Online Program Managers: Why Transparency is Critical

Online Program Management (OPM) companies have faced criticism in recent years for operating without full transparency about their recruitment practices, revenue sharing agreements, and student support activities, all under the aegis of the institution’s brand. In fact, a number of major ed tech companies have either left the OPM business (e.g., Pearson, Wiley) or significantly restructured to weather difficult industry headwinds (2U). 

Yet schools continue to rely heavily on OPMs to perform the basic enrollment, operational, and academic functions that they cannot support on their own. While some schools have surrendered too much control to OPMs, those who work transparently and in strong partnership with their OPMs can establish a path to growing enrollment and fiscal stability.

How Have OPMs Lacked Transparency?

The transparency of OPMs has been questioned by a variety of stakeholders—students, faculty, government agencies, and the taxpaying public. Typically, their questions have revolved around issues such as the following:

• Are the recruitment practices the OPM uses fair and ethical, or are they high pressure or aggressive?
• Are OPMs recruiting and admitting students who are not a good fit or unlikely to succeed at the school?
• Is the information OPMs deliver about programs (student job placement rates, program management, faculty oversight) true and complete?
• When a prospective student calls, will they know if they are speaking to a school employee or an OPM representative?
• How are decisions about academic content and quality made for OPM-delivered programs?
• Are the terms of the contract fair and reasonable, or does it create a potentially predatory relationship between the OPM and the school?

In general, these concerns about transparency fall into three categories: recruitment transparency, academic ownership and quality, and overall institutional well-being.

Recruitment Transparency

A lack of transparency from some large-scale OPMs has been the focus of a number of recruitment-related lawsuits in recent years. For instance, 2022 lawsuit against the University of Southern California and 2U alleged that deceptive rankings were used during the 2U-managed recruitment process to swell enrollment numbers in online programs. In short: students have not always believed that they were sold a true and honest bill of goods.

OPMs have a built-in incentive to enroll larger numbers of students. Section 487(a)(20) of the Higher Education Act, dating back to 1965, bans incentive compensation for securing enrollment and securing financial aid. While his rule was meant to limit the “pay per student” model that some OPMs had previously adopted as part of their fee structure, a 2011 loophole that allows OPMs to share tuition revenues with the institution if they bundle marketing/recruitment services with another service, such as instruction or curriculum design, essentially allows the same practice to occur.

Academic Ownership and Quality

When OPMs partner with institutions to develop, deliver, and oversee curriculum, questions of academic ownership, quality, and faculty involvement inevitably arise. It is not the case that instructional design and instruction need to be delivered only by the institution where the student enrolls. Neither is it true that curriculum and instruction will be better, simply by virtue of having been home-grown. However, unless they have been informed otherwise, when students sign up for a course with a school, they can expect interaction with the school’s own faculty and content.

With OPM-managed programs, this has not always been true, and students have not always known that their expectations were inaccurate. A second 2024 lawsuit also involving USC and 2U claimed that students in USC’s online Master of Social Work program were recruited with the promise that they would receive an education equivalent to what residential students at USC receive, only to be enrolled in a much-diminished program managed by 2U. And in the same span of two years, the California Institute of Technology and Simplilearn lost a class-action suit stemming from their erroneous representation of a cybersecurity bootcamp as being run by Caltech, when in fact, the bootcamp was entirely the product of their OPM partner.

Institutional Well-Being

The modus operandi of some OPMs has given rise to a great deal of anxiety industry-wide about how schools interface with OPMs. While increased federal oversight may mitigate some of these concerns, a more scalable approach involves each school working closely with its OPM to forge an agreement that works for both parties. The effects of not doing so could be catastrophic, up to and including the loss of Title IV funds.

A secretive or mismanaged recruitment and enrollment process, for instance, might admit students who do not meet institutional standards or misadvise students about the content of the program they are entering. Without clear protocols, OPM agents might not disclose that they are representing the school from a partner business—all clear violations of federal regulations.

A poorly negotiated contract could create ongoing financial hardship for the school. For instance, although the revenue share model may function well if managed properly, if it is skewed irrationally in favor of the OPM, it may create a need to raise tuition in order to recoup dollars. Historically OPMs have taken roughly half of the revenue as their share, though some agreements have allocated as much as 94% to them. Ultimately, students pay the price for this sort of administrative failure.

Similarly, if a pattern of admitting unqualified students emerges as a result of overly aggressive or institutionally inappropriate recruitment tactics, the school’s retention numbers and revenue streams may be adversely affected.

Institutions thrive when they are well managed and when they take full ownership of the work their industry partners do for them.

How Much Transparency is Required?

In recent years, a number of regulatory moves to increase OPM transparency have been enacted, though the progress to this point has been slow. These have been in addition to standing rules from accreditors that have long been in effect.

Government and Legislative Actions

A 2023 determination to review the 2011 bundling-of-services loophole did not produce much fruit. Initially, it seemed as though all OPM-school contracts would be subject to ED review, but that guidance was quickly rescinded. In January 2025, however, a Dear Colleague letter warned specifically against OPM agents failing to identify themselves as being employed by an external service provider, assigning misleading titles, such as “adviser” to OPM employees who are actually sales or recruitment agents, and describing OPM-run programs as analogous to residential ones.

• Some states have also enacted their own legislation designed to increase transparency. Minnesota has banned the revenue-share model requires that faculty retain academic ownership of the curriculum.
• Ohio requires that institutions publicize their relationships with OPMs and that OPMs’ agents do the same, and OPM contracts must be disclosed to the state Chancellor.
• New Jersey and California’s most recent OPM-related bills died in committee but continue to pursue oversight as a legislative goal.

Accreditation Rules

While no regional accreditor has standards that address the intricacies of OPMs, most have multiple standards that require the institution to oversee, supervise, and take ownership from any activities carried out by outside contractors and cooperative partners. The same quality control standards that apply to a math class delivered via MyMathLab also apply to curriculum delivered in partnership with an OPM. The same standards that require internal admissions team members to represent the school’s academic programs accurately also apply to OPM recruiters.

For instance,

• HLC 2.B dictates that “the institution present[s] itself accurately and completely to students and the public with respect to its educational programs and any claims it makes related to the educational experience.”
• SACS-COC 6.2.b requires the institution to employ “a sufficient number of full-time faculty members to ensure curriculum and program quality, integrity, and review.”
• Middle States 3.2.e states that “Student learning experiences that are designed, delivered, and assessed by faculty (full-time or part-time) and/or other appropriate…professionals who are: rigorous and effective in teaching, assessment of student learning, scholarly inquiry, and service, as appropriate to the institution’s mission, goals, and policies.”
• NWCCU 1.C.5 requires that “The institution engages in an effective system of assessment to evaluate the quality of learning in its programs. The institution recognizes the central role of faculty to establish curricula, assess student learning, and improve instructional programs.”

While no accreditor requires that school employees perform all recruitment and enrollment functions or that faculty and only faculty develop or deliver curriculum, neither is an institution free simply to hand over its operational and academic reins to an OPM. Institutions must maintain control of their key functions, even when they partner with an OPM to perform them.

How Can OPMs Operate Transparently?

The Century Foundation recommends a number of key steps that schools can take to assure a productive relationship with their OPMs:

• Preferring fee-for-service to revenue-share agreements
• Avoiding lengthy or indefinite contract terms
• Requiring student-centered, transparent recruitment practices, and
• Maintaining control of key decisions.

These steps may be too draconian for some applications, but the principles behind them are sound. Schools should avoid fee or contract structures that create a bottomless financial commitment to the OPM, and they should maintain oversight of key functions.

OPMs, in turn, can structure their services in such a way that the school and the OPM enjoy a mutually profitable experience. At Magellan Learning Solutions, we have adopted these principles as part of our mission and values, which emphasize having a supportive, tailored, relational, and student-centered approach to solving clients’ problems.

Transparency in Marketing and Enrollment

When Magellan supports a client institution’s enrollment funnel, sharing the data that enables wise decision-making is part of the process. This includes:

• Making available the metrics behind lead generation (e.g., cost per lead, conversion rates) and subsequent funnel stages,
• Developing marketing personas and admission criteria in tandem with the client
• Recording all contact center and admissions/recruitment conversations and making them available,
• Reporting on the admissions profile of all admitted and enrolled students to assure congruence with institutional standards,
• Agreeing on scripts that agents will use when contacting prospective students, including a protocol for self-identification, and
• Partnering to create marketing assets and landing pages.

Transparency in Academics and Student Success

OPMs can play a powerful role in helping schools stand up and deliver programs that might otherwise take them years to deploy. In order to assure that these programs truly represent the school offering them, OPMs can build the following processes into the partnership:

• Align program learning outcomes with institutional goals
• Vet potential faculty in tandem with the school
• Train instructors on institutional distinctives
• Engage with school faculty to approve curricular content
• Make available student success metrics from all OPM-managed curriculum
• Align course learning outcomes with school assessment activities
• Make student success metrics available to the client
• Include the client in all outreach activities, communication flows, and interventions
• Agree on the approach that OPM agents will use when contacting students, including a protocol for self-identification.

Magellan adopts these practices as part of its tailored approach to curriculum—and even more customization is possible if the client so desires.

Questions To Ask about OPM Transparency

When a school and an OPM partner in a transparent way, everyone benefits. To ensure that such a partnership is structured properly both sides should ask some pointed questions that go beyond the financial particulars of the contract.

Questions the School Should Ask

• How will the OPM include the school in its marketing and recruitment activities?
• How will the OPM’s activities (call center, ads, etc.) be visible to the school?
• What will the OPM disclose about the marketing and recruitment spend?
• How will the OPM participate in the admission and enrollment processes?
• How will the OPM work with faculty to develop and deliver course content?
• How will OPM-supported programs participate in school-wide assessment and evaluation processes?
• How will the OPM support training and professional development at the school?
• What does an amicable parting of ways look like?

Questions the OPM Should Ask

• Who from the school will assist the OPM in maintaining the school’s brand in marketing and recruitment activities, and what will this process look like?
• Who from the school will act as an approver/collaborator for the OPM’s recruitment and student support scripts and communication flows?
• Who from the school will vet faculty and curriculum?

While each of these questions will likely create a plethora of other questions, they can serve as a roadmap. The school needs to be aware of how the OPM is engaging, enrolling, instructing, and supporting students, and the OPM needs to be assured that the school will remain an active partner in the process.

Magellan Learning Solutions as a Transparent OPM

If you want to explore what a relationship with a transparent, partnership-oriented OPM can look like, contact us or fill out the form below. We’d love to build a solution that works for you!