May 8, 2023 • 20 mins
In this episode I interview Clare McCann, Higher Education Policy Fellow at Arnold Ventures. Clare and I discuss the challenges in crafting Federal higher education policy and the need to create clearer guardrails to rein in the kinds predatory practices that concern policy makers about the OPM industry.
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Episode Transcript
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Eloy (00:09):
I'm Ilo Ortiz Oakley, and welcome back to the Rant, the
podcast where we get behind thecurtain and break down the
people, the policies in thepolitics of our higher education
system.
In this episode, we talk moreabout the recent Department of
Education changes to the DearColleague Letter addressing
revenue share agreements andonline program program
(00:29):
management companies, otherwiseknown as OPMs.
We'll also get into the expandeddefinition of a third party
servicer, and today I'm joinedby a friend and well-known
policy expert in higher edClaire McCann.
Claire is currently a highereducation fellow at Arnold
Ventures.
Welcome to the podcast, Claire.
Clare (00:51):
Thanks so much.
For having me.
Eloy (00:54):
All right, well let's jump right into some of these
questions cuz I I know how muchtime you spend thinking about
these issues and it's importantthat we do think about these
issues because.
Given the ever-changinglandscape of technology in
higher education, I think it'salways a challenge for the
federal government to keep upwith those changes.
So let me ask you let's firststart with where you're at now.
(01:17):
So you recently joined ArnoldVentures after serving in the
Biden administration and theDepartment of Education,
specifically in the office ofthe Undersecretary.
Tell our listeners about yournew role.
And tell us a little bit aboutwhat Arnold Ventures does.
Clare (01:34):
Yeah.
Well I was very excited to joinArnold Ventures last year.
AB is a philanthropy that'sdedicated to tackling some of
the most pressing problems inthe US and that includes higher
education.
So Arnold Ventures has reallyapproached higher education from
a consumer protectionperspective.
First.
Seeking to end predatorybehavior in higher education
(01:58):
and, and increase the return oninvestment that students and
taxpayers are getting out of thesystem.
And that agenda has lots ofalignment with my own career and
my own work over the lastdecade, which has largely
focused on how we can improveoutcomes and increase
accountability in highereducation.
So in this role, I'm working alittle bit independently of the
(02:19):
philanthropic mission, a littlebit independently of the grant
making work.
I'm a fellow.
I'm doing research and policyadvocacy work for the
organization, and it's, it'sgiven me a, a great way to work
with some of the greatorganizations in our field and,
and engage on some of theseimportant higher education
issues.
Eloy (02:40):
That's great.
And I know Arnold Ventures hasbeen very much involved in a lot
of these conversations.
We very much appreciate theirrole in higher education as you
said, not only as, as a funder,but also as a thought leader on
some of these very importantissues.
Now you yourself, you've servedin two different
(03:01):
administrations.
I had the great pleasure ofserving alongside you at the
Department of Education at thestart of the Biden
administration.
So, you know, just how difficultit is to draft federal policy
and balance all of the competingconstituencies, which there are
many in this space.
(03:21):
What do you believe are some ofthe issues that led to.
The department's pushed torevise the dear colleague
letter, otherwise known as thedcl.
And about the expandeddefinition of third party
servicer, how, how do you thinkthey got to this point?
Clare (03:40):
Well, you're absolutely right.
It is not easy to draft federalpolicy.
We both know that really well.
In this case, I think thedepartment acknowledged their
impetus for.
Going back and taking anotherlook at the third party servicer
Guidance was a GAO report thatcame out almost a year ago now.
And that report said that thedepartment really needed to
(04:02):
develop a stronger approach tohow it was monitoring college's
arrangements with these onlineprogram management companies,
OPMs.
And so basically GAO looked intoOPMs found.
This is a really fast growingindustry.
Hundreds of colleges offeringthousands of programs with OPMs.
(04:22):
And those OPMs are very oftenproviding the same kinds of
services that on behalf ofschools that are subject to the
incentive compensation ban,which has been in the Higher
Education Act since the earlynineties.
So that includes studentrecruitment and, and retention
work.
GAO pointed out, you know, theeducation department assesses.
(04:46):
Compliance with the incentivecompensation ban through annual
compliance audits of schools.
But in cases where schools haveoutsourced those core activities
to another entity like an opm,it's not really generally
getting those compliance audits.
Most schools aren't reportingthe entities that they're
(05:06):
outsourcing those services to.
So, you know, GAO talked to someof the auditors that do these
annual compliance audits.
They said they'd never been toldby one of their institutions
that they had an OPMarrangement, even though GAO
could easily confer from publicinformation, they do.
So the GAO really faulted theeducation department for this.
(05:28):
They said the department isn'tdoing enough.
To make clear to colleges thatthey should be reporting their
OPM arrangements and subsubjecting those contracts with
OPMs to Department of Educationoversight.
So the department said, whenthis came out about a year ago,
the department said, yeah, weagree.
We're gonna take steps toimprove that guidance.
(05:50):
And so that brings us to theguidance that came out which the
guidance has always provided a,a list, a non-exhaustive list of
the types of services thatqualify an entity as a third
party servicer.
So in the new guidance, thedepartment has added some of the
core functions that OPMs areperforming, namely recruitment,
(06:12):
retention, the provision ofinstruction.
Those all got added to that listof examples.
The department, you know,acknowledges they have said how
hard it is to write guidancearound a gap in the rules.
So as a policy maker, right, thechallenge is knowing what you
don't know.
And the TPS regulations inparticular are very challenging
(06:35):
for the field to understandbecause it's really fact
specific.
It really depends on thecircumstances of each servicer
and each institution.
So they've built lots ofstakeholder feedback
opportunities into this process.
They've extended the effectivedate of the new guidance and the
comment deadline, and I thinkthey're gonna carefully consider
(06:56):
what they hear from the industryand from advocates to make any
additional adjustments that theyneed to make.
Eloy (07:04):
So part of this is at the core, it's an issue of
transparency for Title fourinstitutions, the public policy
makers, being aware of what kindof contracts they're entering
into and, and what parts oftheir Title four obligation they
may be.
Contracting for somebody elseto, to carry out.
Is that a, a, a fair statement?
Clare (07:26):
Yeah, Absolutely.
Absolutely.
Eloy (07:28):
so for our listeners Claire, I think when most people
think about third party service,or the first thing that comes to
mind is particularly if theyhave a student loan, is their
student loan servicer are there.
Other types of third partyservicers that have been part of
the definition to date, or isthat accurate to say that when
(07:50):
most people think about it,they're thinking about a student
loan servicer?
Clare (07:55):
That is probably what most borrowers think of.
I think for an institution, athird party servicer is really
any entity that is performing acore Title four function.
So a lot of times this has beenwhere an institution is
contracting.
With another entity to help withthings like verification or
(08:16):
FAFSA processing, kind of someof the, the mechanics behind
this.
It can be a pretty extensiveuniverse.
You know, I think we've seen anincrease in institutions
outsourcing a lot of theirservices and, and these Title
four functions kind of carrythrough from the institution to
the entities that they'recontracting with for that.
Eloy (08:36):
Right.
So let's talk a little bit moreabout some of the.
Issues that you brought up,specifically these predatory
practices.
You mentioned them in your workwith Arnold Ventures.
You mentioned them in the workaround the concerns about OPMs
and, and you've served invarious policy roles, including
as a senior policy advisor inthe Obama Department of
(09:00):
Education and as a DeputyDirector of Federal Higher
Education Policy at New America.
So you've been examining thislandscape for quite some time.
During these years there's beenquite a bit of fluctuation in
the for-profit, higher educationsector.
How, how would you characterizethe for-profit sector today and
(09:22):
what concerns do you have todaythat may be different than the
concerns that were raised duringearly Obama administration
years?
Clare (09:31):
I would say the, the for-profit sector today is.
Is a lot messier than it was adecade ago.
You know, when I, when I joinedthe Obama administration, I
joined right between thecollapses of Corinthian colleges
and I t t Tech.
So there were, at the time,there was lots of energy being
expended on understanding theactions of for-profit colleges
(09:55):
and the risks that they werepresenting to students, both in
the ways they operated and inthe ways they closed.
Eloy (10:01):
Mm-hmm.
Clare (10:02):
And one of the big tasks that we undertook at that point
was establishing a borrowerdefense process, really building
the plane as we were flying itby trying to process claims
under the old regulations, whichhad hardly been used, and were
really clunky for thosepurposes, while also remaking
that process through the newregulations to today.
(10:26):
I would say, and this is I thinka really great question to think
about what's.
Different over the last 10years.
But I do think the for-profitindustry today looks very
different.
So for starters, it's a lotsmaller than it was.
Obviously for-profit collegeenrollment peaked during the
great recession.
(10:46):
It was smaller by 2015.
When I started at ed during theObama administration, it was
maybe 1.6 million students orso.
It's even smaller now.
Closer to 1.3 million.
And increasingly the industry isnot just in for-profit colleges.
It used to be a lot easier tofind for-profits.
(11:08):
So we've seen public andnonprofit colleges starting to
acquire for-profit colleges, sotrying to convert them away from
for-profit status.
But often we see them keepingthe school largely the way it
was before the acquisition.
It's kind of separate entity,but related.
To the public or nonprofit.
(11:29):
We have also seen, relevant tothis issue, we've seen public
and nonprofit colleges that arebuilding out new programs that
they outsource to for-profitentities, like online program
management companies.
So it's a lot harder today Ithink, for policy makers who are
concerned about consumerprotection issues.
(11:50):
To identify the kinds of tacticsthat were so common among the
most notorious for-profitcolleges.
Because they're not concentratedall in the same schools anymore.
It's much, much more diffuse.
Eloy (12:02):
When you thought about the for-profit industry, you thought
about a half dozen or dozen orso institutions that we all knew
about, these are for-profithigher education institutions
you know, the University ofPhoenix's of the world.
Now, most of those have eithershrunk or have gone away, and
now you see.
Different parts of the functionsof a higher education
(12:26):
institution becoming outsourcedto for-profits there's this
argument out there that manypublics don't have the core
capacity to offer onlinecontent, and so they.
Contract it out or otherwiseacquire it.
Do you see that that functionshould go away, or do you just
(12:48):
see it as, should be moretransparent in the kinds of
transactions that are happening,be between public non-profits
and for-profit entities?
Clare (12:58):
I think online education is not going anywhere.
Right?
Certainly during the pandemicthat became extremely clear.
I think my concern is withinstitutions that are
approaching it in, in the wrongway where maybe it's.
Less of an authentic commitmentto developing.
(13:19):
Expertise in how to offer onlineeducation effectively and how to
make sure students are wellserved and more, more of a rush
to build out online enrollment,maybe as a, you know, a cash cow
for the institution or or tootherwise kind of compete with
on bigger online institutions.
(13:40):
And so I think, I think that'sthe real question here is are
institutions.
Willing to approach onlineeducation, not just as an end in
and of itself, but, but as areal commitment to serving
students well and making surethey're doing that responsibly
is a really important part ofthat.
Eloy (14:03):
I've heard from many of my colleagues.
You know, part of the, thechallenge right now is just an
awareness of what.
The department is trying to dohow would you respond to critics
of the expanded definition of athird party servicers proposed
currently?
Who say that the, the languagegoes too far, that it sweeps up.
(14:25):
Too many types of contracts ininstitutions creates a burden on
institutions to report all thesecontracts and has some
significant unintendedconsequences that they feel
would undermine innovation inhigher education.
You,
Clare (14:40):
I think what the department's trying to do here
is really make sure thatinnovation is happening
responsibly.
It's, there can be human coststo innovation and, and the
department's job is to protectstudents and taxpayers.
From those potential downsiderisks.
You know, I think there's agrowing sentiment among experts
(15:01):
and advocates that what we'reseeing in OPMs at public and
nonprofit colleges is startingto look a lot like the problems
that led Congress and theeducation department to crack
down on for-profit colleges inthe past.
So Stu, we still see studentsand taxpayers bearing the cost
of past wrongdoing.
(15:22):
You know, they've got studentloans that they're trying to
seek discharge through borrowerdefense, for instance.
They, lots of borrowers outthere who hold degrees that
didn't pay off for them.
I think, you know, it would be areal mistake for the education
department to let that happenagain by allowing for-profit
entities that are working inhundreds of colleges across the
(15:44):
country to just operate outsideof the law without, without any
oversight.
And that's really what thisupdated guidance would do.
It doesn't mean thatinstitutions can't work with
OPMs or outsource some of theircore Title four functions to
outside contractors.
That's still absolutelysomething they are permitted to
(16:04):
do, but it brings those partnersof institutions into the fold of
Title four oversight.
I think that's what Congressintended when it wrote the third
party servicer law.
That's what the GAO recommendedlast year.
And you know, of course I willbe the first to say the
oversight we do of collegesalready is not enough to protect
(16:28):
students.
But we do at least have somebaseline requirements for
colleges that are gettingfederal money.
Instead, a lot of these thirdparty servicers are getting
millions of federal dollars.
They're getting it through thosecolleges and no one's checking
to make sure they're followingthe rules so that the new
guidance would fix that, what Iwould call a, a glaring hole in
(16:51):
federal oversight.
Eloy (16:52):
Right.
As I hear from my colleagues andI'm sure you can appreciate this
because you know, you were inthe Obama administration.
You took a break in between thatother administration that came
in and then you came in with theBiden administration.
I hear from my colleagues thatit would be nice if we had some
(17:14):
consistency that we keep goingto the extremes.
We went to one extreme in theObama administration.
We went to another extreme inthe Trump administration, and
now they're getting.
Push back and, and I'm sure thisis true on a lot of things,
title ix, any of a number ofissues.
What would you say to mycolleagues who, who run higher
(17:36):
education institutions, howshould they deal with this kind
of extreme policy shifts thatcome from different
administrations?
Clare (17:45):
Know, I absolutely agree.
The ideal situation is to have.
More stability and moreconsistency in, in all of these
rules.
I think the challenge there isyou know, we, we don't have a
congress that's very functionalright now.
I, I personally have not seen alot of me, a lot of
(18:06):
institutional leaders on thehill, you know, pushing for an h
e a reauthorization that willtackle some of these consumer
protection issues.
It's a, a system that's workingpretty well for people and they
they like it the way it is, andso here we are.
To the extent Congress iswilling to tackle some of these
(18:27):
issues, I think, you know,dealing with consumer protection
questions in legislation wouldgive institutions.
Certainly a lot more a lot moresecurity, a lot more stability.
But at the same time, consumerprotection isn't gonna hold off
until then.
(18:47):
It's students who are the oneswe need to be thinking about in
the meantime.
Eloy (18:51):
Well on that last point centering policy practice
funding.
All should be centered on thestudent, the learner.
So I appreciate that lastcomment that you made.
Well, listen, Claire I reallyappreciate you taking some time
and, and joining me in thisconversation.
I think it's an importantconversation for people from all
(19:15):
backgrounds in higher educationto better understand.
I think these questions thathave been raised by the
department, these changes thathave been proposed to better
protect.
Learners are, are an importantdiscussion that I think most
people really haven't thoughtabout.
So I think it's a great time to,to open up this topic.
So I really appreciate youspending some time with me,
(19:35):
sharing your expertise and, andsharing your thoughts.
So thanks for joining me.
Clare (19:40):
Yeah.
I appreciate it.
Good to see you.
Eloy (19:42):
All right, well, thanks everyone for joining me on the
rant.
If you enjoyed this episode asmuch as I did, hit the like
button leave me your comments tohear more episodes.
Please subscribe to the channeland follow us on your favorite
podcast platform.
Take care, everybody, and we'llsee you soon on the rant.
I'm Ilo Ortiz Oakley, and welcome back to the Rant, the
podcast where we get behind thecurtain and break down the
people, the policies in thepolitics of our higher education
system.
In this episode, we talk moreabout the recent Department of
Education changes to the DearColleague Letter addressing
revenue share agreements andonline program program
(00:29):
management companies, otherwiseknown as OPMs.
We'll also get into the expandeddefinition of a third party
servicer, and today I'm joinedby a friend and well-known
policy expert in higher edClaire McCann.
Claire is currently a highereducation fellow at Arnold
Ventures.
Welcome to the podcast, Claire.
Clare (00:51):
Thanks so much.
For having me.
Eloy (00:54):
All right, well let's jump right into some of these
questions cuz I I know how muchtime you spend thinking about
these issues and it's importantthat we do think about these
issues because.
Given the ever-changinglandscape of technology in
higher education, I think it'salways a challenge for the
federal government to keep upwith those changes.
So let me ask you let's firststart with where you're at now.
(01:17):
So you recently joined ArnoldVentures after serving in the
Biden administration and theDepartment of Education,
specifically in the office ofthe Undersecretary.
Tell our listeners about yournew role.
And tell us a little bit aboutwhat Arnold Ventures does.
Clare (01:34):
Yeah.
Well I was very excited to joinArnold Ventures last year.
AB is a philanthropy that'sdedicated to tackling some of
the most pressing problems inthe US and that includes higher
education.
So Arnold Ventures has reallyapproached higher education from
a consumer protectionperspective.
First.
Seeking to end predatorybehavior in higher education
(01:58):
and, and increase the return oninvestment that students and
taxpayers are getting out of thesystem.
And that agenda has lots ofalignment with my own career and
my own work over the lastdecade, which has largely
focused on how we can improveoutcomes and increase
accountability in highereducation.
So in this role, I'm working alittle bit independently of the
(02:19):
philanthropic mission, a littlebit independently of the grant
making work.
I'm a fellow.
I'm doing research and policyadvocacy work for the
organization, and it's, it'sgiven me a, a great way to work
with some of the greatorganizations in our field and,
and engage on some of theseimportant higher education
issues.
Eloy (02:40):
That's great.
And I know Arnold Ventures hasbeen very much involved in a lot
of these conversations.
We very much appreciate theirrole in higher education as you
said, not only as, as a funder,but also as a thought leader on
some of these very importantissues.
Now you yourself, you've servedin two different
(03:01):
administrations.
I had the great pleasure ofserving alongside you at the
Department of Education at thestart of the Biden
administration.
So, you know, just how difficultit is to draft federal policy
and balance all of the competingconstituencies, which there are
many in this space.
(03:21):
What do you believe are some ofthe issues that led to.
The department's pushed torevise the dear colleague
letter, otherwise known as thedcl.
And about the expandeddefinition of third party
servicer, how, how do you thinkthey got to this point?
Clare (03:40):
Well, you're absolutely right.
It is not easy to draft federalpolicy.
We both know that really well.
In this case, I think thedepartment acknowledged their
impetus for.
Going back and taking anotherlook at the third party servicer
Guidance was a GAO report thatcame out almost a year ago now.
And that report said that thedepartment really needed to
(04:02):
develop a stronger approach tohow it was monitoring college's
arrangements with these onlineprogram management companies,
OPMs.
And so basically GAO looked intoOPMs found.
This is a really fast growingindustry.
Hundreds of colleges offeringthousands of programs with OPMs.
(04:22):
And those OPMs are very oftenproviding the same kinds of
services that on behalf ofschools that are subject to the
incentive compensation ban,which has been in the Higher
Education Act since the earlynineties.
So that includes studentrecruitment and, and retention
work.
GAO pointed out, you know, theeducation department assesses.
(04:46):
Compliance with the incentivecompensation ban through annual
compliance audits of schools.
But in cases where schools haveoutsourced those core activities
to another entity like an opm,it's not really generally
getting those compliance audits.
Most schools aren't reportingthe entities that they're
(05:06):
outsourcing those services to.
So, you know, GAO talked to someof the auditors that do these
annual compliance audits.
They said they'd never been toldby one of their institutions
that they had an OPMarrangement, even though GAO
could easily confer from publicinformation, they do.
So the GAO really faulted theeducation department for this.
(05:28):
They said the department isn'tdoing enough.
To make clear to colleges thatthey should be reporting their
OPM arrangements and subsubjecting those contracts with
OPMs to Department of Educationoversight.
So the department said, whenthis came out about a year ago,
the department said, yeah, weagree.
We're gonna take steps toimprove that guidance.
(05:50):
And so that brings us to theguidance that came out which the
guidance has always provided a,a list, a non-exhaustive list of
the types of services thatqualify an entity as a third
party servicer.
So in the new guidance, thedepartment has added some of the
core functions that OPMs areperforming, namely recruitment,
(06:12):
retention, the provision ofinstruction.
Those all got added to that listof examples.
The department, you know,acknowledges they have said how
hard it is to write guidancearound a gap in the rules.
So as a policy maker, right, thechallenge is knowing what you
don't know.
And the TPS regulations inparticular are very challenging
(06:35):
for the field to understandbecause it's really fact
specific.
It really depends on thecircumstances of each servicer
and each institution.
So they've built lots ofstakeholder feedback
opportunities into this process.
They've extended the effectivedate of the new guidance and the
comment deadline, and I thinkthey're gonna carefully consider
(06:56):
what they hear from the industryand from advocates to make any
additional adjustments that theyneed to make.
Eloy (07:04):
So part of this is at the core, it's an issue of
transparency for Title fourinstitutions, the public policy
makers, being aware of what kindof contracts they're entering
into and, and what parts oftheir Title four obligation they
may be.
Contracting for somebody elseto, to carry out.
Is that a, a, a fair statement?
Clare (07:26):
Yeah, Absolutely.
Absolutely.
Eloy (07:28):
so for our listeners Claire, I think when most people
think about third party service,or the first thing that comes to
mind is particularly if theyhave a student loan, is their
student loan servicer are there.
Other types of third partyservicers that have been part of
the definition to date, or isthat accurate to say that when
(07:50):
most people think about it,they're thinking about a student
loan servicer?
Clare (07:55):
That is probably what most borrowers think of.
I think for an institution, athird party servicer is really
any entity that is performing acore Title four function.
So a lot of times this has beenwhere an institution is
contracting.
With another entity to help withthings like verification or
(08:16):
FAFSA processing, kind of someof the, the mechanics behind
this.
It can be a pretty extensiveuniverse.
You know, I think we've seen anincrease in institutions
outsourcing a lot of theirservices and, and these Title
four functions kind of carrythrough from the institution to
the entities that they'recontracting with for that.
Eloy (08:36):
Right.
So let's talk a little bit moreabout some of the.
Issues that you brought up,specifically these predatory
practices.
You mentioned them in your workwith Arnold Ventures.
You mentioned them in the workaround the concerns about OPMs
and, and you've served invarious policy roles, including
as a senior policy advisor inthe Obama Department of
(09:00):
Education and as a DeputyDirector of Federal Higher
Education Policy at New America.
So you've been examining thislandscape for quite some time.
During these years there's beenquite a bit of fluctuation in
the for-profit, higher educationsector.
How, how would you characterizethe for-profit sector today and
(09:22):
what concerns do you have todaythat may be different than the
concerns that were raised duringearly Obama administration
years?
Clare (09:31):
I would say the, the for-profit sector today is.
Is a lot messier than it was adecade ago.
You know, when I, when I joinedthe Obama administration, I
joined right between thecollapses of Corinthian colleges
and I t t Tech.
So there were, at the time,there was lots of energy being
expended on understanding theactions of for-profit colleges
(09:55):
and the risks that they werepresenting to students, both in
the ways they operated and inthe ways they closed.
Eloy (10:01):
Mm-hmm.
Clare (10:02):
And one of the big tasks that we undertook at that point
was establishing a borrowerdefense process, really building
the plane as we were flying itby trying to process claims
under the old regulations, whichhad hardly been used, and were
really clunky for thosepurposes, while also remaking
that process through the newregulations to today.
(10:26):
I would say, and this is I thinka really great question to think
about what's.
Different over the last 10years.
But I do think the for-profitindustry today looks very
different.
So for starters, it's a lotsmaller than it was.
Obviously for-profit collegeenrollment peaked during the
great recession.
(10:46):
It was smaller by 2015.
When I started at ed during theObama administration, it was
maybe 1.6 million students orso.
It's even smaller now.
Closer to 1.3 million.
And increasingly the industry isnot just in for-profit colleges.
It used to be a lot easier tofind for-profits.
(11:08):
So we've seen public andnonprofit colleges starting to
acquire for-profit colleges, sotrying to convert them away from
for-profit status.
But often we see them keepingthe school largely the way it
was before the acquisition.
It's kind of separate entity,but related.
To the public or nonprofit.
(11:29):
We have also seen, relevant tothis issue, we've seen public
and nonprofit colleges that arebuilding out new programs that
they outsource to for-profitentities, like online program
management companies.
So it's a lot harder today Ithink, for policy makers who are
concerned about consumerprotection issues.
(11:50):
To identify the kinds of tacticsthat were so common among the
most notorious for-profitcolleges.
Because they're not concentratedall in the same schools anymore.
It's much, much more diffuse.
Eloy (12:02):
When you thought about the for-profit industry, you thought
about a half dozen or dozen orso institutions that we all knew
about, these are for-profithigher education institutions
you know, the University ofPhoenix's of the world.
Now, most of those have eithershrunk or have gone away, and
now you see.
Different parts of the functionsof a higher education
(12:26):
institution becoming outsourcedto for-profits there's this
argument out there that manypublics don't have the core
capacity to offer onlinecontent, and so they.
Contract it out or otherwiseacquire it.
Do you see that that functionshould go away, or do you just
(12:48):
see it as, should be moretransparent in the kinds of
transactions that are happening,be between public non-profits
and for-profit entities?
Clare (12:58):
I think online education is not going anywhere.
Right?
Certainly during the pandemicthat became extremely clear.
I think my concern is withinstitutions that are
approaching it in, in the wrongway where maybe it's.
Less of an authentic commitmentto developing.
(13:19):
Expertise in how to offer onlineeducation effectively and how to
make sure students are wellserved and more, more of a rush
to build out online enrollment,maybe as a, you know, a cash cow
for the institution or or tootherwise kind of compete with
on bigger online institutions.
(13:40):
And so I think, I think that'sthe real question here is are
institutions.
Willing to approach onlineeducation, not just as an end in
and of itself, but, but as areal commitment to serving
students well and making surethey're doing that responsibly
is a really important part ofthat.
Eloy (14:03):
I've heard from many of my colleagues.
You know, part of the, thechallenge right now is just an
awareness of what.
The department is trying to dohow would you respond to critics
of the expanded definition of athird party servicers proposed
currently?
Who say that the, the languagegoes too far, that it sweeps up.
(14:25):
Too many types of contracts ininstitutions creates a burden on
institutions to report all thesecontracts and has some
significant unintendedconsequences that they feel
would undermine innovation inhigher education.
You,
Clare (14:40):
I think what the department's trying to do here
is really make sure thatinnovation is happening
responsibly.
It's, there can be human coststo innovation and, and the
department's job is to protectstudents and taxpayers.
From those potential downsiderisks.
You know, I think there's agrowing sentiment among experts
(15:01):
and advocates that what we'reseeing in OPMs at public and
nonprofit colleges is startingto look a lot like the problems
that led Congress and theeducation department to crack
down on for-profit colleges inthe past.
So Stu, we still see studentsand taxpayers bearing the cost
of past wrongdoing.
(15:22):
You know, they've got studentloans that they're trying to
seek discharge through borrowerdefense, for instance.
They, lots of borrowers outthere who hold degrees that
didn't pay off for them.
I think, you know, it would be areal mistake for the education
department to let that happenagain by allowing for-profit
entities that are working inhundreds of colleges across the
(15:44):
country to just operate outsideof the law without, without any
oversight.
And that's really what thisupdated guidance would do.
It doesn't mean thatinstitutions can't work with
OPMs or outsource some of theircore Title four functions to
outside contractors.
That's still absolutelysomething they are permitted to
(16:04):
do, but it brings those partnersof institutions into the fold of
Title four oversight.
I think that's what Congressintended when it wrote the third
party servicer law.
That's what the GAO recommendedlast year.
And you know, of course I willbe the first to say the
oversight we do of collegesalready is not enough to protect
(16:28):
students.
But we do at least have somebaseline requirements for
colleges that are gettingfederal money.
Instead, a lot of these thirdparty servicers are getting
millions of federal dollars.
They're getting it through thosecolleges and no one's checking
to make sure they're followingthe rules so that the new
guidance would fix that, what Iwould call a, a glaring hole in
(16:51):
federal oversight.
Eloy (16:52):
Right.
As I hear from my colleagues andI'm sure you can appreciate this
because you know, you were inthe Obama administration.
You took a break in between thatother administration that came
in and then you came in with theBiden administration.
I hear from my colleagues thatit would be nice if we had some
(17:14):
consistency that we keep goingto the extremes.
We went to one extreme in theObama administration.
We went to another extreme inthe Trump administration, and
now they're getting.
Push back and, and I'm sure thisis true on a lot of things,
title ix, any of a number ofissues.
What would you say to mycolleagues who, who run higher
(17:36):
education institutions, howshould they deal with this kind
of extreme policy shifts thatcome from different
administrations?
Clare (17:45):
Know, I absolutely agree.
The ideal situation is to have.
More stability and moreconsistency in, in all of these
rules.
I think the challenge there isyou know, we, we don't have a
congress that's very functionalright now.
I, I personally have not seen alot of me, a lot of
(18:06):
institutional leaders on thehill, you know, pushing for an h
e a reauthorization that willtackle some of these consumer
protection issues.
It's a, a system that's workingpretty well for people and they
they like it the way it is, andso here we are.
To the extent Congress iswilling to tackle some of these
(18:27):
issues, I think, you know,dealing with consumer protection
questions in legislation wouldgive institutions.
Certainly a lot more a lot moresecurity, a lot more stability.
But at the same time, consumerprotection isn't gonna hold off
until then.
(18:47):
It's students who are the oneswe need to be thinking about in
the meantime.
Eloy (18:51):
Well on that last point centering policy practice
funding.
All should be centered on thestudent, the learner.
So I appreciate that lastcomment that you made.
Well, listen, Claire I reallyappreciate you taking some time
and, and joining me in thisconversation.
I think it's an importantconversation for people from all
(19:15):
backgrounds in higher educationto better understand.
I think these questions thathave been raised by the
department, these changes thathave been proposed to better
protect.
Learners are, are an importantdiscussion that I think most
people really haven't thoughtabout.
So I think it's a great time to,to open up this topic.
So I really appreciate youspending some time with me,
(19:35):
sharing your expertise and, andsharing your thoughts.
So thanks for joining me.
Clare (19:40):
Yeah.
I appreciate it.
Good to see you.
Eloy (19:42):
All right, well, thanks everyone for joining me on the
rant.
If you enjoyed this episode asmuch as I did, hit the like
button leave me your comments tohear more episodes.
Please subscribe to the channeland follow us on your favorite
podcast platform.
Take care, everybody, and we'llsee you soon on the rant.
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