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Why The Resignation Of This Particular College President Matters

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It’s entirely understandable if you did not hear the news that the President of the University of Texas, Arlington (UTA) resigned this week – there’s plenty going on. In higher education alone, the world is different than it was six weeks ago, there’s a ton of noise in the system now.

Nonetheless, the reason for his departure is significant. It’s probably even more significant now than it was six weeks ago.

According to reporting by the Dallas Morning News, Vistasp Karbhari, the outgoing President of UTA resigned amid reports that he and his administration had too cozy a relationship with Academic Partnerships – a prominent, large OPM. That stands for online program manager. It’s an outside company that colleges can hire to, as the name makes clear, manage their online programs.

Usually, an OPM does things such as design online courses, manage enrollments and student matriculation and, importantly, market the program and recruit students.  Even more importantly, many and perhaps even most of the agreements between OPMs and colleges have been set up as what’s called a revenue share deal in which the for-profit OPM and the college spit the tuition students pay for online learning. These private OPM companies take between 30 and 80% of the revenue paid by students.

Pretty much from the start, observers worried that allowing a company to take a portion of tuition revenue while being responsible for student recruitment and retention would be a conflict – the more students a company got in, the more tuition those students paid, the more profit the company would collect. Such an arrangement could pressure recruiters to mislead or misrepresent programs or their outcomes. This incentive could also put pressure on schools to lower admissions standards and water down course standards, getting more students in and keeping them in, paying more for longer.

That, among other things, is what leaders at UT, Arlington have been accused of – working with a for-profit company to weaken admissions standards for online programs, goosing up their enrollments and corporate profits.

Former President Karbhari denies the allegations, although an independent report commissioned by the state university system corroborates them.

According to that inquiry, as reported by the Morning News, Karbhari and others on his team, “allowed the vendor [OPM] to push for expedited enrollment processes that let under-qualified students enroll into the school’s online nursing program.” And that he, “even suggested to the vendor [OPM] that grade average standards be lowered in order to drive up enrollment.” The state report found that OPM executives “significantly influenced” the school’s admissions processes and decisions.

Keep in mind that, because the school and OPM share the revenue, “enrollment” and “admissions” means “profit.”  According to the news report, UT, Arlington paid the OPM Academic Partnerships, “more than $178 million over about a five-year period” as their online nursing program became the largest in the country, almost three times larger than any other.

If it’s even partly true that an outside company influenced a college to relax its admissions requirements so it could boost its profits, it’s both scandalous and exactly what critics of OPMs worried about. Namely that profit and greed would eclipse academic standards, creating a profit-fueled race to the bottom, that public and non-profit schools would behave like for-profits because their online programs are run by for-profits.

In this case, that exact situation appears to have cost a college President his job. In Oregon earlier this month, a different tuition-sharing deal with a different OPM caused an entire school to close.

Neither is an isolated incident. Nationally, hundreds, maybe even thousands of colleges have revenue-sharing OPM contracts on their books. Even UT, Arlington’s response to the state inquiry ominously and opaquely referred to the, “UT System’s concerns of oversight at other campuses.”

Even in normal times, before six weeks ago, those OPM agreements were toxic assets, deals that were bound to continue devouring colleges and their leaders. But now, as every college and university in the country has become a de facto online program, they could be fatal. If even some of the existing OPM contracts require sharing revenue from every online student and the private companies gobble up half that revenue, colleges will close.

Whether the consequences come quickly and all at once or dripped out over the next few years, no one should claim surprise. It’s difficult to feign shock that the fox you invited into your hen house ate the hens. For-profit companies seek profit and they will find ways to do that, including pressuring schools to squeeze just a few more students in, squeeze just a few more dollars out, as it appears happened in Texas.

In other words, this particular canary in this particular coal mine stopped singing. It’s not clear whether anyone is listening.

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