As Growth of Online Universities Explodes, Student...

As Growth of Online Universities Explodes, Students May Get Shafted

Whenever you turn on a TV here in Washington, DC, you’re almost certainly going to run into an ad for University of Maryland University College, an online education provider and member of the University of Maryland system. But that’s not all! Walk outside and the sides of buses will loudly proclaim the benefits of an online MBA program, followed by your car radio letting you know that it’s not too late explore one of Southern New Hampshire University’s over 200 online career degree programs. 

It’s understandable why higher education ads are following me like I’m living in Minority Report.

Online education is a growth industry, especially for public and nonprofit institutions. According Margaret Mattes, a policy associate at The Century Foundation, the $1.5 billion industry that equips schools with online programs runs the risk of pitting the interests of students and investors against each other, even at public schools. 

Public Schools, For-Profit Programs

Public colleges and universities have significantly expanded their online offerings in recent years. With state support diminished and enrollment flagging, revenue from online and distance education programs are an attractive funding stream. 

As they do with many other services, universities have contracted with private businesses to facilitate their expansion into online education. These companies are known as online program managers (OPMs), and the services they offer exist on a spectrum that begins with providing enterprise software and ends with providing the educational content itself. 

These arrangements save the universities the significant upfront costs associated with offering classes online, making these programs a reality at schools that otherwise couldn’t afford to invest in the staff and infrastructure necessary. The problem comes when, as The Century Foundation report shows, the contracts task the for-profit entities with educational responsibilities that should be provided by the school itself, or when students aren’t protected from questionable business practices. 

The College Equivalent of Two Kids In a Trench Coat

There’s a reason students turn to recognized, public universities to pursue their education: they don’t want to get swindled by unscrupulous hocking scam degrees

Many agreements by OPMs simply provide access to proprietary software where university staff can host content. Others not only include the platform, they also provide services like content creation, enrollment support, marketing, student retention, and tracking student outcomes. One of the most extreme examples, brought to us by a company actually named Education To Go, offers colleges an à la carte menu of courses and degree programs they pay “wholesale” price for, while the company charges students the “retail” price. The college gets a cut of the money in exchange for relinquishing any responsibility for educating students. All they do is provide the marks. 

In almost every case, there’s no way for a prospective – or current – student to tell if a third party is providing their education. Some of the agreements mandate that the company’s role be obscured. Applicants may think they’re enrolling in the same program as students on campus, without knowing that their education was contracted out.

Students That Applied For a Harvard MBA Were Also Interested In: Coastal Oklahoma University School of Business

These arrangements also expose students at public schools to the same unseemly business practices that dominate the for-profit education sector. When business’ profits depend on enrollment and marketing, students’ personal information become a valuable asset. The Century Foundation offers an astounding anecdote in their report that demonstrates how student data is commoditized:

Indicative of just how valuable these leads are to OPMs, 2U paid the University of California-Berkeley $4.2 million in 2014 for the permission to ask applicants, including those who were denied entry into the Berkeley program, if they would like to learn more about another, similar program offered by 2U and Southern Methodist University. Similar clauses exist in other agreements. Through a 2015 amendment to the service agreement between the University of North Carolina and 2tor—the predecessor of 2U—the company has since been allowed to engage in “targeted marketing…about any or all Competitive Program(s) and/or Competitive Program School(s) to Program applicants denied admission into the Program.”

These arrangements, if not carefully constructed, force students to compete against the interests of a for-profit company and its investors.

Colleges are facing a variety of financial pressures, as I noted in my piece on college closings. As these institutions work to reinvent themselves to meet the needs of current and future students, it’s critical that publicly funded institutions, as well as tax-exempt nonprofit schools, are held accountable for upholding their educational mission. 

(Illustration courtesy of Reductress)


About Matt Miller

I'm a politics and policy staffer from Philadelphia, who's now a writer for High Faluter and aspiring journalist in Washington, DC. My hobbies include running, pretending I know about wine (or, insert any subject), and yelling about Paul Ryan. I was told to write five sentences, but I wrote three annoyingly long ones instead.