What universities should do now in the uncertain OPM landscape

Recent releases from the Department of Education have put Online Program Managers (OPMs) front and center of the news cycle. Headlines about student debt and poor student outcomes have prompted federal attention. In 2022, members of Congress called for investigation into OPMs, and the attention hasn’t waned since. In February, the Department of Education (ED) turned up the heat even further with a surprising Dear Colleague letter on third-party servicers (TPS).

While the implications of this letter and additional announcements released since are still unclear, universities have questions about what they should do to prepare for potential changes to the OPM oversight landscape. Read on for what you need to know now and what actions to consider.

February Department of Education (ED) Dear Colleague Letter massively increases ED oversight (for now)

In the last year, the federal government has taken several key actions that sowed confusion among Professional, Continuing, and Online (PCO) leaders, made worse by the February 2023 ED Dear Colleague Letter. In it, as expected, the ED announced that they will conduct a formal review of the policy that allows OPMs to offer marketing and recruitment bundled with other services. The Department reevaluated this exception due to “the growth in online enrollment and associated federal student debt” since its inception in 2011.

What was not expected, however, was their expansion of the third-party servicer definition. Specifically:

“Entities performing the functions of student recruiting and retention, the provision of software products and services involving Title IV administration activities, and the provision of educational content and instruction are defined as third-party servicers.”

Without ED revision, this definition would pull essentially all software and service providers that support Title IV aid-eligible programs (including LMSs, CRMs, and student retention services) into the realm of third-party servicers—with the abundance of regulation, paperwork, and federal oversight involved.

This sudden change received swift pushback from key stakeholders. Most notably, the American Council on Education (ACE) penned a letter cosigned by heavy hitters in higher education: AAC&U, AACRAO, AASCU, APLU, UPCEA, and many regional accreditors. Phil Hill, author of the On EdTech Newsletter, analyzed public comments for both the OPM and TPS guidance which demonstrated that the majority of commenters wanted to keep the bundled service exception for OPMs and were against the new expansive definition of TPS.

Overall, Hill believes that “the new TPS guidance will be either significantly modified or even rescinded after the public comment period is over.” As predicted, in a recent blog post the ED said they specifically plan to “consider clarifying or narrowing the scope” of the clauses on “software and computer services, student retention, and instructional content.”

Are the benefits of OPM partnerships worth the risk? In this podcast episode, EAB’s Carla Hickman and David Kuehl trace the evolution of online program managers and offer advice to today’s university leaders on how to partner with OPMs to boost online enrollment.

ED emphasis on audits and contract reviews means more faculty and staff time dedicated to internal program review, no matter what

Before the department issued its updated guidance, our partners were beginning to report pockets of increased federal scrutiny of external contracts, and we are aware of at least one case of a full audit. EAB expects the recent changes will increase the likelihood of future audits for all institutions.

To prepare, leaders should assess the information they are currently documenting and reporting to ensure it is accurate and compliant. Waiting for the ED to initiate an audit or provide clear direction may make your response reactive rather than proactive—and leave you with the anxiety and frustration that may produce.

While compliance verification may suffice for most programs, some institutions will need more preparation. For institutions with many outsourced programs or those with little audit infrastructure, create a plan for how to absorb additional compliance needs should you be audited. This likely means creating capacity in an existing FTE’s responsibilities by deprioritizing other assignments. A good model might be to consider how you reprioritize staff time for focused attention on compliance and documentation during your regular accreditation cycles.

Skeptical students and critical media force reconsideration of online programs’ value proposition

Today’s students are looking for a maximal return on their investment. Negative stories about OPMs in mainstream news sources, like The Wall Street Journal and The LA Times, highlight the tension between program costs and graduate starting salaries and raise questions about the legitimacy of online programs provided by vendors, instead of by the university itself. These narratives only bolster the skepticism a majority of young adults without degrees already report feeling toward higher education.

PCO leaders should revisit program price points, course content, and recruitment practices to avoid negative media attention and address prospective student skepticism. Specifically:

• Analyze your programs’ price points to ensure they are justified by student outcomes. Measuring student outcomes can be difficult; compare the average graduate salary to program cost for the most straightforward calculation. Program leadership may not be able to change price based on their findings, but can then consider how to improve student outcomes and how prospective students will perceive those outcomes relative to a high program cost.
• Conduct course audits to ensure your course content is up to date with today’s technology and in-demand skills. Analysis of relevant employer demand can reveal what skills are fundamental as well as emerging for relevant roles. Reviews should also closely examine the learning experience and level of academic rigor to ensure alignment between university-produced programs and OPM-produced programs.
• Detail your professional conduct and recruitment practice expectations in the OPM contract. This ensures that your vision for student recruitment matches your partner’s actual recruitment practices.

If you have questions and are a partner, contact your EAB Strategic Leader to set up a conversation with one of our OPM experts.