Good morning, and welcome to Thursday, July 11. Rick Seltzer wrote today’s Briefing. Julia Piper compiled Comings and Goings. Get in touch: dailybriefing@chronicle.com.
Ending the stalemate over OPMs
The states are the laboratories of democracy, so pay attention to an experiment in regulating online education in Minnesota. Our Taylor Swaak has the story.
A new Minnesota law restricts what public colleges can give away in deals with online-program managers. Third-party OPMs have become a major target of reformers across the country who think the contractors escape government oversight and are often bad deals for students. The Minnesota law regulates:
- Tuition sharing: Colleges in the state’s system can’t sign deals that pay OPMs through tuition sharing, which gives the contractors a percentage of the revenue an online program generates.
- Intellectual property: OPMs can’t be given ownership of faculty members’ intellectual property.
- Reporting requirements: Colleges that hire OPMs must submit annual analyses of the arrangements to the state legislature.
Tuition sharing is the big fish. Tuition-sharing agreements helped to fuel an online-education boom a decade ago by allowing colleges to start programs with little upfront investment. Critics have come to loathe the deals, arguing they siphon revenue away from colleges while encouraging OPMs to recruit students too aggressively and pay too little attention to program quality.
- Minnesota’s St. Cloud State University reportedly splits online-program revenue 50-50 with the OPM Risepoint. That’s a tough pill for some after the university sought deep cuts to close a budget deficit.
The goal was to curb “predatory and pernicious practices” and make OPM relationships accountable to the public, said State Rep. Nathan Coulter, a Democrat, who introduced Minnesota’s legislation.
Coulter calls himself an OPM skeptic. He favors an alternative to revenue-sharing contracts: fee-for-service deals, which he said include concrete payment amounts that members of the public can vet.
Will OPMs flee Minnesota? “I find it extremely hard to believe that no one could make a go of it in the state of Minnesota with the new regulations that we passed,” Coulter said. But leaders at St. Cloud State and Risepoint have suggested a ban on tuition sharing would prevent the small colleges that rely on that payment method from offering online programs.
The bigger picture: Minnesota is now the test case for tighter OPM regulations, after federal efforts failed to gain much traction and bills in New Jersey and California died in committee. But the once-hot OPM market has cooled, raising the question of whether policymakers are fighting the last battle.
Read the full story: Why One State Is Cracking Down on Online-Program Managers