A recent WBEZ investigation revealed that the University of Illinois (UIC and UIS campuses) contracted with a private company, Risepoint, paying per-student commissions — sometimes as high as 50% of tuition revenue — in exchange for recruiting and assisting students into online programs. 

Formerly known as Academic Partnerships, Risepoint is the largest and one of the original players in the online program management (OPM) industry, making this case especially significant for what it signals about the risks of revenue-share models in public higher education. 

On paper, the universities defend this as a way to acquire the marketing, student-acquisition, and scale capabilities they lack internally. But digging beneath the surface shows why such arrangements are fundamentally fraught with conflicts of interest and why MF Digital rejects that model outright.

Let’s break down why this “revenue share per student” model is a lose-lose.

1. Misaligned incentives: quantity over quality

When a firm is paid based on how many students it enrolls, its only lever for increasing revenue is volume. That creates a natural tension:

• The recruiting partner is incentivized to push enrollment at almost any cost, including targeting students who may struggle academically or financially.
• They may overpromise, spin job prospects, gloss over risks, or downplay challenges, all to increase enrollment volume.
• Because they aren’t penalized for student attrition or poor outcomes (unless explicitly stated in penalty clauses), their incentives aren’t aligned with long-term student success.

As the WBEZ story notes, critics argue the model resembles predatory practices by for-profit colleges. 

From the university’s side, they may believe they can impose admissions standards and oversight, but control is always limited. Once the contact point is externalized, students may not realize they are dealing with a third party whose goal is a sale, not necessarily student well-being.

2. Conflicts of interest, opacity, and trust erosion

Hidden identity/lack of transparency

In some contracts, Risepoint is allowed to use university branding and operate under the university’s name so students may believe they’re speaking directly with university representatives. 

But those recruiters are often sales-driven agents, not academic advisors. That opacity undermines trust; students don’t know whose interests they’re serving.

Conflicts at the governance level

The WBEZ article also raises serious governance red flags: A University of Illinois trustee is also a partner at the private equity firm that owns Risepoint, creating a potential conflict of interest. 

When decision-makers have financial ties to the enrollment vendor, the neutrality of oversight and due diligence is compromised.

3. Risk transfer and financial fragility for universities

By outsourcing student acquisition under a revenue-share model, a university turns what should be a strategic, fixed investment in marketing, admissions staffing, and digital infrastructure into an open-ended operational cost that scales with every student. Each new enrollment increases the partner’s revenue share, locking the university into a compounding expense that erodes margin over time.

As the WBEZ article notes, one administrator defended the arrangement by admitting, “This is new to us. We don’t know where those markets are. We don’t know where the students are. We don’t know how to best reach them. And we don’t know how to engage them in the recruitment process effectively. There’s a reason we’re paying what we’re paying them.”

That candid statement reveals the short-term thinking these firms rely on. Under pressure to deliver growth, administrators often fear the upfront cost of building internal marketing capability. Without the experience to evaluate third-party fee-for-service providers, they default to an arrangement that feels easier in the moment but costs far more over time.

The result is a classic case of deferred risk. Once enrollment levels off, the university is left with diminished control, lower returns, and a contract that’s difficult to unwind. The annual loss in tuition revenue far outpaces what a well-run fee-for-service model would have cost —often by millions of dollars —and what remains is a lower-quality, externally controlled product.

Should the vendor fail or should incentives lead to questionable recruiting practices, the university’s brand, credibility, and liability take the hit. The partner walks away with profit; the institution is left to manage the fallout.

4. Short-term and long-term harm to students

Mis-matched students and academic struggles

The pressure to enroll aggressively may lead to admitting students who are a poor fit for the program. Some may struggle with the academic rigor or time demands, which can increase dropout or non-completion rates.

Debt burden with limited returns

If students borrow or pay significant tuition but struggle to finish or convert their credentials into meaningful employment, they’re worse off: higher debt, lower returns.

Erosion of trust in higher education

When students later learn that a third party with sales targets recruited them, it degrades trust in the institution. Worse, discovering misleading claims or poor outcomes can lead to claims of misrepresentation or deceptive marketing.

5. Regulatory and reputational exposure

This sort of incentive model was once expressly banned for institutions receiving federal aid: schools cannot pay recruiters commissions, bonuses, or per-student incentives. 

As a result, critics now argue that these third-party “online program managers” (OPMs) are exploiting a regulatory loophole by providing “other services” beyond recruitment, thereby enabling revenue-sharing arrangements. 

Legislative efforts in states like Minnesota have sought to prohibit public colleges from paying OPMs through tuition-share models and to require transparency. 

Universities that do this expose themselves to legal scrutiny, consumer protection investigations, and reputational backlash, especially since the public expects nonprofit and public institutions to operate in students’ interests, not under commercial pressures.

6. What MF Digital advocates instead

Given all the downsides, here’s how a stronger approach looks:

1. Fee-for-service or flat contract models
2. Pay the partner based on tasks (marketing, lead generation, technical support) rather than per enrolled student. That aligns incentives toward service delivery rather than enrollment volume.
3. Performance KPIs tied to outcomes, not volume
4. If incentives are used, tie them to retention, progression, student satisfaction, and completion rates, not just new enrollments and headcount.
5. Transparent, co-branded, or dual-identity models
6. If a third party is involved, the student should always know who is handling what: no disguising sales agents as university advisors.
7. Build internal capacity over time.
8. Use external partners as accelerators or trainers, but aim to internalize recruitment, marketing, and student support functions. Universities that retain control of the core student relationship reduce long-term external dependency.
9. Data sharing, audit rights, governance safeguards
10. Contracts must allow the university to oversee and audit claims, leads, and outcomes. Governance must be free of conflicts. Before signing, carefully stress-test worst-case outcomes.

Conclusion

At first glance, the “pay per student” enrollment model may seem like a way for universities to outsource risk and get scalable enrollment help. But in reality, it introduces perverse incentives, conflicts of interest, opacity, and risk to both the institution and its students.

MF Digital’s philosophy rejects this model not out of idealism but pragmatism. When your core mission is aligned to deliver meaningful outcomes to students and sustain the brand and integrity of the university, you cannot afford downstream misalignment in the student acquisition process.