Critique of Century Foundation's OPM Report

The discussion that we need on the Online Program Management industry.

August 8, 2017

The Century Foundation has provided our community with a valuable resource in releasing its 8/7/17 report on the Online Program Management (OPM) market - The Private Side of Public Higher Education.  

The report, which analyzed over 100 agreements between for-profit educational companies and non-profit public institutions, is highly critical of the sector.

The main conclusion of the report is that public institutions have entered into with OPMs to develop, market, and run online educational programs have the potential to put students, taxpayers, and institutions at risk. This downside risk includes a lowering of educational quality, as there are "clear financial incentives for OPMs to make online programs larger and more expensive for students, while simultaneously reducing expenditures”.

The most important contribution that I think this report makes is in its call for transparency. As the report points out, the "potential prioritization of dollars over learning is particularly risky because the involvement of these external entities is rarely apparent to consumers…. Students are therefore likely assume — incorrectly — that a school’s online programming is entirely sponsored, created, and managed in-house”.

While I am greatly appreciative to the Century Foundation for conducting this research and producing this report, I do have some criticisms.

My first critique is more on language than substance, but I still think that it bears mentioning. The report places OPM providers (such as AP, Pearson, Wiley, 2U, and Bisk) in the same category as LMS (learning management system) companies (such as Blackboard, Instructure, D2L).

This decision to classify LMS companies as OPM providers seems strange, as the business models are totally different. OPM companies customarily de-risk the launch of a new online program by providing upfront capital, and then earn their investment back with a revenue share of tuition.  LMS companies provide a platform for a service.  The report would have been much stronger if the LMS market had been kept separate.

My second criticism of the The Private Side of Public Higher Education is that I fear that the report’s call for transparency in contracting - which I support - gets overshadowed by a more ideological critique of the idea of public / private partnerships. The test for an OPM deal between a public institution and a private company should not be the tax status of the partner, but rather the value that the partnership gives to all stakeholders involved.

I agree that "OPMs represent the outsourcing of the core educational mission of public institutions of higher education” - and therefore need to be undertaken with extreme care and strong commitments to oversight and transparency.  Contracts between public institutions and OPM providers should be evaluated, however, on the outcomes of the arrangements - and not on the for-profit status of the OPM companies.

The report would have been stronger if it included more voices from public institutions about why they entered into these OPM arrangements, and what has been the result.  From what I know about the OPM story, there are both positive and negative outcomes of these partnerships. Many institutions are very happy with both the quality of the online programs that have been produced through partnerships with OPM providers, as well as the revenues that these arrangements have provided.  Conversely, I know other schools that are looking to leave their arrangements with OPM providers once the contract length expires.

The point is that there are better and worse OPM providers, and better and worse OPM deals. There is nothing inherently wrong with the model where companies provide upfront capital and then take a share of the revenue produced by tuition. This model has enabled many schools to move into the online learning market who would otherwise not have been able to do so. At the same time, there should be a clear understanding of the potential downsides of entering into an OPM deal for both schools - and of the risks for other stakeholders (such as students, taxpayers, faculty, etc.).   

The Private Side of Public Higher Education will serve an important function if it increases our community’s knowledge and understanding of the OPM market, and if the report sparks discussion on these partnerships.

Currently, it is very difficult for colleges and universities (both public and private) to make sense of the OPM market.  It is not clear how the different OPM companies are differentiated from one another, and it is very difficult to get aggregated information from across schools that have entered into these deals.

We need to have a thorough, balanced, and informed discussion of the pros and cons of partnering with an OPM provider to launch new online programs.

I’m hoping that The Private Side of Public Higher Education will catalyze such a discussion.

What do you make of the report?


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