A decade ago, the question most university leaders asked about online education was whether they could afford to build online programs on their own. For hundreds of institutions, the answer was to partner with an online program management company, commonly called an OPM, that would put up the capital in exchange for a share of the tuition. Today the question has changed. The better question is not whether to outsource, but which parts of an online operation an institution must own itself, and which it can responsibly pay someone else to do.
For readers less familiar with the term, online program management providers are companies that help colleges and universities take academic programs online. They offer services as a package or on a fee-for-service basis, including market research, student recruitment and enrollment, course design, technology platforms, and student retention. How those services are paid for turns out to matter a great deal.
Two Business Models
The traditional OPM arrangement is the revenue-share model. The provider covers the upfront cost of developing and launching an online program and, in return, receives a percentage of the revenue the program generates. The appeal to cash-strapped institutions is obvious. A college can launch a new online master’s degree without spending its own capital, and the OPM takes on much of the financial risk.
The alternative is fee-for-service. The institution pays the provider for specific services, such as marketing, course development, or technology support, without sharing program revenue. It costs more up front, but the institution keeps control of its programs and all of the tuition if the programs succeed.
Revenue sharing has drawn criticism for years because of a federal rule most people outside higher education have never heard of. Colleges that receive federal financial aid are generally prohibited from paying incentive compensation to companies or employees that recruit students. In 2011, however, the Department of Education issued guidance allowing colleges to pay OPMs a share of tuition for recruiting as long as recruitment was part of a larger package of services, an arrangement known as the “bundled services exception.” Critics argue that the model encourages aggressive recruiting to maximize enrollment and profits.
The Fall of a Market Leader
No company illustrates the rise and fall of the OPM boom better than 2U. Its revenue grew by more than a third in 2020 to $774.5 million, and its market capitalization reached $4 billion by February 2021. That year it also paid $800 million to acquire edX, the MOOC platform started by MIT and Harvard. In hindsight, 2021 was the high-water mark. The company filed for Chapter 11 bankruptcy in July 2024.
The reasons were familiar to anyone who watched the sector closely. 2U’s revenue declined in part because some university partners, including the University of Southern California, scaled back their relationships. The company faced growing competition as more providers entered the market and more universities chose to launch online programs on their own. Before the filing, 2U reported total debt of $904.7 million and an accumulated deficit of nearly $1.5 billion.
2U was not the only sign of change. Pearson left the OPM business, and Academic Partnerships acquired Wiley University Services for $150 million in November 2023. In May 2024, Minnesota became the first state to prohibit its public colleges from signing tuition-share contracts with OPMs. Meanwhile, the Department of Education announced in 2023 that it would revisit the bundled services guidance. The regulations were then pushed off, leaving the model under a cloud of uncertainty rather than a clear prohibition.
Does all of this mean the OPM model is finished? No. It means the model is being unbundled.
Online Learning Is Not Shrinking
The irony of the OPM shakeout is that online learning itself continues to grow. According to a June 2026 UPCEA report, more than 5.3 million students at 3,482 degree-granting institutions were enrolled exclusively in distance education in Fall 2024. That is a 103% increase since 2012, when 2.6 million students studied exclusively online. Enrollment in distance education courses now accounts for 54% of U.S. postsecondary enrollment.
In other words, the demand that OPMs were built to serve is larger than ever. What has changed is who controls the relationship with the student. Institutions that learned during the pandemic how to teach online at scale are far less willing to hand over a large share of tuition for services they now believe they can perform themselves.
What Comes Next
The most likely forecast is not the disappearance of OPMs but a shift toward a more modular market. I expect three trends to continue.
First, more institutions will move from revenue sharing to fee-for-service arrangements, buying specific capabilities rather than a full package. Marketing, enrollment management, and instructional design will increasingly be purchased the way colleges already procure specialized consultants like EAB or Huron.
Second, institutions will bring the functions closest to the student back in-house. Academic quality, faculty oversight, advising, and student support are central to an institution’s identity and to its accreditation. It is difficult to argue that a college is responsible for student outcomes if an outside company controls most of the student experience. When I led APUS, we believed that the institution had to own the student relationship from inquiry to graduation, and I believe that more strongly today.
Third, regulatory pressure will continue to push in the same direction regardless of which administration is in office. States can act on their own, as Minnesota did, and accreditors are increasingly asking how much of a program is delivered by third parties.
For university leaders considering an OPM partnership, the advice is straightforward. Before signing a contract, ask how long the agreement lasts, who develops the curriculum, who teachers the courses (and who hires them if it’s the OPM teaching), what happens to marketing data and student records when it ends, who sets tuition, and what share of the revenue is effectively paying for recruitment. An institution that cannot answer those questions clearly is not ready to sign.
Final Thoughts
In short, the OPM era taught higher education an important lesson. Online learning was never a side business to be outsourced. For millions of students, especially working adults, it is the primary way they experience college. The institutions that thrive in the next decade will treat online education as core to their mission, invest in the capabilities that define quality, and buy outside help only where it adds value without giving away the relationship with the student.
The harder question is what happens to the many smaller colleges that still lack the capital to build those capabilities on their own. Consortia, shared services, and partnerships among institutions may offer an answer. And that question could be the basis for a future article.
