Distance Learning

Count of Schools Going Outside To Launch Online Degree Programs Rising

• By Dian Schaffhauser
• 04/24/15

Universities are increasingly turning to outside companies to help them launch new online degree programs. In fact, higher ed research and advisory firm Eduventures has identified at least 26 companies — known as "online program management (OPM) providers" — currently operating in this space. The data comes out of a series of reports Eduventures recently published for its member institutions.

About 12 percent of Title IV-eligible, degree-granting institutions in the United States currently work with OPM providers, and the number is growing, according to Senior Analyst Max Woolfe. "Our research shows that the OPM market has grown at an average rate of 32 percent annually and will exceed $1.1 billion in 2015."

Woolfe offered several reasons why institutions might want to try out this variety of outsourcing: "While some education leaders view outsourcing to vendors as relinquishing control, losing academic freedom or forgoing the ability to build sustainable in-house operations, we feel that a thoughtful OPM partnership not only drives an institution's strategic goals and mission through online programs, but also implements a variety of initiatives that would be very difficult for an institution to execute on its own."

The roster of OPM providers includes 2U, Blackboard, Educators Serving Educators and Pearson Embanet, among many others. These operations frequently offer "an end-to-end bundle of services to fund, develop, launch and support online education programs." The companies sign long-term contracts with their customers that grant them hefty percentages of the tuition earned, often up to 60 percent of the revenue.

Eduventures advises schools that are considering signing on with an OPM to go for the "bundle deal" rather than cherry-picking individual services delivered by that vendor. As outlined in the advisory firm's report, "Partnering with OPMs," the reasons are many, including: to avoid "points of failure," to retain focus on building the new degree program without institutional distraction and to achieve the kind of program scaling that will ensure success.

A separate report offers an explanation of how to partner with an OPM provider; and an additional paper profiles OPM providers and highlights their areas of specialization.