The Dept. of Ed. v. Online Learning

It won’t surprise many readers of Inside Higher Ed that online learning has become a fixture of higher education. In fact, most college students today probably can’t imagine not taking courses online. Six in 10 undergraduates enrolled in at least one online class in 2021.

Evidence shows students are overwhelmingly satisfied with distance learning options: a remarkable 98 percent of students in online programs and 96 percent of graduates say they would recommend online education to their peers. In 2021, enrollment in online and blended courses increased at a higher rate than in-person classes among both traditional-age and older adult students. And as Inside Higher Ed reported in August, two-thirds of universities plan to add new online-only programs, though many lack the in-house capacity: fewer than a quarter of chief online learning officers surveyed say the majority of their faculty has the expertise to design digital courses.

It will surprise readers, then, that President Biden’s Department of Education is now seeking to crack down on the businesses that help universities develop, implement and deploy online programs. This regulation in search of a problem threatens to stifle innovation and make higher education less accessible, especially for minority and economically disadvantaged students.

In February, the Education Department announced sweeping guidance that would significantly alter the contractual arrangements between colleges and universities and online program managers (OPMs)—the vendors that help colleges build and operate digital platforms for online courses. While the department has delayed implementation of this guidance in the face of sectorwide pushback, it has already telegraphed its real goal: full-access regulatory review of colleges’ contracts and the elimination of these expert intermediaries, putting the full burden of online programming on the shoulders of inexperienced administrators.

OPMs serve an important role. These vendors provide the tools to develop and market online programs, saving colleges from having to build from the ground up. Just as a college might outsource its food service, campus security or transportation, these relationships allow administrators to focus their attention where it matters most—on students’ learning. What’s more, OPMs’ specialization creates cost savings for institutions and gives students access to leading-edge technology.

The Obama administration recognized that OPMs are vital to the continued growth of online education. That’s why in 2011 the Department of Education established guidance that protects colleges’ relationships with OPMs and their right to negotiate mutually beneficial terms. Ironically, the Education Department is now trying to undo the policy implemented under then vice president Biden.

To justify its action, the Department of Education pointed to a Government Accountability Office report released last year that recommended better monitoring of colleges’ agreements with OPMs to ensure they comply with prohibitions on incentive-based compensation in student recruitment. Yet the report did not suggest that the rules governing OPM relationships should be overhauled; it simply called for better instructions for auditors and colleges. Nevertheless, the department used it as fodder to jump straight to a process to eliminate OPMs.

Already the move has created uncertainty among administrators, vendors and industry experts. Inside Higher Ed noted that interviews with education leaders “revealed a mix of confusion, concern and outright amazement at the scope of the new guidance and its potential impact on companies and other organizations that help colleges recruit, educate or retain students, and on the institutions themselves.”

Implicit in the department’s guidance is the presumption that agreements through which colleges share tuition revenue with OPMs are inherently bad—that they must create a conflict of interest: students or profits. That’s just not true. In fact, revenue sharing is a resourceful way to overcome start-up costs that otherwise can prevent small colleges from getting online programming off the ground. For many, revenue sharing is the only financially viable way to offer online coursework.

Creating an online program requires a lot of investment, as does marketing it. Revenue sharing offloads the front-end burden, which can be imperative for colleges that lack the multibillion-dollar endowments of larger household name universities. Without OPMs to shoulder start-up costs, these smaller colleges—many already struggling—would fall even further behind.

This may be why many historically Black colleges and universities, like Howard University and Morehouse College, partner with OPMs. The per-student endowment, on average, at public HBCUs is 71 percent less than that of public non-HBCU institutions, and HBCUs are more likely to be tuition dependent. This means these institutions have fewer resources to invest in starting up an online program.

The department’s ham-handed OPM regulation would have a ripple effect across the higher education ecosystem. Approximately nine out of 10 colleges that have arrangements with OPMs are public or nonprofit. If the department truly means to weed out fraudsters, it is using a sledgehammer where a scalpel is needed.

To be sure, damage has already been done. The American Council on Education joined more than 80 other higher education organizations in calling for the guidance to be rescinded and arguing that the department’s concerns about transparency and oversight for OPMs would be better addressed through negotiated rule making. It’s worth noting that ACE, often considered the voice for traditional higher education, is headed by Ted Mitchell, who oversaw initiatives focused on HBCUs and minority-serving institutions under President Obama’s Department of Education. That his organization would lead the charge in calling out the Biden administration’s misstep shows it is not a partisan issue; it is a matter of continued innovation, or not.

Online learning is one of modern education’s most utilized and favored innovations, and it owes its success to OPMs. The Department of Education would be wise to remember an old adage: if it ain’t broke, don’t fix it. The Biden administration should rethink this unnecessary rule change lest its legacy be one of effectively closing off an increasingly popular path for accessing higher education.