“Invest in your future” reads the program webpage for the online Master of Business Administration in Finance at the University of West Florida. Here, potential students are met with information on the structure of the program, the tuition, and the call to “advance your qualifications with a master’s in finance.”
And, if they sign up for more information about the program, they will receive almost daily emails from an enrollment specialist sent from a @uwf.edu email and phone calls from a toll-free number. The enrollment specialists are eager to provide more information and help interested potential students navigate through the admissions process.
But, the university fails to mention that it has partnered with a private for-profit company, Academic Partnerships (AP), which receives 40 percent of the revenue in return for a series of marketing and recruitment services. And the enrollment specialists – whose titles match the AP provided recruiters – sign their emails as from the university, not AP.
The enrollment specialists are, in fact, not employed by UWF, according to Andrea Failing, director of program management. She says these individuals work for AP and are given information on the admissions process to “maintain a consistent voice.”
The University of West Florida example is not unique. In July 2021, more than 550 colleges across the US – most of them public or nonprofit – were working with for-profit companies, so-called Online Program Managers (OPMs). But in a sample of 111 partnerships across 57 public universities across 20 states, 27 percent were not visible anywhere in the University’s website domain while 20 percent were mentioned somewhere within the institution’s domain but not in a way that made it clear that there is an external partnership in place.
This makes it hard or nearly impossible for potential future students to find information about the partnership without prior knowledge of its existence. It also weakens the accountability of how public money is spent. In the 2019-2020 school year, federal and state aid provided $430 billion in public university funding, according to the National Center for Education Statistics.
The information published in this article comes from contracts between public universities and OPMs. They were obtained through several rounds of Freedom of Information public records requests to universities in every state. The first FOIA requests were filed by the independent think tank The Century Foundation in 2017 with new requests in 2019 and 2020. Columbia Journalism School filed additional FOIAs to the same schools in the fall of 2022. This article reflects 54 contracts from 22 schools received in 2022 and 93 contracts from 57 schools obtained in 2019.
Contracts with certain companies, such as Blackboard and Instructure, have been excluded if they only provide the school with an online learning platform. This was done to ensure that the partnerships investigated here all include other services than providing software. The sample only includes current contracts or contracts that expired after 2019.
A turn toward online education
The number of universities and colleges that are using private for-profit companies such as Academic Partnerships, 2U, and Pearson to generate more revenue and stay competitive in the expanding market of online education that has increased throughout the last decade.
In 2010, there were at least 20 new partnerships between colleges and OPMs – in 2020 the number had risen to 165, according to the US Government Accountability Office. By July 2021, more than 550 colleges were working with an OPM to support at least 2,900 education programs. However, a lack of comprehensive data suggests that the actual number could be much higher.
A combination of the Covid-19 pandemic, which led to widespread virtual schooling at every level, as well as overall falling enrollments, is forcing universities to come up with new solutions to stay in business, according to Phil Hill, a market analyst and independent consultant on higher education.
“It’s putting pressure on schools. You need to figure out some new program options, and online is the most promising. But at the same time, every school is doing it. So, there’s a lot more competition,” he said.
The increased use of OPMs also comes as a response to perceived changes in online learning and institutional needs to stay competitive in a market where students are increasingly demanding an online option, according to a new report from the University of Louisville. When partnering with an OPM, the university gains access to existing knowledge and experience in online education and initial financial capital to launch the programs.
“For some schools, OPM is going to be an option because they’re going to want to move quickly with fewer resources available,” said Jeff Sun, professor of Higher Education at the University of Louisville and one of the authors of the report.
Who is teaching your classes?
Online Program Managers undertake a wide range of tasks for the universities, but the scope of the contract varies from partnership to partnership. Sometimes the OPM just provides marketing of the programs or courses, but in 11 of the non-transparent partnerships, the OPM is directly responsible for the course content and instruction.
Victoria College, TX, has a partnership with the Center for Legal Studies. The OPM, specializing in continuing legal education, provides eight certificate and training courses, according to the contract obtained by Columbia Journalism School.
The Center for Legal Studies is responsible for the “curriculum for each of the courses […] along with instructors” while the school provides certificates of completion and advertisement of the programs. The programs are visible on the Center for Legal Studies website but an advanced Google search finds no mention of the OPM within Victoria College’s website domain.
In return for the services, the Center for Legal Studies is paid 80 percent of the gross tuition revenues of the courses. The tuition ranges from $575 to $1,289 per student depending on the course.
In July, The Wall Street Journal reported that the online program manager 2U recruits students to online training programs – so-called boot camps – and certificate programs under the universities’ names and fails to tell prospective students that the instruction and curriculum are provided by the company – not the university. In some cases, the OPM was mentioned on the University’s website, but in an unclear manner that could lead students to enroll in the program and only later realize that it is run by an OPM.
“It’s a moral question and making sure that students are aware of who’s involved in this thing, that they’re willing to spend a whole bunch of time and money on. Student protection is what’s at stake,” said Stephanie Hall, a senior fellow at the Century Foundation.
Public-private revenue sharing
In certain programs at public universities, the majority of money students pay for a course is going to a private company. The partnership contracts in our sample mentioned tuition revenue sharing from 18 to 85 percent as a part of their payment structure.
Ohio University relies on a partnership with Pearson, a commonly employed OPM in the sample, to develop and create online programming for 13 master’s degree programs, with revenue shares up to 85 percent in some cases.
This payment structure between public universities and private OPMs is potentially concerning, especially when student recruitment is involved, according to Hall.
“That’s the biggest red flag I think, just the incentive to turn what should be an academically-focused, student affairs-focused process into a sales pitch,” she said.
The Higher Education Act bans incentive compensation for universities. It is illegal for college recruitment teams to receive additional commissions, bonuses, and promotions based on the number of students they successfully secure and enroll, the Department of Education explains.
In 2002, the Department of Education allowed “safe harbors” permitting incentive compensation for organizations that provide recruitment in addition to other services, according to researchers at UC Berkeley. Several OPM contracts sampled fall into this category: They offer recruitment alongside other services, so they’re technically still in regulation.
In 2011, the Department of Education released a “Dear Colleague” letter, which set circumstantial guidelines for revenue sharing and the recruitment process. But the letter’s guidance is too informal to reshape the growing OPM industry, according to Hill.
“It’s sort of crazy that the oversight from the Department of Ed around this whole market is based on an informal guidance letter,” Hill said. “So, there’s a lot of pressure for them to rethink that or formalize it or do something a lot better with it.”
Recently, this has gained political attention as well. In December 2022, the Democratic chairs of the Senate and House education committees sent out a letter recommending that the Department of Education conduct a formal legal review of the current guidelines for OPM’s and the disclosure requirements for OPM partnerships.
The future of OPMs
But with the recent political attention and key universities such as Arizona State University leaving the OPM market, universities and students may be subjected to major changes. Hill says that with changes in demand, he predicts that companies will be purchased or combined.
“What happens if a company either goes out of business or gets sold? Does that trigger a case where the school can decide whether to continue working with that vendor who’s now been acquired by somebody else? What if there’s nothing in the contract? The answer is the new company who owns stuff takes over the contract,” he said.
According to Jeff Sun, the University of Louisville professor, university employees should have the opportunity to renegotiate terms when mid-contract acquisitions occur. “Some of the bigger companies or even the moderate-sized companies got bought out. That could actually present more problems, not less problems,” he said.
In order to best protect student interests, the 2011 guidelines must be rescinded, closing the incentivized recruitment “loophole” altogether, Hall said. She also recommends more rigorous programming reviews and audits, so at the very least, the Department of Education can keep tabs on these public-private partnerships.
“At the end of the day, what really has to happen is if you want to contract with a company to do your recruitment, then you just adjust your payment terms,” Hall said.
But in the end, it all comes back to transparency for Stephanie Hall. “It doesn’t have to be this way and transparency on the part of the college and the OPM isn’t necessarily going to drive students away. But it’s just a moral question to make sure that students are aware of who’s involved.”
Editor’s note: A prior version of this story incorrectly stated that 2U is providing curriculum and instructors to online degree programs. However, 2U is only providing such services to universities’ online training programs and certificate programs.