The U.S. Government Accountability Office released a report Thursday highlighting the need for stronger monitoring of third-party online program managers (OPMs) to ensure their partnerships with U.S. universities do not violate federal law.
OPM stimulated Online programs at U.S. public and nonprofit universities have grown astronomically, offering services such as research, marketing, recruiting, student retention services, and instructional design that allow traditional brick-and-mortar institutions to rapidly scale.
Such partnerships – OPM may take more than half, or even as much as 80% of project revenue in exchange for these services – are legitimate Because of a letter from a dear colleague in 2011. The Department of Education guidelines state that as long as a university pays its third-party provider for a “bundled service” that does not include targeted compensation and recruitment incentives, the partnership will not violate the 1965 law. Higher Education Act.
However, the GAO report, originally requested by Sen. Patty Murray, Democrat of Washington, found it difficult for the federal government to monitor whether all of these partnerships are actually following the rules. In fact, the Ministry of Education doesn’t even know how many University-OPM contracts there are.
The report said this was due to a “lack of detail” in its guidance to independent auditors to identify these partnerships and to “assess whether the university’s arrangements with OPM may breach the incentive compensation ban”.
Current instructions for auditors who conduct annual compliance reviews of colleges participating in federal student aid programs, not to mention online program managers, or the 2011 Dear Colleague letter outlining their rules for working with colleges.
And “if guidance related to determining compliance is not specifically cited in the note, auditors generally do not consider it,” the report noted.
On the other hand, the report suggests that university officials lacked clarity about what they needed to share with auditors, leading the university to “withhold or modify relevant portions of the OPM contract during program review.”
The report made two key recommendations, which the Ministry of Education said it had accepted and was working to implement.
- The Minister of Education “should provide additional instructions” to “prompt auditors to specifically ask OPM, direct auditors to obtain and evaluate compensation information for OPM employees who provide recruitment services, and refer to relevant guidance including the 2011 Dear Colleague Letter.”
- The Secretary of Education “should also provide additional instructions” to universities to ensure they know they “have a responsibility to identify all OPM contracts, including recruitment, and then provide auditors and education’s program reviewers with copies of those contracts on how OPM staff can obtain Remuneration contracts and information.”
The current level of oversight has proven problematic for both advocates and government officials demanding greater transparency in a fast-moving space, often behind closed doors.
Between 2012 and 2020, online enrollment in U.S. higher education institutions increased 3.5-fold, according to education technology market research firm HolonIQ. As of July 2021, at least 550 universities are partnering with OPM to support at least 2,900 educational programs, the GAO report added.
Overall, I hope the OPM department and their school partners can breathe a sigh of relief.
Senators Elizabeth Warren, D-Massachusetts, and Sherrod Brown, D-Ohio, sent a letter to five OPMs in January 2020 (and a follow-up letter in January 2022) expressing concern about the popular tuition-sharing model ( That is, OPMs receive a percentage of their revenue – discouraging students from lowering tuition fees and encouraging predatory behaviour such as “aggressive and deceptive” recruiting practices.
Concerns about predatory practices have surfaced in several cases. Concordia University in Portland, Ore., now closed, sparked outrage in 2013 when reports that its OPM was attracting students with “fake ‘scholarships'”. Wall Street Journal It was also reported last year that half of USC grads who recently spent $115,000 for a master’s program in social work earned $52,000 or less two years after graduation, and had a median of $112,000 in federal funds. . Student Loans.
Thursday’s report did not mention any confirmed cases of incentive compensation breaches.
Immediate reactions to the GAO findings on Thursday were mixed. Trace Urdan, managing director of consulting and investment banking firm Tyton Partners, wrote in an email that the report includes some meaningful callouts; for example, compensation rules apply not only to larger degree programs, but also to boot camps, etc. Short courses.
Overall, though, he said it was “benign” and “there is no assertion that students or schools will be harmed by these arrangements.”
“I can imagine risk-averse schools becoming more risk-averse with increased scrutiny,” he wrote, “but overall, I hope the OPM department and its school partners can breathe a sigh of relief.”
Stephanie Hall, a senior fellow at the Century Foundation, said the GAO “fully met their requirements” for the report. Still, as someone who thinks colleges are “getting a bad deal” in today’s OPM market, she wants investigators to “expand their analysis to see what the 2011 guidance delivered, not just cuts. And- dry ‘contracts are not monitored.'”
The recommendations may not be a panacea, but they are a necessary step, said Kevin Carey, vice president of education policy and knowledge management for the New America and a critic of OPM.
“There are actual citations in the report,” “saying, ‘We don’t look at this stuff,'” Carey said. “And you can’t investigate something you didn’t even know existed.”