Your OPM Isn’t a Tech Platform. It’s a Predatory Marketing Firm.

THE CENTURY FOUNDATION

Stephanie Hall

January 20, 2023

A decade ago, three companies were launched that some said would revolutionize higher education by making excellent college courses available to anyone, online, through so-called MOOCs, or Massive Open Online Courses. Two for-profit ventures emerged from Stanford: Coursera and Udacity. Meanwhile, Harvard and MIT launched a similar enterprise as a nonprofit joint venture, edX. The hype stoked by the start-ups prompted commentators and policymakers to predict collapsed enrollment at most colleges and universities, as cheap access to lectures from the best professors in the world would make relics of the old in-person model.

The companies, especially Coursera and edX, built good reputations and grew over the next several years, but MOOCs did not turn traditional higher education institutions into dinosaurs. Then came the pandemic, and the MOOC providers saw a second chance for a big payday. Coursera took advantage of the pandemic-induced online education revival by becoming a public company through an IPO in March 2021, raising $520 million. Three months later, Harvard and MIT announced that they would sell their nonprofit edX to a for-profit company, 2U, for $800 million in cash.

Being publicly traded companies, with the drumbeat of earnings and stock-value, has transformed the former MOOC operators into different, more predatory beasts. Coursera and edX still provide access to free content on their platforms, but they are now first and foremost lead-generation operations and exist to drum up sales (that is, enrollment) into online degree and certificate programs, where federally insured student loans make it too easy to charge too much tuition for too little education.

Stock analysts had great expectations for Coursera’s profitability, but the company has more recently disappointed its investors. What does the company need to do to make the market happy? Increase revenue and lower costs. It can do that with an even more aggressive sales operation. Which brings us to the issue of federal regulations.

Coursera and edX have joined the ranks of other online program management companies (OPMs) that contract with public colleges and universities to design, market, and recruit for their online degree and certificate programs. Colleges are attracted to the arrangements because they are able to avoid the upfront investment that would otherwise be required when setting up new online programs. In exchange, institutions “share” their tuition revenue with the OPM for a number of years.

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