The Corporations Devouring American Colleges

higher-educationfor-profit-educationonline-learningopmstudent-debt

Abstraction: How online program managers (OPMs) extract profit from university online degrees

Key points:

OPMs (Online Program Managers) such as 2U take ~60% of tuition from university online degrees; the OPM market was projected to reach $8 billion by 2020
John Katzman founded 2U in 2008 after Princeton Review; model: OPM provides capital, marketing, tech, and support in exchange for majority revenue share — first deal with USC in 2008
A 2011 Department of Education ruling explicitly permitted revenue-sharing with OPMs as part of "bundled services," enabling rapid industry growth
Georgia Tech's OMSCS (launched 2014 with Udacity and AT&T funding) charges ~$6,600 vs. comparable programs at $50,000–$100,000+ by demonstrating online delivery need not be expensive
For-profit colleges repeatedly exploited federal student loan programs (G.I. Bill era, 1960s, 1990s, 2000s) with aggressive recruiting and worthless degrees; OPMs use nonprofit university brands as cover for similar practices
Grand Canyon University's 2018 nonprofit conversion: parent company LOPE receives 60% of tuition + $52M/year in loan interest, while university gains nonprofit tax status and federal aid eligibility — described as "a trustworthy-looking wrapper around a for-profit business"

Connections: 2u · Georgia Tech · Online Education · Education Policy