These companies are called online program managers, or OPMs, an acronym that could come right out of “Office Space.” They have goofy, forgettable names like 2U, HotChalk and iDesign. As the founder of 2U puts it, “The more invisible we are, the better.”
But OPMs are transforming both the economics and the practice of higher learning. They help a growing number of America’s most-lauded colleges provide online degrees—including Harvard, Yale, Georgetown, NYU, UC Berkeley, UNC Chapel Hill, Northwestern, Syracuse, Rice and USC, to name just a few. The schools often omit any mention of these companies on their course pages, but OPMs typically take a 60 percent cut of tuition, sometimes more. Trace Urdan, managing director at the investment bank and consulting firm Tyton Partners, estimates that the market for OPMs and related services will be worth nearly $8 billion by 2020.
What this means is that an innovation that should have been used to address inequality is serving to fuel it. Instead of students receiving a reasonably priced, quality online degree, universities are using them as cash cows while corporate middlemen hoover up the greater share of the profits. In a perfect twist, big tech companies are getting the spill-off, in the form of massive sums spent on Facebook and Google ads.