70% of Online Program Managers Deploy AI, But Market Remains Stalled
Seven out of ten online program management companies are now using artificial intelligence to support instructors and students through tutoring, coaching, and content creation. But skeptics question whether the technology can reverse years of declining revenue and reputational damage in a sector that once promised to transform higher education.
Companies including Coursera, 2U, and iDesign have rolled out AI-powered features for curriculum mapping and instructional design. Yet the broader market faces structural problems that AI alone won't solve.
The OPM Brand Problem
Online program managers were once a popular way for universities to enter the online education market. Over time, they drew lawsuits and criticism for predatory practices, including inflating program rankings and driving up tuition costs.
The fallout has been severe. New OPM partnerships dropped from 141 in 2021 to 73 in 2024-the lowest level since 2016. More colleges are building their own online systems rather than outsourcing to third-party providers.
Federal scrutiny has intensified. In January 2025, the Education Department released guidance allowing colleges to lose federal financial aid access if their contractors provide "false, misleading, or inaccurate information" to students. Minnesota and Ohio have enacted OPM regulations, while California, Florida, Massachusetts, and New Jersey have proposed legislation.
Financial Distress and Private Equity
The decline in partnerships has pushed OPMs toward private equity ownership. Wiley and Pearson sold their OPM divisions in 2023. Keypath was acquired by private equity in 2024. That same year, 2U filed for bankruptcy, shed $500 million in debt, and emerged as a private company.
Projected OPM revenues of $8.25 billion by 2025 never materialized. Last year's actual revenues were closer to $3 billion.
Private equity investors shouldn't expect quick returns from AI rollouts. The market has stopped growing, and efficiency gains from automation may make it easier for universities to handle these functions themselves rather than hire OPMs.
Unbundling and Service Models Shift
The traditional model-where colleges purchased large service bundles and split profits with OPMs-is fading. Instead, 58 percent of new partnerships in 2024 used a fee-for-service approach, with colleges paying OPMs à la carte for counseling, enrollment, and marketing.
AI could reduce the cost of providing these services by an estimated 40 percent, according to market forecasts. But that same automation could enable universities to offer equivalent services on their own, further eroding OPM demand.
AI Certificates as a Growth Bet
Some OPMs are betting on AI and machine learning certificates as their next growth driver. Between 2019 and 2024, AI/ML certificate enrollment grew 23 percent while MBA enrollment dipped 5 percent. In 2024, 2.8 million students earned AI-related nondegree credentials compared to 275,000 MBA students.
Yet certificates remain an uncertain revenue source. They cost more to market and generate less revenue per student than degree programs. Multiple providers already operate in the AI upskilling space, and few OPMs have proven they can make money from certificates at scale.
The Innovation Gap
OPMs face pressure to differentiate themselves as AI-enabled services proliferate across the education sector. Learning management systems, standalone AI providers, and other vendors now offer competing products, blurring the lines around what OPMs uniquely provide.
The risk is that private equity ownership and margin pressure push OPMs toward cost-cutting automation rather than genuine service innovation. Real opportunity exists-colleges need partners to navigate AI adoption-but the sector has shown little appetite for bold new approaches.
For education professionals evaluating OPM partnerships, the calculus hasn't changed. AI features may improve efficiency. They won't solve the fundamental questions about whether outsourcing online education makes sense for your institution.
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