Bob Shireman of the Century Foundation and the author of the classic critique of assessment “SLO Madness,” and occasional Bad Assessment contributor, has just published a long essay on the legality of a basic feature of the OPM business model. Online Program Managers are companies that, depending on who you talk to, help colleges develop, deliver and market online programs or use the names and accreditation of established and, often public, universities as cover under which to run low-quality, high-cost online programs. The way this works most often is that the OPM gets its money by taking a percentage (usually 50% or more) of the tuition.
The most common function of an OPM, especially once the initial course development is done, is recruiting. Because the OPM’s income stream depends on the number of students in the program, it has a strong incentive to be as aggressive as possible about recruiting.
The Higher Education Act, the federal law that set the rules for most of higher education, has this to say about the practice of paying recruiters:
‘The Institution will not provide any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting …’”
On the face of it the current OPM compensation model is illegal.
That this practice continues is because of two sets of guidances that came first from the Bush and then the Obama Departments of Education. Shireman worked for the Obama administration and says that the reason they ended up allowing this compensation model was because they saw the OPMs as less bad than the for-profit colleges they were trying bring under control. It seems he is now questions the wisdom of the decision.
Since the Department of Education 2011 guidance on this it has become clear that the OPMs are not the “white-hat warriors” Shireman and his colleagues thought they were.
In fact, in one article and report after another (including an excellent one from the Century Foundation) has made clear that the OPMs are a menace that exploit both students and universities.
Shireman concludes with this:
But one reform does not need to await action in Congress: enforcing the statutory ban on incentive compensation to contractors. Enforcement could begin at any time, in various ways. The department, under this administration or another, could decide to rescind or revise the guidance, recognizing in hindsight that it opened up truck-size loopholes inconsistent with the statute. Or the question of the validity of the guidance could come before a judge, if a harmed student or faculty member, or a competitor school, were to file a suit against a school that is relying on the guidance. Under certain circumstances, a suit filed against the department could lead to a judge throwing out the guidance as contrary to the plain language of the statute.
Shireman has a long history of actually getting policies changed in the real world. If I were running an OPM I’d be a little nervous now that Bob and the Century Foundation seem to looking into the shadier corners of the OPM business model.