Author: Ray Schroeder
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Edward J. Maloney and Joshua Kim, Inside Higher Ed
Rather than passing along the savings of online education to students — as Carey argues that online means “no buildings to maintain, no lawns to mow, no juice bars and [no] lazy rivers” — the tuition dollars are being instead converted to corporate profits for the OPMs. The classic online program management business model is for the company to fund the costs of developing the online programs, recruiting the students and running the programs — and in exchange the OPM received a share of the tuition. This revenue share to the OPM is typically around 60 percent. The OPM market is growing, with Carey quoting Trace Urban from Tyton Partners saying that the market is likely to be worth $8 billion by 2020.