Why the Morehouse/2U Partnership Is a Big Deal

Online program management companies don’t get a lot of love. Many people don’t like the idea that OPMs often take half to two-thirds of all tuition revenues from their university partners. Or that contract lock-ins are measured in years. Not to mention all the money that OPMs spend on marketing. Fair enough. I share these concerns as well.

But like most things where everyone is sure they know the answer, the OPM reality is more complex. There are good university/OPM deals and bad university/OPM deals. There are good and bad OPMs.

The recent announcement of a partnership between Morehouse College and 2U should cause us to at least interrogate our most deeply help OPM beliefs.

Morehouse will be collaborating with 2U to create Morehouse Online. The first program to be offered will be a degree-completion program, designed for adults who wish to finish their degrees. One population that this program will serve is men who were enrolled in Morehouse but who left before receiving their degree. The population of learners that the degree completion program can serve will grow from that base.

From reading the announcement of the partnership and looking at the Morehouse strategic plan, it seems that the degree-completion program will likely be the first of a range of online programs that the college will collaborate with 2U on. The strategic plan highlights the theme of moving “Morehouse Beyond Borders,” with a specific goal (No. 8) of developing new degree and nondegree online programs.

For Morehouse and other tuition-dependent institutions with strong and respected brands, I think that a strategic OPM partnership could very much make sense. This sort of partnership, if handled correctly, will allow Morehouse to develop internal capabilities and competencies.

The surplus that Morehouse receives from the online programs can be invested in the core mission of the college. As long as Morehouse does not make the mistake of becoming overly dependent on this surplus, and as long as the opportunity costs for this initiative don’t crowd out other potential projects, then this partnership with 2U seems like it will benefit the college over the long term.

This Morehouse/2U partnership reminds me of what Simmons University has done in the online space. Simmons has had a strategic high-level partnership with 2U since 2013. In that year, Simmons launched a “2U-powered” (the jargon that 2U uses) master of science in nursing. Since then, Simmons has worked with 2U to launch online master’s programs in social work (2014), behavioral analysis (2016) and an M.P.H. (2017). In 2020, Simmons launched an online doctor of nursing practice (D.N.P.) and an online undergraduate degree completion program with 2U. And in 2021, a doctorate of social work was added to the graduate online portfolio.

From what I can tell, the partnership with 2U has been good for Simmons. In a 2019 WBUR article about the Simmons/2U partnership, Simmons’ previous president Helen Drinan is quoted as saying, “It was July 1, 2008. We didn’t have enough money and cash was practically at zero.” Simmons had laid off 72 people in order to reduce expenses.

In 2011, Simmons tried to launch an online program on their own, but according to the WBUR article, “Drinan says they quickly realized they didn't have the resources to fully support the program and give students a quality experience.” Today, online programs make up the majority of revenue at Simmons.

The question for the Morehouse/2U partnership is if Morehouse is better off working with 2U to launch online programs, or should they be doing this on their own?

We can extend this question to all tuition-dependent institutions.

Is the Simmons story an outlier, or is it evidence that other schools should be investigating these partnerships?

Morehouse has a storied history, a mission-driven culture, a differentiated value proposition and a terrific brand. What Morehouse does not have in abundance is deep expertise in online learning -- or the capital (being tuition-driven) or the time to develop this expertise.

In working with 2U, Morehouse will give up a significant revenue share for future online programs. Revenue, however, is not profits.

With 2U providing the capital and taking the risks -- Morehouse will likely realize significant margins (profits) on its future online programs.

Keeping 100 percent of revenues doesn’t do a school any good if those revenues never materialize, or if the costs of starting a new online program are prohibitive.

If this Morehouse/2U partnership is truly beneficial to Morehouse, then I think those of us who have been most skeptical of the bundled OPM revenue-share model will need to revise our thinking.

If the facts change, our opinions should change as well.

What I will be looking for in this Morehouse/2U partnership is transparency. We will need to understand as much as possible about how this is working for Morehouse.

One way we can better understand this partnership is by doing whatever we can to support Morehouse College.

In this case of a school/OPM partnership, our entire higher education community should be pulling for the success of this initiative.