Will AI Help Revive the “Stale” OPM Market?

Like most sectors, online program management companies are finding their footing in the wake of artificial intelligence’s shake-up of work and learning.

Over the past few years, OPMs—including Coursera, iDesign and 2U—have adopted AI-powered features designed to enhance support for instructors and students through coaching, content creation, tutoring and curriculum mapping. According to an April analysis, 70 percent of OPMs are now deploying AI for such purposes.

But experts are skeptical that the AI boom will have a big payoff for the beleaguered OPM market, which is attempting to rebound with the help of private equity after years of declining revenues, reputational damage and mounting government scrutiny.

“I don’t see AI enabling growth. I see it being complementary,” said Chris Gardiner, a senior analyst at the research and consulting firm Eduventures. “It will be part of how they adapt and reshape what they do with improvements to supports and instructional design, but those are going to be on the efficiency side. It doesn’t change the calculus for institutions evaluating an OPM partnership.”

Brand and Money Problems

What has changed, however, is the optics of those partnerships over the last few years, which Gardiner said has created an “OPM brand problem.” And it’s unclear whether embracing AI can help with that.

Once a popular option to help universities break into the online education market and compete with for-profit institutions, OPMs drew criticism—and litigation—as they expanded. Some students and education advocates accused them of predatory practices, including driving up the price of online programs.

In 2022, former students from the University of Southern California filed a now-dismissed class action lawsuit against 2U—which was one of the first OPMs when it launched in 2008—alleging that it inflated program rankings to boost enrollment. In 2024, a student legal advocacy group sued the University of Maryland Global Campus, arguing that the revenue-sharing model the university has with Coursera violates federal law. And the week before former president Joe Biden left office in January 2025, the Education Department released guidance that said colleges could lose access to federal financial aid for any “false, misleading, or inaccurate information” that their contractors provide to students.

Although the Trump administration is unlikely to enforce that guidance, Minnesota and Ohio have enacted their own laws regulating OPMs, while lawmakers in California, Florida, Massachusetts and New Jersey have proposed similar legislation.

In the aftermath, more colleges are opting to stand up their own online learning systems without the help of OPMs. The number of new OPM partnerships fell from a peak of 141 in 2021 to 73 in 2024—the lowest numbers since 2016. “Now institutions that can do it themselves are building it. Institutions that can get out of OPM partnerships are likely trying to figure it out,” Gardiner said. “And the ones that still need [outside support] are still going to partner with OPMs.”

The decline in partnerships has caused financial distress for OPMs, including several that are now in the hands of private equity. In 2023, both Wiley and Pearson sold their OPM arms to private equity firms. In 2024, another private equity firm bought Keypath. That same year, 2U filed for bankruptcy, shed $500 million in debt and has since re-emerged as a private company.

Those firms shouldn’t expect that rolling out AI-enabled products will bring in big returns anytime soon. “Private equity loves growth markets, and the OPM market isn’t like that anymore,” Gardiner said. “The market is stale.” Once projected to bring in $8.25 billion by 2025, actual OPM revenues last year were closer to $3 billion.

Efficiency or Innovation?

Though OPMs will likely never return to their heyday, Gardiner believes there is still an opportunity for these third-party providers to “adapt and change the way they are seen” and “evolve past being a marketing agency plus a call center.”

AI could help with that, so long as OPMs use it to “widen their services and support more types of students and modalities—such as focusing more on hybrid and campus-based support,” he said. They should “leave instructional design to institutions and do more things that institutions aren’t as good at.”

But developing truly innovative products and approaches in the age of AI may not be so easy for OPMs, “given the increased private equity ownership across the sector, combined with growing competition and margin pressure,” said Neil Mosley, an education-technology consultant based in the United Kingdom.

“One of the risks with AI is that it encourages reductionist thinking. Instead of asking broader and more useful questions like how we create a compelling student experience or how we better support student success and progress, we can too easily default to narrower questions about where we can utilise AI in these areas,” he wrote in an email to Inside Higher Ed. “I suspect much of the AI implementation will be driven primarily by efficiency and cost reduction rather than genuine service enhancement.”

But the ubiquity of AI-enabled products will also put more pressure on OPMs to distinguish their services in the broader online education market.

“There were semi-clearly defined lines around what OPMs did and their value proposition for institutions,” said Brady Colby, head of market research at Validated Insights, which tracks the OPM market. “But now institutions will be able to think of those particular services or functions in terms of AI offerings that might be coming from an OPM, an LMS or a different provider. It definitely introduces a lot more competition for OPMs.”

That increased competition comes amid another trend in the OPM market: unbundling. Instead of purchasing big service bundles and splitting the profits with OPMs—which was the prevailing business model for years—more colleges are paying OPMs à la carte for specific services, including counseling, enrollment and marketing. The fee-for-service model is now dominant, constituting 58 percent of new partnerships established in 2024.

“OPMs are still unbundling along those lines, but now it’s about incorporating AI to facilitate a specific function,” Colby said. The proposition from OPMs will be “How can we help you enable automation to do prospective student outreach? How can we help you utilize AI to do academic counseling, improve student outcomes or find jobs for graduates?”

AI may make offering those types of services cheaper than ever for OPMs, according to a market forecast Colby generated using an AI-powered prediction and simulation engine called MiroFish. The resulting report, released last month, predicted that AI-enabled personalization services have the potential to reduce an OPM’s cost for providing services to each student by an estimated 40 percent.

While such cost savings may appeal to the profit-minded private equity firms running OPMs right now, automation may also make it easier for universities to offer similar services—such as instructional design and course creation—on their own.

“That would be a pretty big hit to the OPM market, especially for those that were really leaning into instructional design services,” Colby said.

AI Certificates as ‘Cash Cow’?

Validated Insights’ forecast also predicted a 60 percent probability that the OPM market will see an annual growth rate of 14 percent—reaching $5.5 billion by 2030. (Four other experts Inside Higher Ed interviewed said they don’t expect the market to grow to anywhere near that size, if at all.) Those gains, the report suggested, could be driven in part by increasingly popular AI and machine learning certificates surpassing M.B.A.s as the OPM “cash cow.”

Between 2019 and 2024, the M.B.A. market dipped about 5 percent, while AI/ML certificate programs grew by 23 percent. In 2024, 275,000 students were enrolled in M.B.A.s, compared to 2.8 million earning nondegree credentials in AI. The predictions Colby ran suggest that by 2029, the maximum potential revenue for AI/ML certificates could stand around $15 million, compared to just $1.1 million for M.B.A. programs.

“The M.B.A. space has gone stagnant. So, OPMs are in this period of trying to figure out where the next growth opportunity is within online higher education, ” Colby said.

AI and machine learning certificates may present them with just such an opportunity. “There’s a lot more people interested in some form of nondegree upskilling in AI than there are people interested in getting an M.B.A.”

But Colby acknowledged that certificates are far from a sure bet for OPMs, in part because they’re costly to market and result in less revenue per student. “There’s also a whole suite of other providers that are already active and carving out their moats in the AI upskilling space,” he said.

Phil Hill, an education-technology market analyst, told Inside Higher Ed that he hasn’t seen much evidence to support the prediction that AI and machine learning certificates have “cash cow” potential for OPMs.

“Certificates have never come through as a moneymaker for schools, whether it’s through an OPM or another method. Then the question is, does AI change things?” he said. “When I look around, there’s just a handful making money [on AI certificates] but it’s not an industrywide trend.”

Nonetheless, Hill said, the rise of AI does present OPMs with other new opportunities—if they seize them.

“There is a demand for partners to help schools figure out the new world of AI,” Hill said. “But we’re not seeing enough innovation to figure out what’s really needed. It’s a fairly stale market in transition, and we need bolder approaches.”