Jun 6, 2022
In May, a federal watchdog agency, the U.S. Government Accountability Office (GAO), released a report calling on the Department of Education (ED) to bolster its oversight of online program managers (OPMs) that contract with colleges. To many, including OPMs and their critics, the report was overdue and hardly shocking. Yet it remains unclear what regulatory shifts could come next for the booming OPM industry.
“Essentially, the report said, ‘Department of Education, do your job and provide oversight,’” said Phil Hill, partner and co-founder of MindWires, an education technology consultancy firm. “I’m not sure anyone is saying that they disagree with that. So, you can look at this report and think, there’s not much to it. But I think there are a lot of regulatory changes that people want to push and have been waiting on the GAO report to do. It’s significant, even though the findings didn’t have anything damning.”
OPMs are third-party, for-profit companies that colleges can hire to help run online education programs. These companies provide a range of services, often including recruiting students, according to the GAO report.
To pay OPMs, many colleges opt to share their tuition revenue. OPMs typically get 40% to 60% of every tuition dollar, and some can get up to 80%. These contracts also tend to be lengthy, spanning several years. But when recruiting services are involved, colleges and OPMs fall into a tricky legal territory that requires careful federal oversight—which the GAO found lacking.