Texas is quickly rapidly evolving into a hub for technology and innovation, as the state continues to serve as a refuge for companies and homeowners fleeing the regulatory morass of California.
Unfortunately, there are some bad regulations that just can’t be escaped.
In response to the state’s rise as a hub for ascendant technology, Texas universities have worked to build out programs that would allow students to take advantage of tech opportunities. This is a no brainer. Unfortunately, the federal government is throwing a wrench in the works, by pushing for regulatory changes that would dramatically disrupt institutions' ability to partner with online program managers (OPMs) - a critical partner that’s helping schools scale up low-cost, relevant programs to meet emerging market demands.
These partnerships between universities and OPMs took off after the Department of Education (ED) issued a Dear Colleague Letter in 2011, to provide guidance on college contractors, called “third-party servicers.” At the time, the ED clarified that contractors offering “bundled services” (often a combination of online technology platforms, coursework design, recruiting, and other services) could be compensated via tuition revenue-sharing arrangements.
But, over a decade later in February 2023, President Biden’s ED threatened to eliminate the bundled services exemption and potentially regulate the actions of nearly any private company doing business with a college. Among those most impacted were education technology companies called online program managers (OPMs), which help colleges and universities offer online classes, for a fraction of the cost than if universities were to handle such online activities themselves. They are frequently compensated via the revenue split model reflecting the students that enroll in the program.
The ED initiated a public comment period during which a multitude of experts, organizations, and traditional colleges and universities expressed strong opposition, causing the ED to withdraw their proposed restrictions just a few months later. More than a year later (July 17, 2024), the ED pledged to re-issue guidance in late 2024. Until and unless new regulations are enacted, OPMs continue to operate under the original 2011 guidance.
A number of Texas institutions have fruitful partnerships with OPMs. UT Austin and UTSA have partnered with an online program manager, 2U, to launch student boot camps to expand expertise in emerging tech fields, including web development, cyber security, and data analysis, and offering coding and data analytics bootcamps.
The University of North Texas filed comments expressing their concern with the Department’s intention to limit avenues for partnerships between OPM and universities, as the university has a fruitful partnership with education-provider Coursera. In comments submitted in response to the Department’s comments, UNT’s Vice President of Digital StrategyAdam Fein outlines the parameters of that partnership, as well as how it’s benefitted the institution.
North Texas, in partnership with Coursera, has been able to develop two fully-online graduate degree programs: a Bachelor of Applied Arts and Sciences (BAAS) completion degree with 8 highly-desirable concentrations designed for individuals with some college credit, but no degree, and a 100% online Bachelor of Science in General Business (BSGB), both at a price point of $330 per credit hour with no additional fees.
Because these programs are fully online, UNT is able to offer them to students at a significantly lower cost, and in partnership with Coursera, they’ve been able to enroll and educate adult learners whose commitments might otherwise prevent them from earning a degree at a traditional brick and mortar institution. As Fein notes in his comment, UNT’s ability to adapt and scale up programs at a relatively low cost when new opportunities emerge is enabled by their ongoing revenue sharing agreement. Forcing institutions to pay the full freight up front, as the proposed change would require, makes success stories like this nearly impossible.
Americans are broadly dissatisfied with the state of higher education. This willingness to allow market participants to seek out mutually beneficial arrangements that allow them to adapt to changing market conditions is why Texas is booming. Regulatory policy should allow space for states to innovate, to seek out partnerships like these help institutions in our state improve outcomes, lower costs, and reach new students looking to better their lives. Federal regulators would do well to listen to the stakeholders in Texas and across the country when they speak to the benefits of these partnerships.