Once a peripheral offering in higher education, online and distance education is becoming essential to the mission of many colleges and universities today. More and more vendors, also known as “Bundled Service Providers” (BSPs), are competing to cash in on the continued growth of online education in higher education. Services offered by the BSPs include market research, lead generation and marketing, admission counseling, course development and 24/7 technical support. Most BSPs charge on a revenue share basis where the vendor keeps 20% to 65% of the gross revenue for a course/program. One vendor, Academic Partnerships made $4 million from its share of tuition from Arizona State, over $10 million from Florida International University, and $18 million from Ohio University’s nursing program in 2012. (Source: http://www.insidehighered.com/views/2013/05/31/nonprofit-colleges-should-be-wary-new-breed-profit-players-essay).
Some of the major players in this space include:
The eagerness of for-profits to enter the online education higher education market sounds very familiar. In the late 90’s and early 2000’s, dot-coms and for-profits were jumping onto the distance learning bandwagon to launch new online programs. NYU Online, Virtual Temple, US Open University and Arizona Learning Systems were very popular until the dot-com bust which forced the closure of many of these new online ventures.
Some faculty members are beginning to push back on some of these partnerships. An October 11, 2013 issue of Inside Higher Ed, reported on a recent clash between faculty and administration at Rutgers about a partnership with Pearson. Faculty were concerned about intellectual property rights and academic freedom as well as sharing the revenue from tuition with an outside vendor.