Boosters of online higher education have long held out the lofty promise that it would bring down the spiraling cost of college while also widening its reach.
Experts say this is likely keeping prices for students higher than they would be if the universities didn’t have to pay such a large share of revenue. In the years since, the industry has expanded and evolved, but the arrangements between colleges and OPMs in their most traditional form — still widely in use today — look something like this: OPMs market the programs, recruit students, counsel them through the admissions process, enroll them, provide the software and tech support needed for the programs to function and even help instructors design online-friendly courses.
The challenges of this rapid expansion strategy were laid bare this summer, when Chip Paucek, chief executive officer of 2U, told investors on a call that the company would slow down its rate of launches after 2019 to “support our path to profitability.” Graduate students are an attractive market For many reasons, graduate programs make up a particularly attractive market both for these companies and for universities looking to shore up their bottom lines, said Kevin Carey, vice president for education policy and knowledge management at the think tank New America.
And though the colleges are still technically responsible for setting the prices of the programs, a recently published review of some of these contracts by Hall and her colleagues at The Century Foundation found that, in at least some cases, the OPMs do play a role. Whether working with an OPM will drive up the price of a degree program for students is one of the many factors universities consider when assessing whether to enter into an agreement with one of these companies, said Deborah Seymour, owner and principal at Higher Education Innovation Consulting, LLC.
The company also announced a partnership in August with the University of London and the London School of Economics and Political Science to offer a Bachelor of Science degree in data science and business analytics for $25,000. That’s substantially less than overseas undergraduates pay to attend the London School of Economics in person.
Skewed incentives Kinser’s example is just one of many ways the companies’ incentives aren’t totally aligned with those of the colleges. That can be a big problem for schools, which are turning to graduate degrees as a way to bring in revenue amid declining undergraduate enrollment. The arrangements also threaten more than the bottom line. If a school works with an OPM, it may be under pressure to grow a program very quickly to recoup the revenue it’s turning over to the company, said Joshua Kim, director of digital learning initiatives at Dartmouth College.
Amid growing scrutiny of the online program management industry, 2U later announced that, beginning next year, it would disclose more information about its partnerships with universities, including contractual terms relating to academic oversight as well as the nature of its financial relationships. At George Mason University, which recently struck a 10-year deal with Wiley & Sons to offer master’s programs in business, health systems management and other areas, some faculty have expressed concern that this drive for growth could result in predatory recruiting behavior. GMU is one of a number of schools across the country that have faced challenges from faculty advocacy groups over these partnerships.
Ashley Frost, who earned a master’s in health administration through a George Washington University-2U program, learned of the company’s involvement only after she was admitted. As a member of the Commissioned Corps of the U.S. Public Health Service, Frost had access to the GI Bill to pay for her courses. She used up that money and then some, acquiring her master’s degree and winding up with about $15,000 in debt.
Why colleges choose to partner Proponents of these partnerships argue that the companies’ motivations track with the students’ and schools’ best interests. If students and universities aren’t satisfied, the degree programs won’t continue to operate, the business will stop growing and the company will ultimately make less money, Paucek said in a May interview with The Chronicle of Higher Education.
Trying to explain to people how Universities pay their departments, is like explaining the federal reserve and why every dollar printed into existence comes with inherent interest. It really doesn't make sense.
h0llyhart