Three Initial Takeaways from the GAO Report on OPMs
The long-awaited report from the Government Accountability Office (GAO) on the US Department of Education (ED) oversight over Online Program Management (OPM) contracts is out, and as most observers have stated, it is a fairly neutral report with no bombshells. You can access the full report here and Inside Higher Ed’s early coverage here. The two recommendations from GAO:
This sounds simple and obvious. Who can argue that ED should actually provide guidance to auditors and colleges on collecting information to ensure compliance with the well-established incentive compensation ban and the 2011 Dear Colleague Letter’s clarification? On the surface this is a matter of come on ED, do your job. But there are a few takeaways of significance that are worth considering.
Very Narrow Scope
This report was very narrow in scope in that it is not about OPM oversight in general. The entire report is based on the one issue of incentive compensation bans and OPM usage of tuition revenue sharing models.
There is nothing on oversight of student outcomes, separation of instruction from OPM services, methods of admission. Well, the enrollment decision issue is indirectly covered in the 2011 Dear Colleague letter that provides exceptions to the incentive compensation ban.
Very Broad in Scope
At the same time, the report is very broad in scope in that it defines an academic program as anything with more than two courses.
In terms of programs, this report encompasses:
Certificate-based programs (including for non-matriculated students such as in continuing education programs)
In terms of vendor categories, or markets, it seems to encompass:
Traditional OPMs (think 2U / edX, Pearson, Wiley Academic Partnerships, Coursera)
Employee benefit management companies (think Guild, InStride)
Potentially Others . . .
ED Plans to Go Even Broader in Scope
And on that topic:
Not saying that GAO *findings and analyses* are not useful - just that the bigger impact will be the report's *usage*.
— Phil Hill (@PhilOnEdTech)
May 5, 2022
I’ll write more regarding my comment of both the Department of Education and the Federal Trade Commission (FTC), but I will note that I have had private disagreements sent to me on this point.
The most telling part of the report is in the response from ED in an appendix, where the department said that they are already working on changes that go beyond the scope of the GAO report. [emphasis added]
ED agreed with both GAO recommendations and added more detail. [emphasis added]
As a start, it is quite clear that Education Benefit Providers like Guild Education and InStride will be impacted, and I have argued that they are a form of OPM. Online programs, recruiting students, tuition revenue share models. Online global course and program providers like Emeritus could also be impacted. And what about other EdTech contracts? Clearly Bootcamp providers and online continuing and executive education contracts could be in scope.
ED is unlikely to trigger changes to all third-party contracts with payment based on enrollment levels, but it is also unlikely that they will stick just to OPMs. There are a lot of questions, but the issue to watch is how broad and how deep the upcoming ED actions will be on the subject.
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