Are OPM partnerships under increased scrutiny in UK higher education?
Image by Gerd Altmann from Pixabay
If you follow UK higher education news closely, you’ll know that franchised provision has been coming under increasing scrutiny. For those less familiar with the concept in a higher education context, franchising is when a university allows another provider to deliver all or part of a course on its behalf. The university, as the lead provider, typically retains a percentage of tuition fees, with the remaining amount paid to the other provider, often referred to as the delivery partner.
The increased scrutiny has mainly been driven by concerns over fraudulent activity within franchise relationships. In 2022, the Student Loans Company (SLC) uncovered evidence of potential fraud linked to franchised providers, prompting investigations across multiple institutions, the suspension of tuition payments, and the withholding of millions in student funding. Also in 2022, a lead provider reported suspected widespread academic misconduct at a franchised delivery partner, leading to the withdrawal of more than 1,000 students and the recovery of millions in tuition and grant funding.
Following an investigation, the National Audit Office (NAO) published a report in January 2024, leading to proposed changes in how franchise relationships operate. In January 2025, the Department for Education (DfE) announced plans to require franchise delivery partners with 300 students or more to register with the Office for Students (OfS), the UK’s higher education regulator.
Fraud has not been the only issue raised with these relationships. Other concerns include poor-quality provision from delivery partners, dubious marketing and recruitment practices, insufficient oversight, and financial overdependence on these relationships by lead providers. On the last point, a recent article in i News suggested that up to 10 universities could be at risk of going bust if their franchise partnerships fail due to financial reliance on these arrangements.
Franchised provision and partnerships typically serve two main objectives: they offer universities an alternative revenue stream and enable them to reach—or support the reaching of—different types of students. The same applies to other relationships under the broader category of sub-contracted or collaborative provision.
Although not typically referred to as franchised provision, partnerships play a significant role in online education within UK higher education. Over the past decade, there has been a rise in partnerships between UK universities and online programme management (OPM) companies, as well as other online education providers, to deliver online programmes.
OPM partnerships share similarities with franchised provision, and a question I and others have had is the extent to which the evolving regulation and scrutiny on sub-contracted provision is also focused on OPM partnerships, and directly or indirectly, whether any new measures might impact these partnerships.
Are OPM partnerships subject to the same scrutiny as franchised provision?
There is some uncertainty over whether OPM partnerships are genuinely within the scope of this scrutiny and regulatory changes. When the Office for Students (OfS) published its insight brief on subcontractual arrangements in higher education, I contacted them to clarify whether OPM relationships were included in this increased regulatory focus. The response I received was that the OfS is “particularly focused on arrangements where one provider allows another organisation to deliver all or part of a course on its behalf, particularly where more than 50 per cent of the teaching is delivered by the third party. This includes both in-person and online teaching.”
This does align to some extent with OPM partnerships, but the central issue driving increased scrutiny and regulatory changes does not seem to fully match. This is mainly because the focus is on undergraduate provision and concerns about improper access to student finance at this level. For those less familiar with student finance, this is because, for undergraduate study, government funding in the form of student loans is paid by the Student Loans Company directly to providers, with some of that funding reaching franchise partners.
In contrast, the vast majority of OPM and university partnerships focus on online postgraduate master’s degrees, with only a small number involving undergraduate courses. Interestingly, the OPM partnership with the highest number of online bachelor’s degrees is registered with the OfS under an Approved (fee cap) registration. This is notable because a key government measure due to be introduced will require any franchise partner with over 300 students to register with the OfS, something they are not currently required to do. However, this measure appears to be almost entirely aimed at preventing abuses of the student finance system for undergraduate provision.
As I’ve already mentioned, for most OPMs, this is not relevant, as their partnerships are focused on online master’s degrees. The main, and in most cases only, student loan available to students studying under an OPM partnership is the postgraduate master’s loan. This loan is paid directly to students and, unlike undergraduate provision, does not involve direct funding flows from government student finance to providers.
So, while there is some overlap between franchising and the issues that brought this scrutiny to the surface, there is not a close alignment between the central concerns and the main regulatory response, which remains focused on access to student loans for undergraduate study.
How do OPM partnerships compare to franchised provision?
It is worth considering the broader issues that have drawn greater attention to subcontracted partnerships and provision. One of these is aggressive, misleading, or questionable recruitment and sales practices. A New York Times article in summer 2023 highlighted some egregious examples from a particular delivery partner, including prospective students being offered misleading financial incentives, the targeting of specific communities with messages suggesting they would be paid to obtain a British degree, and exceptionally low admission standards aimed at driving enrolments and revenue.
A persistent criticism of OPM companies has been their recruitment and marketing practices, but this has mainly been in the US. This is partly due to the fact that debate around OPM companies and partnerships has been much more prominent there.
However, it’s important to point out that the debate there has not always been the purest and involves a range of different agendas and, at times, is not the most grounded in reality. Which is not to say that everything is rosy and there has been no evidence of dubious practices in some cases, but rather that reporting and narratives have to be engaged with critically.
A common criticism of OPMs in the US is that they aggressively target marginalised groups. However, this needs to be considered in the context of the fact that online provision is largely aimed at a different audience and demographic than those traditionally served by many universities. It is therefore unsurprising that marketing efforts focus on groups for whom higher education has not historically been a priority. This does not inherently mean the targeting is exploitative.
A related point is that marketing and recruitment practices will inevitably differ for a different audience and when conducted by a commercial organisation. It is often the combination of these two things, along with the fact that the OPM marketing and recruitment playbook can be radically different from traditional university approaches, that can cause unease, irrespective of whether there are signs of anything dubious.
I sometimes wonder whether what is described as aggressive is simply different, more proactive, unfamiliar, and therefore uncomfortable for many in the sector. The idea of lead capture forms, gated course information, customer relationship management (CRM) systems, email automations, sales cadences, phone calls to potential applicants, and teams of student recruitment advisors or agents is alien to many in higher education.
This is partly a matter of personal and professional experience, as well as how modern and up-to-date the sector is overall. None of these practices are particularly new or remarkable, but if your frame of reference for university marketing and recruitment is glossy printed prospectuses, open days, and UCAS applications, this approach will feel very different.
There is certainly a delicate balance between the commercial incentives to recruit, particularly given their recruitment advisors often receive commission per enrolment, and ensuring that students’ needs and suitability for the programme are properly considered. Through mystery shopping, I have encountered poor practices from OPM recruitment advisors but also seen examples of customer service that would put some universities to shame.
It is important to avoid generalisations or assuming that the profit motive inherently leads to unethical marketing and recruitment. Ultimately, every OPM should recognise that if they do not uphold professional and ethical recruitment practices, they will suffer in the long run. Poor practices erode trust with university partners, and lower continuation and retention rates will likely follow. Do a bad job here, and your partnerships will be on the road to ruin.
The future of OPM partnerships and regulation
The extent to which OPM relationships are truly within the scope of increased scrutiny and regulatory changes for franchise provision remains unclear. Although there is a close relationship between franchised provision and OPM partnerships, it does not appear that the latter has been the driving force behind the major concerns that have led to greater scrutiny.
If the proposed requirement for OfS registration goes ahead, it will be interesting to see whether OPM companies will be expected to register. Several have considered this even before the scrutiny of franchising emerged, and one is already registered. If companies are effectively compelled to register, the associated costs and increased regulatory burden are unlikely to be welcomed.
It will also be worth observing whether the fact that OPMs are almost exclusively focused on postgraduate students leads to some deliberate or tacit exemption from this requirement. If that happens, it could deter OPMs from moving into online undergraduate provision in the future, a market they have generally lacked confidence in anyway.
Companies may not thank me for saying this, but if you are in essence a higher education provider, whether deliberately or de facto, it makes sense to be registered with the OfS. For OPMs, this would provide greater transparency, something they have also been criticised for.
One last thing that’s worth remembering in all of this, is the risk of throwing stones in glasshouses. One of the main reasons both franchise and OPM partnerships exist is that universities want to generate income by reaching a different type of audience. Some of these providers and companies are, in a way, the progeny of universities, born out of institutions’ unwillingness to seriously invest in and broaden their own efforts to reach these audiences.
There is an interdependence that is only likely to deepen as universities seek to diversify income streams in an increasingly challenging financial environment. If the sector wants to take a more nuanced view of these partnerships, it must move beyond the moral asymmetry and the tendency to cast private providers as convenient villains. But if this is really a battle between principle and profit, UK higher education might need to ask itself how far removed it truly is from the profit motive and what stops it from reaching these audiences without relying on external partners.
