Beyond the Traditional OPM Model: Rethinking Online Growth for Institutional Resilience

Beginning around 2010, provosts and higher education leaders were inundated with presentations and sales calls from Online Program Managers (OPMs) such as 2U, Learning House, Pearson, and others. For most of the following decade, OPMs represented an expedient pathway for institutions seeking to expand enrollment rapidly. Colleges that lacked the internal capacity to develop online programs independently could partner with an OPM and enter the market within months. The value proposition was compelling: no upfront infrastructure costs, accelerated time-to-launch, and an established framework for reaching adult learners. The U.S. Government Accountability Office (GAO) reports that by 2021, 550 colleges were engaged with OPMs to support online programs (gao.gov).

OPM companies function as third-party developers and provide a broad spectrum of services. From course development to comprehensive program management, the role of third-party OPMs is often not visible to students and external stakeholders. Depending on the terms of the institutional contract, one college may be delivering a program that is substantially identical to one offered at another institution. For many colleges, these arrangements proved effective and mutually beneficial.

Beginning around 2022, the landscape started to shift significantly. As online programs have matured and institutions have developed greater internal capacity, many academic leaders began to examine more critically whether these partnerships remain strategically sound. Research from UPCEA and the U.S. Government Accountability Office documents growing concern about long-term revenue-sharing arrangements, particularly as institutions recognize the magnitude of tuition revenue that has been redirected to third parties and the degree to which operational control has been relinquished. State governments are also working to establish stronger guardrails governing OPM agreements. Minnesota, for example, enacted legislation (HF 4024) placing restrictions on public universities entering new OPM agreements (tcf.org).

For most provosts and presidents, the question has evolved beyond "should we pursue online education?" to something considerably more complex: how do we expand online in a manner that genuinely serves the institution over the long term, without ceding mission, margin, or operational control in the process?

Why This Matters for Academic Leaders

A decade ago, decisions regarding online programming were largely the purview of the continuing education office. Today, those decisions are made at the provost's or president's level, because the stakes now touch virtually every dimension of institutional health and strategic capacity.

An institution's online strategy shapes far more than enrollment growth. It influences how academic programs are prioritized and structured, how financial resilience is maintained, and how faculty remain engaged in institutional decision-making through shared governance. Online strategy also affects institutional identity, including how the college presents its mission and supports students across different learning modalities.

At the same time, online education decisions influence an institution's long-term adaptability. They shape efforts to diversify enrollment, respond to changing workforce demands, and maintain strategic flexibility in an increasingly competitive higher education environment. The challenge is not simply to expand online enrollment, but to do so in ways that are financially sustainable, academically credible, and consistent with institutional mission and identity as the higher education landscape continues to evolve.

The Historical Value of OPMs

It is worth recalling why OPMs gained such rapid traction. In the early 2010s, most institutions were not positioned to compete effectively in the online market. They lacked instructional designers, digital marketing teams, and enrollment operations designed for online recruitment. Building those capabilities from the ground up was time-consuming, costly, and carried substantial risk. Most institutions also lacked the financial reserves required to absorb the upfront investment associated with launching programs that might not achieve positive revenue for a year or more.

OPMs assumed responsibility for instructional design, course development, marketing, recruitment, enrollment management, technology integration, and student support. Institutions could select from turnkey program models that included the full range of capabilities required to develop and sustain an online program. A variety of service configurations were available to accommodate differing institutional needs and priorities. Decision-makers were frequently engaged by multiple OPMs offering comparable services.

In exchange, the Government Accounting Office (GAO) reports that institutions entered into long-term revenue-sharing agreements that typically allocated 40 to 65 percent of tuition revenue to the OPM to offset their upfront investment. The arrangement functioned as a calculated risk: the OPM absorbed the initial costs, the institution avoided the financial exposure, and both parties shared in whatever enrollment and revenue materialized.

Hundreds of institutions launched thousands of programs through OPM partnerships during the 2010s, encompassing both public and private colleges. Institutions that might otherwise have required years to develop online capacity were reaching students on a national scale in a fraction of that time.

In those early years, speed was the decisive competitive advantage, and OPMs delivered it effectively.

There is also a cultural contribution worth acknowledging: OPMs helped legitimize online learning at many institutions where faculty and administrators remained skeptical. They rendered the abstract concrete, and that shift carried meaningful institutional significance. Ubell (2024) writes that the partnerships supported the enrollment of tens of thousands of working and other nontraditional students who may never have gained access to higher education.

Why Institutions Are Reassessing Traditional OPM Models

What, then, has changed? Quite a great deal, as it turns out.

The financial dimension is perhaps the most readily apparent pressure point. When an OPM retains 40 to 65 percent of tuition revenue, the arrangement was defensible when the institution had no programs and no capacity. It becomes considerably more difficult to justify once programs are well established, staff have developed genuine online expertise, and the institution is still remitting a substantial portion of revenue to a third party each term. Institutions that once welcomed the OPM model as an essential lifeline are now scrutinizing the ongoing value of that investment. According to market research from Validated Insights, new OPM partnerships declined by more than 53 percent from 2023 to 2024, and in 2023 alone, 147 OPM contracts were terminated, nearly as many as in the preceding three years combined.

The contractual structure presents a further set of challenges.

Many OPM agreements extend for seven, ten, or even fifteen years. An institution that executed a contract in 2013 based on the enrollment projections, competitive conditions, and strategic priorities of that moment may now find itself bound by terms that bear little relevance to the realities of 2025. Research by UPCEA on OPM contract terms has identified provisions that warrant particular scrutiny from institutional leaders, including those governing data rights, termination clauses, and renewal conditions. The landscape has fundamentally changed; many contracts have not.

In the interim, institutions have developed significantly greater internal capacity. Staff who were skeptical a decade ago now possess substantive online expertise. Functions that once required full outsourcing can increasingly be managed internally or through more targeted partnerships that do not require surrendering a substantial share of tuition revenue.

The questions institutional leaders are now asking differ substantially from those of a decade ago:

• Which functions truly require external support?
• Which capabilities should remain institutionally controlled?
• How can institutions preserve greater operational flexibility?
• What online growth model best supports long-term resilience?

As RPK Group has observed in its research on financial sustainability in higher education, durable institutional health derives from aligning the academic portfolio with models that are genuinely sustainable, not from pursuing enrollment growth at any cost.

Additional Market Pressures and Institutional Differentiation

The economics of online expansion have also shifted considerably from the environment that existed during the rapid growth period of the early 2010s. At that time, institutions benefited from substantial pent-up demand among adult learners seeking flexible degree pathways. Over time, however, the market became significantly more competitive. Student acquisition costs increased, demographic pressures reduced the number of prospective students in many regions, and institutions faced growing difficulty differentiating programs in crowded national markets.

Because traditional revenue-sharing OPM models absorbed much of the upfront financial risk, they also contributed to a rapid proliferation of online programs across higher education. Institutions that previously might not have entered the market were suddenly able to launch programs with relatively limited initial investment. While this accelerated access and innovation, it also intensified competition and reduced differentiation across many academic disciplines.

Urdan (2024) suggests the result is a far more mature and competitive online marketplace than existed a decade ago. Institutions are now competing not simply on modality, but on institutional reputation, workforce alignment, student support quality, instructional flexibility, and overall value proposition. In many fields, simply offering an online program no longer constitutes a meaningful competitive advantage.

OPM partnerships also produced uneven outcomes across institutions. Colleges with strong brands, distinctive academic offerings, or nationally recognized graduate programs often achieved substantial enrollment growth through online expansion. Institutions attempting to use online programs primarily as a financial rescue strategy, however, frequently encountered more volatile results. In some cases, colleges became heavily dependent on a narrow portfolio of online programs and exposed themselves to significant financial vulnerability when enrollment patterns shifted or market competition intensified.

This distinction is particularly important for mission-driven institutions. Online delivery can expand institutional reach, but it cannot substitute for institutional differentiation, academic quality, or a clearly articulated mission. The institutions most likely to succeed in the next phase of online education will be those that align online growth with authentic institutional strengths rather than viewing online expansion as a standalone solution to broader structural challenges.

The rapid advancement of artificial intelligence tools is introducing yet another dimension to this calculus. Generative AI is demonstrating meaningful potential to reduce the cost and complexity of course development, one of the core functions that historically justified OPM engagement. In EDUCAUSE Review it was noted that AI-assisted instructional design can significantly enhance the scalability of course development within institutions, enabling faculty and instructional staff to produce and update content more efficiently than was previously possible.

As these capabilities mature and become more widely adopted, institutions may find themselves less dependent on external providers for development support, which further diminishes the rationale for long-term, revenue-sharing OPM contracts. Institutional leaders would be well served to consider how AI-augmented internal capacity factors into their partnership strategy going forward.

Governance, Mission, and Institutional Control

Beyond financial considerations, there is a deeper tension that many leaders find difficult to articulate but equally challenging to disregard: the question of who is effectively governing the institution's online presence. Does the messaging reflect the institution's mission and values? Is it disproportionately weighted toward OPM-supported programs?

Depending on how the partnership is structured, colleges may find OPMs making consequential decisions regarding marketing strategy, recruitment messaging, enrollment operations, and student communication, while also controlling access to institutional data, shaping the positioning of the institutional brand, and managing the day-to-day operations of program delivery.

For mission-driven institutions, this tension can be especially acute. Questions abound about whether OPMs are targeting students who are most susceptible to debt traps.

Faith-based institutions, regional universities, and colleges with a distinctive identity developed over generations are concerned with more than surface-level brand consistency. In many instances, OPM-managed programs are substantively identical across multiple institutional partners, differentiated only by institutional branding. Academic leaders are confronting a fundamental question: if the institution's online presence is effectively administered by an external party, can the institution credibly claim to present itself authentically? Do prospective students and prospective faculty members understand who the institution genuinely is?

There are also significant internal governance questions to consider. When online operations are substantially administered by a third party, institutional leaders must grapple with how that arrangement affects faculty engagement, shared governance, curricular oversight, academic quality assurance, and the broader institutional culture that defines the character of the institution. The American Association of University Professors (AAUP) has documented concerns about third-party involvement in instructional technology and data analytics and its implications for faculty governance (AAUP, 2021). Addressing challenges that emerge in a dual-authority environment can be considerably more complex than in a fully internally managed model.

None of this suggests that outsourcing is inherently inappropriate. It does mean, however, that the tradeoffs must be made visible and deliberate, rather than embedded in contractual terms agreed to when the institution was in a fundamentally different strategic position.

Increasing Regulatory and Market Scrutiny

The scrutiny is not confined to institutional boundaries. Federal policymakers and regulators have intensified their examination of OPM arrangements in recent years, with concerns focused on revenue-sharing structures, incentive compensation compliance, recruitment practices, transparency obligations, third-party oversight, and the protection of students.

The GAO's 2022 report on OPM oversight signaled that federal attention to this sector is real and growing, and that institutions with inadequately structured or documented OPM arrangements may face heightened regulatory scrutiny in the future. Concerns related to student privacy have also intensified, as students are rarely informed about the OPM's role in delivering their programs or in managing their personal data.

The competitive environment has also shifted substantially. In 2013, simply offering an online program constituted meaningful market differentiation. Today, the landscape is considerably more crowded. Students have a broad array of options, and their expectations have grown commensurately. They are seeking programs that are academically credible, current in their content, aligned with workforce demands, and supported by robust student services.

The Shift Toward More Flexible Partnership Models

The partnership market has matured in parallel with the evolving needs of institutions.

Institutions seeking partnership support today are articulating priorities that differ markedly from those of their predecessors. Institutional autonomy, operational flexibility, transparent pricing, and shorter contractual terms have largely supplanted the comprehensive outsourcing arrangements of an earlier era. Institutions are seeking shared infrastructure that enables scalability without compromising mission alignment, and they are placing greater emphasis on retaining a larger share of the revenue they generate over the long term. Fain (2025) writing in Inside Higher Ed suggests that this trend is reflected in market data: fee-for-service partnerships grew from 12 percent to 58 percent of all new OPM arrangements over the past decade, even as overall OPM partnership activity declined 42 percent in 2024 alone.

In practice, this is manifesting as a shift away from comprehensive outsourcing arrangements toward:

• Fee-for-service partnerships
• Hybrid operational models
• Shared services structures
• Consortium-based collaborations
• Institutionally controlled online ecosystems

EAB and other higher education research organizations have drawn a similar conclusion: the institutions best positioned for the emerging landscape are not those that secured the most favorable OPM contract in 2015. They are the institutions that have developed flexible operational ecosystems capable of adapting as workforce demands shift, demographic conditions change, and student expectations continue to evolve.

The binary framing of "build internally or outsource entirely" has given way to a more nuanced set of questions: how can institutions collaborate in ways that are scalable without forfeiting ownership? How can they structure partnerships that withstand regulatory scrutiny and avoid the conflicts of interest inherent in poorly designed revenue-sharing arrangements?

The Continuing Role of Strategic Partnerships

Importantly, the reassessment of traditional OPM contracts does not imply that institutions will become less reliant on external expertise altogether. In many respects, the opposite may prove true. Emerging technologies, including artificial intelligence, predictive analytics, student engagement systems, advanced instructional design platforms, and retention analytics are increasing the operational complexity of modern higher education.

Many institutions will continue to rely on specialized external partners to support these capabilities. The distinction is that institutions are increasingly seeking more targeted, transparent, and flexible collaborations rather than comprehensive long-term outsourcing arrangements that transfer substantial operational control and revenue to third parties.

As institutions mature operationally, academic leaders are becoming more selective about which functions truly require outside expertise and which capabilities should remain institutionally controlled. Rather than outsourcing entire online ecosystems, many colleges are pursuing modular partnership strategies that preserve institutional ownership while leveraging specialized support where it creates genuine value. This evolution reflects a broader strategic shift across higher education. The next generation of institutional partnerships is likely to emphasize operational flexibility, transparent pricing structures, shorter contractual terms, and collaborative models that strengthen institutional resilience rather than increasing institutional dependency.

Shared Academic Infrastructure as an Emerging Strategy

One strategy gaining increasing attention is the sharing of infrastructure across institutions, rather than each institution independently constructing its own capacity or outsourcing it in its entirety. The underlying concept is straightforward: pool resources where consolidation creates efficiencies, preserve institutional distinctiveness where it matters most, and ensure that governance authority and financial returns remain with the institutions performing the work.

Implemented effectively, shared infrastructure enables institutions to expand their program offerings more rapidly, reduce redundancy in course development expenditures, enhance instructional efficiency, and provide students with access to a broader range of courses while achieving a degree of operational flexibility that neither a fully insourced nor a fully outsourced model typically provides.

Lighthouse Education Consortium is organized around precisely this model. Rather than requiring member institutions to relinquish revenue and operational control, the Consortium enables colleges to share courses, expand the breadth of what they can offer students, and retain the financial and governance advantages within the institutions themselves.

The objective is not to grow as rapidly as possible. It is to grow in a manner that is sustainable while remaining true to the institution's identity and mission.

Strategic Questions for Institutional Leaders

For institutional leaders currently evaluating their online strategy or a partnership approaching renewal, the following questions merit careful consideration:

• Which online capabilities should remain internal versus externally supported?
• How dependent is the institution on third-party infrastructure?
• Does the partnership structure preserve institutional flexibility as market conditions evolve?
• Are online programs advancing institutional mission or simply expanding enrollment volume?
• How are faculty governance and academic oversight preserved in online operations?
• What level of operational ownership is necessary for long-term sustainability?
• Does the current model strengthen institutional resilience or create new forms of dependency?

None of these questions has easy answers. But they are the right questions to be asking, and the institutions engaging with them seriously are the ones laying the foundation for something genuinely durable.

Leading the Next Phase of Online Education

Online education has long since ceased to function as a pilot initiative. It is now core institutional infrastructure, as fundamental to how a college operates as its physical campus, its faculty, or its accreditation standing.

OPMs served an important purpose. They enabled many institutions to enter online markets that might not otherwise have been accessible, and that access was consequential. However, the next phase of online education calls for a different approach; models that prioritize resilience over speed, institutional ownership over the convenience of outsourcing, and long-term sustainability over near-term enrollment growth. The institutions best positioned a decade from now will be those that built operational models flexible enough to adapt as demographic conditions shift, workforce demands evolve, and student expectations continue to change.

For provosts and academic leaders, the question is not whether to expand online. It is how, and with whom. The right answer will differ for every institution. But it begins with an honest assessment of what the current model is actually delivering and whether there is an opportunity to build something more sustainable, more mission-aligned, and more resilient.