February 16, 2023
Education Department to Review Guidance Allowing Revenue-Share Agreements with OPMs
Dive Brief:
The OPM industry has exploded over the past decade. One of the most prominent companies in the sector, 2U, went from earning $29.7 million in revenue in 2011 — the year the guidance was created — to nearly $1 billion today.
However, it’s unknown how large the market really is. A report last year from the U.S. Government Accountability Office estimated that at least 550 colleges have contracts with OPM providers, but said this was likely an undercount.
- The U.S. Department of Education announced Wednesday that it is planning to review 2011 guidance that allows online program management companies, or OPMs, to strike revenue-share agreements with colleges.
- Hundreds of colleges contract with OPMs to help them launch and run online programs. These companies often provide the upfront capital needed to start programs and then take a portion of their revenue in return, typically between 40% and 60% of tuition.
- However, lawmakers have been questioning whether these arrangements comply with federal law. The Education Department plans to hold listening sessions in early March to seek the input of stakeholders, including colleges, faculty, OPMs and students.
The OPM industry has exploded over the past decade. One of the most prominent companies in the sector, 2U, went from earning $29.7 million in revenue in 2011 — the year the guidance was created — to nearly $1 billion today.
However, it’s unknown how large the market really is. A report last year from the U.S. Government Accountability Office estimated that at least 550 colleges have contracts with OPM providers, but said this was likely an undercount.