There is an ongoing national debate around foundational aspects of higher education, including ideological biases, free speech, the cost of a degree and the best way to deliver services.
These topics yield deep disagreements, but a healthy university system that offers robust educational pathways and adequately prepares students for work is to the benefit of a state. Colleges and universities in Georgia frequently cite the successful establishment of workforce pipelines as helpful to the state’s economy and local communities. This, along with Georgia’s general philosophy of light regulation and encouraging growth, has made the state attractive to investors and startups.
For over half a century, colleges have been able to outsource services to contractors called “third-party servicers.” These contractors often offer what the federal Department of Education calls “bundled services,” or a combination of online technology platforms, coursework design, recruiting and more. Contractors offering bundled services could be compensated via tuition revenue-sharing arrangements. But recently, colleges throughout the country have dealt with federal interference in these established partnerships.
In February 2023, the Biden administration threatened to eliminate this bundled services exemption and potentially regulate the actions of private companies doing business with colleges. Among those most impacted were education technology companies called online program managers (OPMs), which help to facilitate online classes. OPMs are frequently compensated via the revenue split model reflecting the students that enroll in the program.
This action from the Department of Education prompted a strong response in opposition from experts as well as higher education institutions. This caused the Department of Education to withdraw their proposed restrictions in May of 2023. Over a year later, in July 2024, the Department stated that it plans to re-issue guidance later this year.
Georgia politicians are quick to point out the differences between the performances of the state and federal governments. It is intuitive that Georgia institutions have a better understanding of what works and what doesn’t work for them than the federal government. This holds true as well for higher education.
The support expressed in 2023 for the existing regulatory framework that allows for OPMs to work in higher education outlined several benefits to their usage. Colleges can offer online programs at little to no upfront cost, and online programs can be offered in courses that would otherwise be prohibited by infrastructural costs. These courses have gained popularity due to the expanded access they provide, especially to nontraditional students like those working full-time jobs and military service members.
OPMs allow contemporary higher education to remain accessible and affordable for traditionally underserved populations. Rather than commit to overregulation, the Department of Education should allow universities to continue to engage in the third-party partnerships that have been established for years, and which are proven to be beneficial to the university’s students.
These benefits are relevant and have been noticed by higher education representatives in Georgia.
Georgia Tech’s Richard DeMillo, who served as Founding Director of the school’s Academic Innovation Laboratory, commented on the importance of online partnerships to Georgia Tech. In his comment, he urged the Department to leave the door open for institutions and their OPM partners to have a wide range of financial models available to define their partnerships:
“Our agreements with these companies enabled innovation that would have been impossible without partners who believe in affordable access to high-quality education and are willing to co-invest and share the risks involved in developing scalable platforms and technologies for both credit-bearing and non-credit offerings.”
DeMillo went on to cite how the relevant programs showed increases in applications in underserved communities and their ability to improve quality while lowering costs.
Spelman College, a historically black, women’s liberal arts school, has invested in online education through the online program manager Guild, as a means of attracting new learners who might have otherwise been unable to attend college full-time.
Spelman leadership outlined the benefits of these programs:
“Stepping into a more robust online presence and focusing on workforce-aligned learning was strengthened by the expertise of partners such as Guild. This partnership has been critical to our success in extending opportunity to new learners. It has allowed us to connect the newly launched eSpelman with employers across the country, enabling companies like Target, Walmart and Hilton to offer Spelman’s programs to their frontline employees without requiring the employees to front tuition on their own. By facilitating payment directly from these companies to Spelman, this arrangement allowed employees to realize their dream of attending an HBCU without the burden of taking on student debt or having to uproot their families to do so. It bears emphasizing that Spelman – not Guild – creates and hosts all educational programming, directs admissions, and teaches classes directly.”
At a time when it’s clear that many Americans are dissatisfied with higher education, the Department should be encouraging institutions to seek out fruitful partnerships and new dynamics. Federal efforts to limit these revenue sharing agreements, which have worked for Georgia institutions, should be scrapped.