ASU-UT, Minnesota v. OPMs - Is This The Future of Online Education? (Where Does That Leave The Rest of Us)

For over a decade, online program management (OPM) companies dominated online degree programs through lucrative revenue-sharing deals with colleges. But two recent developments signal major disruption ahead that could redefine the online education landscape, especially for smaller institutions. 

To quickly recap, in May 2024, Minnesota became the first state to ban public colleges from tuition revenue-sharing with OPMs involving recruitment and marketing services. The law also prevents OPMs from controlling curriculum, requires state approval of OPM contracts, mandates performance monitoring, and compels transparency in OPM involvement.

A few weeks prior, news broke about a groundbreaking partnership between Arizona State University and the University of Tennessee at Knoxville. Under the unique $11.5 million arrangement, ASU will provide UT-Knoxville with operational support, innovative learning technologies, and access to its vast online course catalog. Of note, UT-Knoxville will pay $3.5 million over 5-years for operational advisory services - essentially teaching UT how to offer online education at scale.

These two shifts raise crucial questions for the vast majority of U.S. colleges. With only around 130 of 4,000 degree-granting institutions holding the coveted R1 ("highest research activity") designation like ASU and UT, how can smaller schools insource affordable online capabilities as the OPM model shifts?

Many cash-strapped institutions originally turned to OPMs because they lacked the capital to pay those hefty upfront costs. At most schools, fee-for-service deals exceed $1 million in investments within the first three years. Not to mention this same sector is undergoing budget cuts, staff layoffs, and other belt-tightening maneuvers. 

For private colleges and universities, the deals should serve as a wake-up call to critically examine their own online education strategies and OPM relationships. Did they hope for a return to pre-pandemic normalcy which never materialized? If under contract, are they merely outsourcing services that could be built internally over time?

For smaller and mid-sized colleges and universities the answer may lie in an entrepreneurial, mission-focused approach. Start modestly by evaluating local workforce demands. Identify one or two viable online programs aligning with your resources and mission. Determine what financial and human resources you can earmark. Develop a 12-month plan emphasizing marketing, admissions, advising, and online course design best-practices. Then as Seth Godin and Steven Pressfield like to say “Do the Work.” Inevitably there will be bumps along the way, but keep doing the work. Reassess along the way, improve, invest in successes, discard what does not work.

Regardless of the path forward, the online education landscape is shifting rapidly. For smaller and mid-sized colleges and universities, now is the time, do not hesitate. It can be done. 

To learn more check out my series: Breaking Up Isn't Hard to Do: 7 Key-Elements to Guide Your Post-OPM Strategy

So where are you on your online journey? I would love to hear from similar institutions.

Let’s connect, I promise I’ll pick up the phone (or zoom call). jeremiah@fractionalcolo.com