The OPM Industry, Concordia University and COVID-19

It takes a crisis.

March 4, 2020

After COVID-19, the biggest story in higher ed today may be the closure of Concordia University Portland. More on COVID-19 in a minute.

Across the postsecondary ecosystem, academic leaders are passing along articles about the various causes of the closure. Perhaps most striking is Concordia’s fatal relationship with HotChalk, an online program management company.

One colleague of ours sent us this Feb. 28 article from The Oregonian, titled “Concordia University’s Online Vision Hid Grim Reality” with the one-word commentary of “wow.”

That Oregonian article provides the most in-depth description yet published of how Concordia’s 115-year history came to a sudden end due to the university’s unsustainable contract with the OPM.

The article reveals that in 2019 the university was paying HotChalk 50 percent of its revenues and that the contract with the OPM left Concordia with an obligation to the company for as much as $400 million.

Concordia seems to have created an unsustainable financial situation by betting on its ability to pay HotChalk to rapidly grow enrollments in online programs.

For a while, the bet seemed to pay off. Concordia became one of the nation’s largest providers of online master’s degrees in education. Increasing competition and declining demand, however, caused the total enrollments in Concordia to drop from a peak of 8,000 to 5,400. Phil Hill has a good analysis of this here.

The combination of declining enrollments and growing revenue commitments to HotChalk -- according to The Oregonian, “Concordia would keep just $1 of every $3 in shared revenue by 2024” -- forced the Board of Regents to decide that the university had no sustainable economic path forward.

What does HotChalk have to say about Concordia? Again, to quote the story in The Oregonian, “A spokesman for HotChalk said in a statement that company executives were sad to learn Concordia would close. He declined to answer detailed questions about the company’s ties to the school.”

And, “HotChalk also declined to discuss terms of the agreement or say how much it is owed. In its statement, the company said it had ‘made long-term, significant and ongoing investments’ in Concordia.”

How should those of us across higher ed who now work with an OPM provider, or are considering doing so, think about the story of Concordia and HotChalk? What might this story mean for the future of the OPM industry?

There may be good reasons that schools choose to work with an external vendor to support their online programs. Some use the OPM to help them build capacity to help with access and equity. Others might try to leverage a relationship with an OPM to learn how to move online.

It’s this latter rationale that is probably of the greatest concern and brings us squarely back to COVID-19. Of the many COVID-19-related challenges facing higher education right now, instructional continuity is one of the most pressing. Many are trying to figure out how they will continue classes if their brick-and-mortar campuses shut down.

This is in fact already happening. Right now, study abroad programs in many countries are sending students home in the middle of the semester. If the virus spreads farther -- as almost all indications suggest it will -- many schools will have to decide about shutting down completely.

What this terrible situation highlights is just how much teaching online is a core competency of higher education. The ability to move classes online, to teach in multiple modalities (and to move fluidly between them) is crucial for any institution of higher education today, regardless of their investment in online education.

Schools that continue to outsource this capability and capacity will likely have great difficulty gathering the resources to help their faculty move courses online at moments of crisis.

To be honest, any school will have trouble right now. This is a heavy lift. But it’s a lot more bearable with instructional designers and instructional technologists there to help.

The Concordia/HotChalk story should be a wake-up call to the leaders of OPM companies that sticking to business as usual is not an option. The challenges facing higher ed because of the coronavirus should be another.

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