment, enhancing programs for adult learners, or better prioritizing institutional resources and student needs.
As a career academic administrator, I’ve encountered my share of frustrating scenarios. I’ve witnessed the heartbreak of veterans coming through the doors at a large mid-Atlantic university only to learn they needed student loans because their GI Bill benefits had already been spent on for-profit programs whose credits didn’t transfer. I’ve watched as a private university in New England endured the fixed costs and limited scalability of building its own call center when such functions can be outsourced with cost savings and flexibility.
Having navigated such experiences, I have learned that the defensive crouch of “let’s just do it in house” is not the answer to everything. I have also learned that proper online program management requires the steady and ongoing translation of academic values into operational execution.
Thankfully we’re already seeing more industry progress toward agile online program management, including, as my Georgetown colleague Edward J. Maloney has written, toward more dynamic criteria for when and how to engage with OPMs. On the technology front, resources like the International Institute for Analytics, a nonprofit think tank, are helping some colleges adopt many of the best strategies for IT independence and data maturity that have eluded academe for too long. I’ve also had firsthand success in à la carte OPM engagements. These include vetting OPMs for their reach into certain populations, like military-connected or high-school students, to secure narrow contracts emphasizing those demographics; and subcontracting with a diversified, global ed-tech company only for its top-tier recruiting services.
These examples show how OPMs can be used less as monolithic service providers and more like strategic partners for discerning universities to selectively choose what services and functionalities they want. To the extent that a similar approach might serve your institution well, here are five tips to keep in mind as you customize your own approach to managing OPMs:
- Gauge institutional resources and the college’s appetite to withstand financial risk. Colleges have a level of fiduciary responsibility that private corporations and entrepreneur investors don’t. We may be entrepreneurial in specific practices and approaches, but we are not entrepreneurs and we should not invest institutional resources as though we are venture capitalists. These are bright lines to observe, especially where sources of funding are tied to tuition.
- Consider total cost of ownership in assessing options. The choice to engage an OPM must be informed by holistic financial assessments that include the hidden or ancillary costs behind each option. If we’re worried about OPM revenue share, for instance, we should also do the proper analysis and forecasting of what it would really cost over a period of years to build a program in house — and then weigh that against the cost of going with an OPM.
- Evaluate and expand options in revenue share and fee-for-service models. Colleges should work with OPMs to develop a range of financial options, a matrix of choices that display the costs and benefits of any revenue share or fee-for-service model. Leverage knowledge of an OPM’s business model to negotiate contracts with favorable terms that include guaranteed performance benchmarks or diminishing revenue shares for the partner over time as a program scales and costs stabilize.
- Design the OPM agreement to emphasize the student experience and the culture of the college. The OPM should invest heavily in high-quality student experiences, pumping money into technology, analytics, and advising. Prospective students should experience the institution’s culture from the outset, with a seamless transition into their programs of study. This requires close collaboration among the OPM and institutional team, including the faculty.
- Ensure that the academic institution maintains oversight of the marketing and recruitment functions the OPM supports. Universities should retain a degree of autonomy and strategic oversight of their marketing and recruitment functions, including via separate digital-marketing service providers distinct from the OPM, if necessary. From admission criteria to marketing messages and admissions advising, the model should be transparent and the college should guide and approve processes and content.
These strategies can help institutions point an OPM relationship in productive and mission-centered directions. Running throughout, as Erik Gilbert and others rightly point out, is the need for more transparency around such arrangements. Another positive step would be to clarify governance and best practices — perhaps through an expansion of the Education Department’s Education Innovation and Research Program funds to include postsecondary education with a higher-education focus.
The department could perform a study of public-private/OPM partnerships with various types of institutions and partner models, making the results available to the public. Such voluntary studies could elucidate the component parts and outcomes that allow colleges to remain accountable for education, avoid unnecessary legislation, and easily replicate lower cost and higher-quality partnership models. We need to normalize quality decisions around OPM contracts and the design of these partnerships — factoring in heavily the implications for institutions based on their size, missions, and finances. Furthermore, consortia models could allow nonprofit colleges to share best practices in line with compliance guidelines — helping institutions of all sizes make OPM arrangements work for them without having to reinvent the wheel each time.
The imperative here is to separate the signal from the noise — the noise being the misrepresentation of the true costs of producing, marketing, and delivering online programs. Different groups within higher ed may continue to disagree as to the utility of OPMs, but we need to elevate the conversation toward a more productive, data-driven dialogue about what’s actually working for institutions — and what isn’t. This could help solve the modern dilemma of colleges’ struggling to balance financially sustainable programming with the necessity to support the teaching, research, co-curricular and business operations of a quality institution.