November 25, 2025 • 44 mins
A single number now threatens to define whether a program survives: does it deliver an earnings premium over a high school diploma? We sit down with Phil Hill to unpack how federal accountability just shifted from dashboards to consequences, why the current metric is misaligned with how real labor markets work, and what leaders must fix before 2026.
We break down the design choices that matter—statewide medians versus sub‑state regions, demographic blind spots, and the absence of program cost and debt from the core test. Phil points to stronger models in state systems and long‑running research from Georgetown CEW, then lays out practical steps for negotiated rulemaking that would keep accountability sharp while avoiding collateral damage to open‑access colleges and regionally constrained programs.
The conversation turns to graduate loan caps and the end of easy cross‑subsidies. Expect new pricing discipline, tougher portfolio management, and experiments in financing that need safeguards to avoid a repeat of the 2000s. We also map the OPM shakeout: why some giants stumbled, how mid‑market firms are adapting, and where state‑level transparency rules are reshaping contracts. With generative AI accelerating change in curriculum, support, and marketing, universities need partners—and policies—that keep pace without losing sight of honest outcomes.
If you care about ROI, mobility, transparency, and the future of online learning, this is your field guide to the next era of higher ed policy. Listen, share with a colleague who owns program strategy, and leave a review telling us which metric you’d add—or drop.
https://onedtech.philhillaa.com/
eloy@4leggedmedia.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_02 (00:10):
Hi, this is Zeloyer Tease Oakley, and welcome back
to the Ramp Podcast.
The podcast where we pull backthe curtain and break down the
people, the policies, and thepolitics of our higher education
system.
This episode, I welcome backPhil Hill.
This will be Phil's thirdappearance here on the Ramp
(00:31):
Podcast, and it's great to havehim back.
Phil is a higher educationconsultant, and Phil is also the
editor on the Phil on EdTechnewsletter, which is widely read
in the higher educationmarketplace, and Phil does an
excellent job of digging intothe education technology
marketplace, and most recentlydigging into federal
(00:55):
accountability policy.
And that's what will be thetopic of today's episode.
I sit down with Phil and we talkabout federal policy,
particularly federal policy thathas come out of the OB3 piece of
legislation, otherwise known asthe one big beautiful bill act.
(01:15):
I sit down with Phil to get histhoughts about the new federal
accountability framework,particularly as it relates to an
earnings premium.
There's a lot of conversationthese days about measuring
return on investment, economicmobility, ensuring that learners
earn more than they would haveby not entering this program of
(01:39):
study.
And the federal policyframework, the new
accountability framework, takesinto consideration earnings for
programs of study.
And for those programs of studythat don't, over about a
five-year period, have earningspremiums that are above and
beyond what you would haveotherwise earned right out of
high school, then those programsare susceptible to losing the
(02:04):
ability to get federallysubsidized loans.
So Phil will join me to talkabout his work, his concerns
about the new federal framework,and some thoughts that he has on
how to improve it.
And this is an importantconversation given that the
Department of Education iscoming up on starting the
(02:27):
negotiated rulemaking for theregulations that will need to be
put in place for this newaccountability framework.
So now is a perfect time to havethis conversation.
I hope all of our listeners joinin this conversation because
it's going to affect every typeof higher education institution
in America.
From community colleges to foryour regional universities to
(02:51):
private liberal arts colleges tothe most selective or rejective
colleges and universities in thecountry.
Every program of study is goingto be held accountable.
And quite frankly, it's abouttime.
And while it's about time thatwe have an accountability
framework, there are still a lotof issues to be worked out,
(03:13):
particularly in terms of whatkind of data we're going to draw
from and what is the best way tomeasure an earnings premium.
So Phil will join me to talkabout that, give his
perspective, give his thoughts,and we'll rant a little bit
about what's going on in highereducation today.
We'll also get into the new capon federal student loans for
(03:35):
graduate programs, and we'lltalk a little bit about the OPM
marketplace.
So with that backdrop, pleasejoin me in welcoming back for
the third time on the RantPodcast, Phil Hill.
Phil, welcome back to the RantPodcast.
SPEAKER_00 (03:53):
Thank you.
I'm really looking forward toit.
By the way, I have to check howmany other three-time guests
have you had before?
I'm checking for braggingrights.
SPEAKER_02 (04:02):
Well, you know, I I believe, I believe I've only had
one other three-time guest.
It might be Michael, MichaelCrow.
So you you are definitely upthere in the rarefied air, Phil.
Well, tell Michael I'm comingfor him next year.
Well, as hard as he is theschedule, I have a feeling
you'll catch up to him.
(04:22):
Yes.
Well, thanks for coming back,and it's always fun to chat with
you, Phil.
And I just want to begin with Iappreciate you always digging
into issues surrounding thehigher education marketplace and
particularly some of the mostrecent issues regarding the
higher education accountabilityframework that recently got
(04:46):
signed into law.
But before we get started, uh,how are you doing?
What's what's keeping you up atnight these days?
SPEAKER_00 (04:54):
Well, it's the same answer.
It's the accountabilityframework, it's the schools,
colleges, and universitiesstarting to wake up to the
implications here.
And it's, you know, with thenegotiated rulemaking in just a
couple weeks, it's sort ofinteresting that I'm there's a
lot of interest now.
You know, there's a piece of mesaying, uh, you should have been
(05:15):
interested a while ago, but thatis keeping me up.
I also I had written about theaccessibility, but yeah, those
those issues are sort oflooming.
And so the general thing that Ithink about a lot is are the
call are colleges anduniversities really ready for
what's going to be hitting themin 2026?
(05:36):
The and the general answer isno.
So then the follow-up is, youknow, are they going to?
What progress are they going tomake?
So yeah, those are the bigtopics right now.
SPEAKER_02 (05:47):
Yes, it's definitely a big topic.
And, you know, uh just hearingyou talk about uh and ask the
question, are they ready?
It's just amazing to me, havingbeen in this conversation for so
long.
In one of your recent posts, youyou referenced the
post-secondary value commissionwork and some of the other work
(06:07):
that's been going on for a longtime.
And this conversation abouteconomic mobility, about adding
another metric to what we wouldconsider success, the
post-secondary level, has beengoing on for quite some time.
I mean, my my hair was a lotdarker when I served on the
post-secondary value commission,and and this conversation was So
(06:30):
I should thank you for thisreport that came out.
Yeah.
I mean, even back then there wasconversations about increasing
the value, being concerned aboutthe erosion and confidence in
the value of a degree.
And this was, geez, at least 10years ago.
I lose track of time these days,but it feels like a million
(06:53):
years ago that that conversationwas getting started.
I also reflect and think abouthow it felt when in the early or
mid-2000s, well, not mid-2000s,I'd say you know, 2006, 7, 8,
when conversations aroundcompletion were creeping into
(07:14):
the conversation and and howmuch backlash there was to even
contemplate completion as ametric of success, particularly
at the community college level,where there was always this
notion that we serve too manymissions, we can't we can't be
held accountable to one specificmetric of completion.
(07:37):
So I I give that backdrop onlyto say that I'm always skeptical
when I hear higher educationleaders push back on a new
metric of accountability.
But at the same time, I'll beginby saying I agree with you that
there are challenges in thecurrent data and the way the
(07:58):
metric is devised.
But before I get into all mythoughts, let's start with you.
Tell us about your concernsabout the federal accountability
framework, specifically theeconomic metric, the metric that
measures earnings, and what youthink some of the unintended
(08:19):
consequences if it goes intoregulation the way it reads
today.
SPEAKER_00 (08:26):
Sure.
And I'll start out with sort ofthe general concept.
I'm in agreement that we've beentalking about outcomes
completions.
SPEAKER_02 (08:34):
Right.
SPEAKER_00 (08:34):
And now we've been talking about economic returns
for graduates for a long time.
The difference is now we'retalking about accountability, as
in programs potentially losingaccess to federal financial aid
loans.
And I think it's needed, to bequite honest.
So I'm a supporter of theconcept.
Uh-huh.
(08:55):
So having said that, most of mycriticisms have been on the
chosen metrics, the way thatwe're planning to implement
them.
And gainful employment andfinancial value transparency
became regulation in 2023, thelatest version of it.
And the earnings premium was oneof two metrics that get applied
(09:17):
there.
And that just simply says, whatare the earnings of your
graduates completers, sincewe're talking undergraduate
certificates quite often, threeyears after they finish a
program.
And let's compare that to highschool, no college people age 25
through 34 within one state.
(09:37):
That same metric, the earningspremium, got implemented by law
with uh OB3, uh, one bigbeautiful bill.
And so now everybody's gonnahave to live with it.
The difference is it's fouryears versus three, some minor
differences.
So, what are my fundamentalobjection?
(09:57):
Well, I guess I have two.
One is that's only one metric.
It doesn't even take intoaccount debt, it doesn't take
into account program cost.
There's a lot of things having asingle metric is one of my
biggest complaints because thatputs a huge burden on that one
way of viewing things, andyou're gonna have tons of
(10:19):
unintended consequences.
What I've written more about isthe fact that the chosen metric
and the way it aggregates data,it might seem sort of pedantic
or data focused, but I thinkit's important because it's
comparing your median earningsof a specific program, a group
of 35, 40 students in thisparticular two-year period.
(10:43):
What are their median earnings?
But to get to the concept of didyour college degree add value,
you have to have a comparisongroup.
Right.
And the comparison group isaggregated across an entire
state, and it's for ages 25through 34, and it ignores all
other demographics.
(11:05):
So that's just a fundamentallymisaligned metric in the way
it's going.
And two examples states, regionswithin a state have different
income levels.
So your state, California, usedto be my state.
You're always welcome inCalifornia, Phil.
Sure.
Well, for visiting.
(11:25):
I don't want the taxes.
But there's a plus or minus 20%difference depending on what
part of California you're incompared to that median
comparison group.
So what that means is if you'rein a rural, it's not always
rural, but if you're in alow-income area of the state,
which often means you're servingdisadvantaged students, lower
(11:47):
income students, those schoolshave an additional 20% burden,
up to a 20% burden, just to passthe metric because they're in a
naturally low-income area, butthey're getting compared to the
statewide median.
So what's an unintendedconsequence?
You're going to have a lot moreprograms in rural low-income
(12:10):
areas failing simply because ofwhere they are than people are
expecting.
And that's poor public policy.
And a quick example, there areother demographic issues, such
as female versus malecomposition, has whatever the
reasons, that also has a plus orminus 20% difference.
(12:32):
And you're ignoring that.
So the example I use, let's sayyou're a woman in McCallan,
Texas, and you see a programthat my nominal income is a high
school graduate, I'm going tomake$20,000 somewhere.
Let's just say that I take someprogram and I boost my earnings.
That's what we're trying to gofor.
(12:54):
But because the comparison groupincludes Austin, Dallas,
Houston, it's a statewide media.
The program I'm taking, it mightbe doing me a lot of good, but
it might fail simply becausewhere I am and ignoring the
demographics.
So that's the fundamentalargument, is it's a poorly
designed metric that misses thebiggest variations.
(13:18):
And once we see what happens, Ican already tell you it's going
to be predominantly the openaccess public, you know,
low-income areas that suffer themost.
And I'm not trying to say, oh,they all should get a pass
because they're low income, butsmart public policy should take
these things into account.
(13:39):
So that's my fundamentalargument here.
SPEAKER_02 (13:41):
I've certainly heard that that argument in other
circles.
Part of the problem is the datathat the federal government has
to do this calculation.
I mean, I think that's that'sanother part of this is what
data are they going to use?
There's always this questionthese days about are we going to
(14:02):
have federal data to draw from?
Are we not?
Is this is the college scorecardgoing to be there?
Is it not?
And there's always been thisargument that virtually every
data metric that the federalgovernment has used is flawed
because of the data that they'reusing, whether it's iPads data,
whether it's college scorecarddata.
(14:23):
So, yes, I mean I wouldfundamentally agree that the
data is not great.
And so, like you, I'm I'mhopeful that this conversation
can be had in negotiatedrulemaking.
I'm not going to hold my breaththe way that rulemaking is.
SPEAKER_00 (14:40):
If you release this podcast by then, it might change
the game.
Right.
Actually, if you don't mind mejumping in, there's a
difference, fundamentaldifference, data available
versus the chosen data for ametric.
So, for example, on thegeographic, you know, substate
regions and the you know,capturing the income differences
within a state, that data isavailable.
(15:02):
It's actually available withinthe same data sets that the
government's already accessing.
So it's not the geographic area,it's simply a matter of they
chose not to define it in a verysophisticated way.
It's not a data availability.
I go on the ACS data, all youhave to do is click one thing
(15:23):
and you also get the region.
And the computing zone is thebest one.
So I don't want to go into toomuch detail on one issue, but I
just want to point out there's adifference between I agree data
is not per data is not perfect.
However, data available andchosen data within the metric,
there's a big gap.
That's more what I'm interestedin.
SPEAKER_02 (15:44):
I completely agree with that point.
In my mind, it even goes onestep further, which we're not at
that step yet.
And and my hope and a lot ofwork that's being done in DC
right now with differentorganizations is to take that
next step, which is to reallybring this down to the state
level and really get states tohave robust data systems where
(16:06):
they could do an even better jobthan the federal government
could do.
I know we're not there yet, andwe're still quite a ways away,
but my hope is that that's wherewe where we eventually get.
Because when we did similaranalysis in California, as you
well know, we partnered withMichael Iskowitz from HEA Group.
(16:28):
We've done a number of differentreports.
We did a California MobilityIndex that measured mobility for
the four-year institutions inCalifornia.
We did a programs that payreport that focused on programs
of study and the return oninvestment in those programs of
study.
We've done reports on return oninvestment for the two-year
(16:48):
institutions.
And that's where we really foundthe challenge.
We could not duplicate themobility index that we did for
the four years because of thehuge regional differences that
community colleges exist in inCalifornia and every state for
that matter.
And the challenge you have withPell uptake in community
(17:12):
colleges.
Many community colleges, and Idisagree with this notion and
I've argued against this notionfor years, but most community
colleges are not designed tomaximize Pell uptake for their
low-income learners.
And therefore, it's hard toreally measure the amount of
low-income learners that you'reserving, what their earnings
(17:34):
are.
So I do think that there isquite a number of issues that we
still need to tackle, as youpointed out.
And hopefully some of those willbe ironed out in rulemaking, but
I think ultimately these aregoing to have to be ironed out
by systems and organizations,the ASCII's of the world, the
(17:55):
ACCTs of the world, and states.
Because I agree with anotherpoint you made that many, if not
most, institutions were slow towake up to what this was going
to mean, which is why CollegeFutures published the report
early this year to just give ahighlight to people what this
(18:16):
was going to look like.
And we had places like ComptonCollege, which showed some
pretty poor return on investmentmetrics compared to some of the
other institutions in the LACounty area.
But if you take a look locally,one, the job market is not as
great in that region.
Two, the programs of study arenot well aligned with the jobs
(18:38):
that are available.
So all those things willhopefully create a conversation
that will lead to a bettermetric.
But we'll see.
Hopefully, like you said,somebody at Ed will listen to
this podcast and give this somethought.
SPEAKER_00 (18:55):
And if you don't mind me adding just one other
point that's sort of theopposite side of the argument,
it's why this is important.
And it gets to your point aboutthere's always people arguing
against even the concept.
Is I find it, to be quitehonest, disingenuous how many
people who were arguing.
This sounds pretty pointed, butI'm going with it, that hey, the
(19:16):
masters of social work shouldhave been included in a
definition of a professionaldegree so that students could
borrow up to$200,000.
And I heard that argument, andI'm like, are you kidding me?
Your argument is could we pleaselet social workers run up more
than$100,000 in debt?
(19:37):
That's your argument.
So my point is, yes, there'sgoing to be some of the
resistance that's conceptual innature.
And I think there's a need tosay, sorry, you're going to have
to find a new way of figuringthis out.
So hopefully that won't get youin trouble that I mentioned that
example.
SPEAKER_02 (19:54):
No, it won't get me in trouble.
I've already been in troubleoften enough over these issues.
And specifically with aparticular institution here in
California that is famous fortheir social work program.
Okay, we'll say no more.
SPEAKER_00 (20:08):
Most people have figured that out.
SPEAKER_02 (20:09):
But but no, I think I think your point is well
taken.
These are the kind of argumentsthat tend to pop up in moments
of increased accountability,calls for increased
accountability.
But you know, I just think ifyou're an institutional leader
and you're still fighting thisfight on that level, I'm not
saying that we shouldn't fightthe fight over what is the right
(20:30):
metric, what is the right data,to your point.
But if you're still arguing thatwe can't have this kind of
accountability, then you havenot been listening to what's
going on across the country.
SPEAKER_00 (20:42):
And I think this is part of what you're saying.
And and don't assume that it'scaught up in polarization
because it's a bipartisan movetowards accountability.
SPEAKER_02 (20:52):
And we'll jump into the the graduate student loan
conversation in a minute.
But when I was in thoseconversations in DC, one thing
that became clear to me earlyon, way before you know the big
beautiful bill came about.
SPEAKER_00 (21:09):
I think the cool kids call it OB3.
SPEAKER_02 (21:11):
OB3, yes, yes, and that's why I don't call it OB3.
But one thing that became clearwas that this frustration with
graduate student loan borrowingwas bipartisan, cross-isle, you
know, this was going to happen.
And I warned my colleagues earlyon that if this is a point of
(21:34):
bipartisan agreement in theSenate, guess what?
Then this means that there is alot of support for this
direction.
So anybody caught by surprise bywhat happened to the graduate
student loans has not beenpaying attention or reading the
writing on the wall.
Those are frustrations that Ifrequently have.
(21:54):
I just don't understand whatuniverse sometimes our
educational leaders are livingin.
But nevertheless, there arereports that come out every week
about uh economic mobility,return on investment, uh,
programs that pay.
You know, the Georgetown Centeron Education in the Workforce
(22:15):
recently has come out with a fewreports.
Most recently, baccalaureateprograms of study and whether or
not they pay off.
Based on what you've seen, doyou see anybody that you think
is doing it better than othersin terms of publishing the data,
something that the federalgovernment could point to?
SPEAKER_00 (22:34):
Well, I think at the Georgetown CEW, part of their
benefit is they've been doingthis for a while.
They've been exploring it fromdifferent angles.
And so they were an early leaderto look at both the education
and the workforce side and howthey connect together.
So I give them a lot of creditjust for their long-term
(22:55):
commitment to this issue.
I think the underlying data, theUniversity of North Carolina
system that did that big reporta couple of years ago, I felt
that some of their conclusionswere a little bit watered down.
But the data collection and theway they viewed it, I thought
that was quite good.
(23:16):
And it was statewide and itlooked at all the colleges
within the state.
The Texas Higher EducationCommission, that they are not
just doing research studies.
It ties into funding in Texas.
So I would argue they're aleader into the accountability,
not just the concept, butactually tying it to funding.
(23:37):
So I would point them out.
And then also go back to thatreport that you mentioned.
I really appreciated thePostsecondary Value Commission
funding the University ofWisconsin researchers and
looking at one metric.
So they're not doing an overallhere's the total return on
investment.
They just provided a veryactionable, useful research
(24:00):
report on the subject thathelped explain things in neutral
terms and hopefully will reallyinform what's happening in DC
starting in December.
So those are a couple that Iwould point out.
I I see a lot of snippets hereand there that are useful.
Yes.
But there's a lot of need to getthe word out, not in a marketing
sense, but to make sure peopleare understanding.
(24:22):
There's almost a before 2026 andan after 2026.
That's one of the key messages,is we're moving into
accountability for nearlyeverybody.
As in, you could lose youraccess to federal financial aid
loans.
That changes the game fromresearch report and dashboards
(24:44):
into, ooh, we better payattention.
So that's part of the reason I'mreally harping on the importance
of what's about to happen andthe long-term work you're
mentioning that you've beeninvolved in, I think it really
changes next year.
SPEAKER_02 (25:00):
I I agree.
And I definitely think it istime for institutions to pay
attention to this because it isgoing to creep up on them.
And if they don't make theirvoices heard now, I mean, we're
we're in an era of negotiatedrulemaking that's a little
different than what it was inthe past.
Now, we can always argue thatdepending on which
(25:20):
administration you have, there'sa slant in the negotiating
rulemaking.
But based on what I just sawwith the graduate student loans,
the department comes in with avery specific point of view.
So institutions and theiradvocacy organizations better
(25:42):
speak up now and betterparticipate.
SPEAKER_00 (25:44):
And I'd also point out, I think there's something
unique, and that this was theRISE committee that just
concluded two weeks ago.
That was the only the secondnegotiated rulemaking and
education that actually reachedconsensus for the full package
in the past decade.
So we already know that thelanguage was captured by that
(26:06):
group.
Now, part of the reason Imentioned that, each
administration has differentpriorities, but I think there's
also a negotiating tactic thatthe Trump administration is
doing.
Yes.
Where they said the consensuswas for the whole package, not
for individual topics.
Right.
And I think they used that tosort of, well, they definitely
(26:27):
did to strong arm into aconsensus.
They use pretty sophisticatednegotiating because they
explicitly said at the end, allright, this isn't perfect, but
if we don't reach consensus,you're going to lose all these
other things that we did agreeon.
And that was, I'm not trying todefend it or criticize it, but I
(26:48):
am pointing out it's actuallypretty different.
And I think people need to beaware that I expect this
upcoming rulemaking to havesimilar negotiating tactics
behind that we haven't been usedto.
SPEAKER_02 (27:02):
I certainly agree with that.
Let's continue talking aboutfederal policy and the most
recent rulemaking regardingthings like graduate student
loans.
Based upon what you've seen inthe marketplace, well, and let
me take a step back.
I mean, I'll I'll put my bias onthe table.
Having spent a lot of timeeither on the UC Board of
(27:25):
Regents or watching the wholedebt crisis come about, whether
my time in DC or in other rolesthat I've had, this has
definitely been a point offrustration for many people on
both sides of the aisle.
My experience on the UC Board ofRegents was that year after year
we kept seeing more and moregraduate programs come to the
(27:46):
board to seek professionalstatus because that allowed them
to then charge what in the UCwhat we call professional fees,
fees on top of the usualtuition.
So they were more expensive.
But I've seen a proliferationover the years of what some call
(28:08):
or try to call professionalgraduate degree programs and
thus charge a premium for them.
We saw that in the example thatyou just mentioned, social work,
which clearly, if you look atthe earnings of a social worker
or a person employed in a countyor a city here in California,
(28:30):
it's virtually impossible to payback that loan based on the
earnings that you're going tomake over your your lifetime,
particularly if you're gettinginto that field of study, that
field of work in your late 20s,early 30s, some of them in their
40s.
So I understand the deepfrustration that people have
(28:52):
with the amount of debt that wasbeing accumulated and the lack
of economic return for that debtfor graduate programs.
Based on what you're seeing, howdo you think that this is going
to impact colleges anduniversities that offer graduate
programs and particularlyprofessional programs?
SPEAKER_00 (29:14):
I think it's going well, cross-subsidies.
That's what's going to take ahit.
Yeah.
Is if you look at it on aprogram-by-program basis and
argue about professional status,I think that's missing the big
story.
I mean, it's important.
But the reason these programsare proliferating is these
universities want to have thatmoney and they use a lot of it
(29:36):
for cross-subsidizing otheruniversity operations.
So I think the biggest impact isgoing to be on universities at
large, not just on individualprograms.
You'll see things like SantaClara University, which is
private, but you know, younotice they just changed, they
created a grant or a guaranteedgrant of some type.
(30:00):
That put them right at the limitof the new loan limits.
And I think we're going to seemore of that, where schools are
saying, we recognize theimportance of we better not go
above this dollar amount, orelse we're going to have a real
problem.
So I think you'll see more ofthat, but the bigger impact will
be university-wide.
And you can criticize, or mybiggest criticism is how is
(30:26):
theology in there as one of theprofessional programs right now,
yet airline pilots, wherethere's a clear path to payback,
it's not in there.
So I think that's an example,the biggest example of why is
this considered professionalinstead of this?
SPEAKER_02 (30:43):
I don't know.
It should make you scratch yourhead.
And that that's where this thisindustry, my industry, has had
too many of these moments whereyou're doing things and the rest
of the American public sit thereand scratch their head.
SPEAKER_00 (30:58):
Yeah, exactly.
So there's that.
But the overall impact, it isgoing to force these graduate
programs, whether they gotprofessional status or not, to
start actively managing it.
And what that's going to leadto, I think, along with the
accountability, the combination,is now at the leadership level,
(31:21):
presidents, their board, theirboard, their C-suite, the
provost, at that universityleadership level, the CFOs,
they're going to need to startdoing portfolio management
instead of just handing off somuch of that to individual
colleges, deans, and departmentchairs.
So it's going to raise portfoliomanagement up.
(31:44):
And a big topic will be wait,why are we charging this much?
That's going to cause thisproblem.
You know, what's going to happento our cross subsidies?
So and overall, I mean, from apersonal standpoint, that's a
good thing.
I think we should be havingthese conversations.
SPEAKER_02 (32:00):
We should be having these conversations.
And my fear, although it'swouldn't characterize it a fear,
it's it's going to be a naturalreaction in addition to the
things that you just mentioned.
I think one, there'll be morepressure on deans to fundraise
outside of, you know, chargingtuition to maintain their
programs.
(32:20):
Two, there's already a lot ofdiscussion about coming up with
private financing mechanisms forsome of these programs.
I I hear this a lot coming up inlaw programs these days.
And the concern that the CAPwill restrict the amount of
low-income learners that canaccess top-tier law programs.
(32:46):
Although I'm not sure thattop-tier and having to charge
that much always goes together,but apparently in the legal
industry it does.
Do you have similar concerns?
Are we going to see a lot moreprivate financing schemes come
up?
SPEAKER_00 (33:03):
Well, concerns on how it's managed.
Will it be like it was in the2000s?
And some of the loans wereexorbitant and such high
interest rates that even if youget people into this, they're
going to have a lifetime ofdebt, even worse than going
through the federal program.
Yeah, so I'm concerned aboutthat.
I've talked to a few schools,and maybe this is Pollyanna,
(33:27):
that is hoping that part of whatwill happen is universities will
get creative on, okay, I as auniversity will find a way to
back a loan.
So the loan's from the privatesource, but because the
university is backing it, itcould be a lower interest rate
and a better way to helpstudents who need to have it.
(33:47):
That's what I hope we see, asopposed to just a return to what
we were seeing in the 2000.
So do I have a concern?
Yes.
But to be quite honest, I have abigger concern if we did nothing
about it.
So not trying to be heartless,but yeah, I it's a secondary
concern.
I think the bigger problem is Ithink there should be downward
(34:09):
pressure on the prices of theseprograms.
Agree.
In the end, that's what's goingto actually help lower income
students more than the near-termpain that we're going to see.
SPEAKER_02 (34:22):
So I hope that this sort of is a reckoning, and to
your point, that it drives downthe cost of these programs.
Yes, they will always beexpensive programs, but I think
if we relook at the way that wedeliver the teaching and
learning in programs,particularly as archaic as law,
(34:42):
rethink what good quality is andfind ways to lower the cost.
I think that's a goodconversation for academia to
have right now.
Let's jump into one last topicbefore we wrap up.
You spent a lot of time lookingat the ed tech marketplace, you
spent a lot of time looking atonline programs, and while some
of this other news has sort ofhas drowned out some of the
(35:05):
other things that have beengoing on for quite some time.
I I want to focus a little bitof attention on what's happening
with OPMs, online programmanagement companies.
There was sort of this shakeoutuh about a year or two ago, you
know, all the concerns about theyou know 2U and and some of the
(35:26):
other OPMs.
There was a lot of pressure puton them.
I think there was a bit of ashake out.
Where do you see the OPMmarketplace right now?
And do you see that it's stillunder pressure from consumer
advocacy groups?
SPEAKER_00 (35:40):
Well, I'll answer the second question.
Yes, they're still underpressure from advocacy groups,
but it's mostly now at the statelevel and not at the federal
level.
But we can get into that.
Where do I see it?
It's it's a it's a market inthat's in the middle of an
inflection point.
And keep in mind, 2U did not gobankrupt because of advocacy
(36:02):
groups.
They went bankrupt because oftheir debt management and their
acquisition of edX.
That's what led to them goingbankrupt.
Now they're out of bankruptcyand they've done a great job
with that.
But I'm waiting for them toactually say, well, here's the
revised strategy, here's who weare today.
(36:23):
I know they're trying toevaluate it, but my goodness,
it's more than a year afterbankruptcy, and there's no new
messaging coming out of that.
You have Coursera, who basicallysaid, our OPM business, we're
not pulling out of it, but itwe're not even going to
separately report it, and weknow that the revenues go down,
and we don't care.
So Coursera has effectivelypulled out of a lot of the OPM
(36:49):
market.
Wiley sold to academicpartnerships, became Rise Point,
and now they're the big player,which is pretty interesting that
they're the dominant.
That's not who I would havepredicted 10 years ago.
No offense to the leadershipthere, but I wouldn't have
predicted that.
So where you are now is a wholenew market leader that has sort
(37:11):
of flown under the radar from apolitical standpoint for a long
time, and I think they're doingfairly well.
They're getting attacked more atthe state level.
The most recent state withaction is likely Illinois, but
definitely the Minnesota law.
There was some action inCalifornia, but the Senate bill
got defeated that would havepartially impacted them.
(37:32):
So it's state-level issues theyhave to manage.
But the bigger issue for the OPMmarket is you can't run your
business the way you did 2015.
That's right.
Colleges and universities aredifferent.
They have a different set ofneeds now, particularly after
COVID.
So the market needs a reset, notnecessarily from policy issues,
(37:54):
but from market issues.
I've been disappointed thus faron seeing revised strategies and
models and strong bets.
You know who I do see that fromand who seems to be doing well
are the ones that we used toconsider partial OPMs or on the
fringe, you know, likecollegiate, Everspring,
(38:17):
Education Dynamics, Archer, sortof the second-tier type of
players.
They seem to be the more nimblecompanies in doing better now.
Now, I don't know how thatchanges the big players like
Risepoint, but I've seen moreinnovation there than I've seen
in the mainline OPM space.
(38:39):
So what am I watching?
There is state level policy, buta bigger question to me is
market demand.
And when and how will theyactually strategically change
their offerings to be ready forthe next 10 to 15 years and not
just living on what they used todo.
So it's a market that has notmade the changes it needs to
(39:01):
make yet, is the way I wouldcharacterize it.
SPEAKER_02 (39:04):
I would agree with that.
Clearly, in my view at least,there still is demand for the
services of OPM offer.
I just think about theCalifornia State University
system, it's in a huge holeright now, has enrollment
challenges, and it really needsto find its footing in being
able to reach learners outsideof the brick and mortar.
(39:26):
So there is still a need, thereis still demand, but I agree
that the the formula needs tochange in order to keep up with
the changes in the type ofdemand and the marketplace.
And I think once and for all,they need to solve this issue
that keeps coming up aroundtransparency in terms of who the
(39:49):
learner interacts with and dothey know what's what's
happening.
SPEAKER_00 (39:53):
Well, that then look at the state level.
In Ohio, you should be happythen because the initial bill
produced in Ohio was a draconianideological, let's kill OPM.
Right.
There's no two ways about it.
That's how it was introduced.
The Ohio Senate really, it wasalmost like the adults came in
the room and said, no, we'regoing to take what you're what's
(40:15):
really needed and come up with amore effective bill.
And the centerpiece relating toOPMs is transparency.
Let's make sure it's obvious whoyou're talking to.
Do they work for the university?
Do they work for a third-partycompany?
So I I assume you like the waythe Ohio built.
SPEAKER_02 (40:33):
I I do.
I think my my biggest issue isjust it's the transparency.
Just answer the fundamentalquestions.
The learner should know whothey're interacting with, and
you know, the public should knowwho's paying for what.
Uh particularly if it's a publicinstitution.
If it's a private institution,well, that's that's a different
(40:54):
ballgame.
But any public institution, itthere just should be clarity and
transparency, both for the sakeof the of the college or the
university, but also for thesake of the of the vendor, the
partner.
I I just think it's it's just acleaner transaction.
There is a need, there isdemand, there is expertise.
(41:15):
Colleges and universitiescontract for expertise all the
time, every day.
So this is not something unique.
Just be transparent about howit's working and make sure the
learner knows who they'reinteracting with and and where
they they can get support.
So those are my only issues, andand I hope that this is
(41:36):
something we can resolve becausemany, particularly public
regional universities and a lotof the privates, the small
privates, are really sufferingright now.
And they they need a differentstrategy.
They need to figure outdifferent revenue.
SPEAKER_00 (41:49):
I'll add one at the risk of I know we don't have
time to go down this rabbithole, but it's a big rabbit
hole.
Gen AI.
You don't want to rely onindividual schools having to
figure out what's changed in thepast month and how does that
impact the ability to do anonline program.
So I'm seeing an increasingdemand for OPMs or related
(42:12):
companies who can help say,here's where Gen AI is going,
and we're going to help you takeadvantage of it and not get hurt
by it, ideally.
But my point is, I actuallyagree there's demand, and I'm
even seeing increasing demandonce you throw Gen AI in the
mix.
The question is, well, policytransparency that you mentioned.
(42:33):
But the other question is, thesecompanies need to update their
models so that they can meetthis new demand.
SPEAKER_02 (42:40):
Agreed.
And maybe we will come back atanother time when we give you
your robe that has the numberfour on it, just like Saturday
Night Live does for their hosts.
Yes, um, and we can talk aboutGen AI, but that's for another
episode.
Maybe after we survive theASUGSV summit, we'll come back
(43:00):
and talk more about that.
Yeah, good.
And I look forward to seeing youthere.
All right.
Well, Phil, thank you for beingwith us again.
And as always, thanks for yourinsights and for just leaning
into these issues every singleweek.
I enjoy reading all your piecesand your newsletter.
SPEAKER_00 (43:18):
Well, thank you very much.
As always, I have fun talking toyou, and it's great to jump into
meaningful, deep conversationsright away.
So thank you.
SPEAKER_02 (43:27):
All right.
Well, thanks for joining us,folks.
You've been listening to myconversation with Phil Hill.
Phil's a higher educationconsultant.
He's also the editor of the Philon EdTech newsletter, which
everyone should be reading.
I'll put a link to where you canaccess the newsletter in the
notes section of this podcast.
If you're watching us onYouTube, please hit subscribe,
(43:47):
continue to follow us, and ifyou're listening to us on your
favorite podcast platform,download our episodes and
continue to follow us.
Take care, everybody, and we'llsee you all soon.
Hi, this is Zeloyer Tease Oakley, and welcome back
to the Ramp Podcast.
The podcast where we pull backthe curtain and break down the
people, the policies, and thepolitics of our higher education
system.
This episode, I welcome backPhil Hill.
This will be Phil's thirdappearance here on the Ramp
(00:31):
Podcast, and it's great to havehim back.
Phil is a higher educationconsultant, and Phil is also the
editor on the Phil on EdTechnewsletter, which is widely read
in the higher educationmarketplace, and Phil does an
excellent job of digging intothe education technology
marketplace, and most recentlydigging into federal
(00:55):
accountability policy.
And that's what will be thetopic of today's episode.
I sit down with Phil and we talkabout federal policy,
particularly federal policy thathas come out of the OB3 piece of
legislation, otherwise known asthe one big beautiful bill act.
(01:15):
I sit down with Phil to get histhoughts about the new federal
accountability framework,particularly as it relates to an
earnings premium.
There's a lot of conversationthese days about measuring
return on investment, economicmobility, ensuring that learners
earn more than they would haveby not entering this program of
(01:39):
study.
And the federal policyframework, the new
accountability framework, takesinto consideration earnings for
programs of study.
And for those programs of studythat don't, over about a
five-year period, have earningspremiums that are above and
beyond what you would haveotherwise earned right out of
high school, then those programsare susceptible to losing the
(02:04):
ability to get federallysubsidized loans.
So Phil will join me to talkabout his work, his concerns
about the new federal framework,and some thoughts that he has on
how to improve it.
And this is an importantconversation given that the
Department of Education iscoming up on starting the
(02:27):
negotiated rulemaking for theregulations that will need to be
put in place for this newaccountability framework.
So now is a perfect time to havethis conversation.
I hope all of our listeners joinin this conversation because
it's going to affect every typeof higher education institution
in America.
From community colleges to foryour regional universities to
(02:51):
private liberal arts colleges tothe most selective or rejective
colleges and universities in thecountry.
Every program of study is goingto be held accountable.
And quite frankly, it's abouttime.
And while it's about time thatwe have an accountability
framework, there are still a lotof issues to be worked out,
(03:13):
particularly in terms of whatkind of data we're going to draw
from and what is the best way tomeasure an earnings premium.
So Phil will join me to talkabout that, give his
perspective, give his thoughts,and we'll rant a little bit
about what's going on in highereducation today.
We'll also get into the new capon federal student loans for
(03:35):
graduate programs, and we'lltalk a little bit about the OPM
marketplace.
So with that backdrop, pleasejoin me in welcoming back for
the third time on the RantPodcast, Phil Hill.
Phil, welcome back to the RantPodcast.
SPEAKER_00 (03:53):
Thank you.
I'm really looking forward toit.
By the way, I have to check howmany other three-time guests
have you had before?
I'm checking for braggingrights.
SPEAKER_02 (04:02):
Well, you know, I I believe, I believe I've only had
one other three-time guest.
It might be Michael, MichaelCrow.
So you you are definitely upthere in the rarefied air, Phil.
Well, tell Michael I'm comingfor him next year.
Well, as hard as he is theschedule, I have a feeling
you'll catch up to him.
(04:22):
Yes.
Well, thanks for coming back,and it's always fun to chat with
you, Phil.
And I just want to begin with Iappreciate you always digging
into issues surrounding thehigher education marketplace and
particularly some of the mostrecent issues regarding the
higher education accountabilityframework that recently got
(04:46):
signed into law.
But before we get started, uh,how are you doing?
What's what's keeping you up atnight these days?
SPEAKER_00 (04:54):
Well, it's the same answer.
It's the accountabilityframework, it's the schools,
colleges, and universitiesstarting to wake up to the
implications here.
And it's, you know, with thenegotiated rulemaking in just a
couple weeks, it's sort ofinteresting that I'm there's a
lot of interest now.
You know, there's a piece of mesaying, uh, you should have been
(05:15):
interested a while ago, but thatis keeping me up.
I also I had written about theaccessibility, but yeah, those
those issues are sort oflooming.
And so the general thing that Ithink about a lot is are the
call are colleges anduniversities really ready for
what's going to be hitting themin 2026?
(05:36):
The and the general answer isno.
So then the follow-up is, youknow, are they going to?
What progress are they going tomake?
So yeah, those are the bigtopics right now.
SPEAKER_02 (05:47):
Yes, it's definitely a big topic.
And, you know, uh just hearingyou talk about uh and ask the
question, are they ready?
It's just amazing to me, havingbeen in this conversation for so
long.
In one of your recent posts, youyou referenced the
post-secondary value commissionwork and some of the other work
(06:07):
that's been going on for a longtime.
And this conversation abouteconomic mobility, about adding
another metric to what we wouldconsider success, the
post-secondary level, has beengoing on for quite some time.
I mean, my my hair was a lotdarker when I served on the
post-secondary value commission,and and this conversation was So
(06:30):
I should thank you for thisreport that came out.
Yeah.
I mean, even back then there wasconversations about increasing
the value, being concerned aboutthe erosion and confidence in
the value of a degree.
And this was, geez, at least 10years ago.
I lose track of time these days,but it feels like a million
(06:53):
years ago that that conversationwas getting started.
I also reflect and think abouthow it felt when in the early or
mid-2000s, well, not mid-2000s,I'd say you know, 2006, 7, 8,
when conversations aroundcompletion were creeping into
(07:14):
the conversation and and howmuch backlash there was to even
contemplate completion as ametric of success, particularly
at the community college level,where there was always this
notion that we serve too manymissions, we can't we can't be
held accountable to one specificmetric of completion.
(07:37):
So I I give that backdrop onlyto say that I'm always skeptical
when I hear higher educationleaders push back on a new
metric of accountability.
But at the same time, I'll beginby saying I agree with you that
there are challenges in thecurrent data and the way the
(07:58):
metric is devised.
But before I get into all mythoughts, let's start with you.
Tell us about your concernsabout the federal accountability
framework, specifically theeconomic metric, the metric that
measures earnings, and what youthink some of the unintended
(08:19):
consequences if it goes intoregulation the way it reads
today.
SPEAKER_00 (08:26):
Sure.
And I'll start out with sort ofthe general concept.
I'm in agreement that we've beentalking about outcomes
completions.
SPEAKER_02 (08:34):
Right.
SPEAKER_00 (08:34):
And now we've been talking about economic returns
for graduates for a long time.
The difference is now we'retalking about accountability, as
in programs potentially losingaccess to federal financial aid
loans.
And I think it's needed, to bequite honest.
So I'm a supporter of theconcept.
Uh-huh.
(08:55):
So having said that, most of mycriticisms have been on the
chosen metrics, the way thatwe're planning to implement
them.
And gainful employment andfinancial value transparency
became regulation in 2023, thelatest version of it.
And the earnings premium was oneof two metrics that get applied
(09:17):
there.
And that just simply says, whatare the earnings of your
graduates completers, sincewe're talking undergraduate
certificates quite often, threeyears after they finish a
program.
And let's compare that to highschool, no college people age 25
through 34 within one state.
(09:37):
That same metric, the earningspremium, got implemented by law
with uh OB3, uh, one bigbeautiful bill.
And so now everybody's gonnahave to live with it.
The difference is it's fouryears versus three, some minor
differences.
So, what are my fundamentalobjection?
(09:57):
Well, I guess I have two.
One is that's only one metric.
It doesn't even take intoaccount debt, it doesn't take
into account program cost.
There's a lot of things having asingle metric is one of my
biggest complaints because thatputs a huge burden on that one
way of viewing things, andyou're gonna have tons of
(10:19):
unintended consequences.
What I've written more about isthe fact that the chosen metric
and the way it aggregates data,it might seem sort of pedantic
or data focused, but I thinkit's important because it's
comparing your median earningsof a specific program, a group
of 35, 40 students in thisparticular two-year period.
(10:43):
What are their median earnings?
But to get to the concept of didyour college degree add value,
you have to have a comparisongroup.
Right.
And the comparison group isaggregated across an entire
state, and it's for ages 25through 34, and it ignores all
other demographics.
(11:05):
So that's just a fundamentallymisaligned metric in the way
it's going.
And two examples states, regionswithin a state have different
income levels.
So your state, California, usedto be my state.
You're always welcome inCalifornia, Phil.
Sure.
Well, for visiting.
(11:25):
I don't want the taxes.
But there's a plus or minus 20%difference depending on what
part of California you're incompared to that median
comparison group.
So what that means is if you'rein a rural, it's not always
rural, but if you're in alow-income area of the state,
which often means you're servingdisadvantaged students, lower
(11:47):
income students, those schoolshave an additional 20% burden,
up to a 20% burden, just to passthe metric because they're in a
naturally low-income area, butthey're getting compared to the
statewide median.
So what's an unintendedconsequence?
You're going to have a lot moreprograms in rural low-income
(12:10):
areas failing simply because ofwhere they are than people are
expecting.
And that's poor public policy.
And a quick example, there areother demographic issues, such
as female versus malecomposition, has whatever the
reasons, that also has a plus orminus 20% difference.
(12:32):
And you're ignoring that.
So the example I use, let's sayyou're a woman in McCallan,
Texas, and you see a programthat my nominal income is a high
school graduate, I'm going tomake$20,000 somewhere.
Let's just say that I take someprogram and I boost my earnings.
That's what we're trying to gofor.
(12:54):
But because the comparison groupincludes Austin, Dallas,
Houston, it's a statewide media.
The program I'm taking, it mightbe doing me a lot of good, but
it might fail simply becausewhere I am and ignoring the
demographics.
So that's the fundamentalargument, is it's a poorly
designed metric that misses thebiggest variations.
(13:18):
And once we see what happens, Ican already tell you it's going
to be predominantly the openaccess public, you know,
low-income areas that suffer themost.
And I'm not trying to say, oh,they all should get a pass
because they're low income, butsmart public policy should take
these things into account.
(13:39):
So that's my fundamentalargument here.
SPEAKER_02 (13:41):
I've certainly heard that that argument in other
circles.
Part of the problem is the datathat the federal government has
to do this calculation.
I mean, I think that's that'sanother part of this is what
data are they going to use?
There's always this questionthese days about are we going to
(14:02):
have federal data to draw from?
Are we not?
Is this is the college scorecardgoing to be there?
Is it not?
And there's always been thisargument that virtually every
data metric that the federalgovernment has used is flawed
because of the data that they'reusing, whether it's iPads data,
whether it's college scorecarddata.
(14:23):
So, yes, I mean I wouldfundamentally agree that the
data is not great.
And so, like you, I'm I'mhopeful that this conversation
can be had in negotiatedrulemaking.
I'm not going to hold my breaththe way that rulemaking is.
SPEAKER_00 (14:40):
If you release this podcast by then, it might change
the game.
Right.
Actually, if you don't mind mejumping in, there's a
difference, fundamentaldifference, data available
versus the chosen data for ametric.
So, for example, on thegeographic, you know, substate
regions and the you know,capturing the income differences
within a state, that data isavailable.
(15:02):
It's actually available withinthe same data sets that the
government's already accessing.
So it's not the geographic area,it's simply a matter of they
chose not to define it in a verysophisticated way.
It's not a data availability.
I go on the ACS data, all youhave to do is click one thing
(15:23):
and you also get the region.
And the computing zone is thebest one.
So I don't want to go into toomuch detail on one issue, but I
just want to point out there's adifference between I agree data
is not per data is not perfect.
However, data available andchosen data within the metric,
there's a big gap.
That's more what I'm interestedin.
SPEAKER_02 (15:44):
I completely agree with that point.
In my mind, it even goes onestep further, which we're not at
that step yet.
And and my hope and a lot ofwork that's being done in DC
right now with differentorganizations is to take that
next step, which is to reallybring this down to the state
level and really get states tohave robust data systems where
(16:06):
they could do an even better jobthan the federal government
could do.
I know we're not there yet, andwe're still quite a ways away,
but my hope is that that's wherewe where we eventually get.
Because when we did similaranalysis in California, as you
well know, we partnered withMichael Iskowitz from HEA Group.
(16:28):
We've done a number of differentreports.
We did a California MobilityIndex that measured mobility for
the four-year institutions inCalifornia.
We did a programs that payreport that focused on programs
of study and the return oninvestment in those programs of
study.
We've done reports on return oninvestment for the two-year
(16:48):
institutions.
And that's where we really foundthe challenge.
We could not duplicate themobility index that we did for
the four years because of thehuge regional differences that
community colleges exist in inCalifornia and every state for
that matter.
And the challenge you have withPell uptake in community
(17:12):
colleges.
Many community colleges, and Idisagree with this notion and
I've argued against this notionfor years, but most community
colleges are not designed tomaximize Pell uptake for their
low-income learners.
And therefore, it's hard toreally measure the amount of
low-income learners that you'reserving, what their earnings
(17:34):
are.
So I do think that there isquite a number of issues that we
still need to tackle, as youpointed out.
And hopefully some of those willbe ironed out in rulemaking, but
I think ultimately these aregoing to have to be ironed out
by systems and organizations,the ASCII's of the world, the
(17:55):
ACCTs of the world, and states.
Because I agree with anotherpoint you made that many, if not
most, institutions were slow towake up to what this was going
to mean, which is why CollegeFutures published the report
early this year to just give ahighlight to people what this
(18:16):
was going to look like.
And we had places like ComptonCollege, which showed some
pretty poor return on investmentmetrics compared to some of the
other institutions in the LACounty area.
But if you take a look locally,one, the job market is not as
great in that region.
Two, the programs of study arenot well aligned with the jobs
(18:38):
that are available.
So all those things willhopefully create a conversation
that will lead to a bettermetric.
But we'll see.
Hopefully, like you said,somebody at Ed will listen to
this podcast and give this somethought.
SPEAKER_00 (18:55):
And if you don't mind me adding just one other
point that's sort of theopposite side of the argument,
it's why this is important.
And it gets to your point aboutthere's always people arguing
against even the concept.
Is I find it, to be quitehonest, disingenuous how many
people who were arguing.
This sounds pretty pointed, butI'm going with it, that hey, the
(19:16):
masters of social work shouldhave been included in a
definition of a professionaldegree so that students could
borrow up to$200,000.
And I heard that argument, andI'm like, are you kidding me?
Your argument is could we pleaselet social workers run up more
than$100,000 in debt?
(19:37):
That's your argument.
So my point is, yes, there'sgoing to be some of the
resistance that's conceptual innature.
And I think there's a need tosay, sorry, you're going to have
to find a new way of figuringthis out.
So hopefully that won't get youin trouble that I mentioned that
example.
SPEAKER_02 (19:54):
No, it won't get me in trouble.
I've already been in troubleoften enough over these issues.
And specifically with aparticular institution here in
California that is famous fortheir social work program.
Okay, we'll say no more.
SPEAKER_00 (20:08):
Most people have figured that out.
SPEAKER_02 (20:09):
But but no, I think I think your point is well
taken.
These are the kind of argumentsthat tend to pop up in moments
of increased accountability,calls for increased
accountability.
But you know, I just think ifyou're an institutional leader
and you're still fighting thisfight on that level, I'm not
saying that we shouldn't fightthe fight over what is the right
(20:30):
metric, what is the right data,to your point.
But if you're still arguing thatwe can't have this kind of
accountability, then you havenot been listening to what's
going on across the country.
SPEAKER_00 (20:42):
And I think this is part of what you're saying.
And and don't assume that it'scaught up in polarization
because it's a bipartisan movetowards accountability.
SPEAKER_02 (20:52):
And we'll jump into the the graduate student loan
conversation in a minute.
But when I was in thoseconversations in DC, one thing
that became clear to me earlyon, way before you know the big
beautiful bill came about.
SPEAKER_00 (21:09):
I think the cool kids call it OB3.
SPEAKER_02 (21:11):
OB3, yes, yes, and that's why I don't call it OB3.
But one thing that became clearwas that this frustration with
graduate student loan borrowingwas bipartisan, cross-isle, you
know, this was going to happen.
And I warned my colleagues earlyon that if this is a point of
(21:34):
bipartisan agreement in theSenate, guess what?
Then this means that there is alot of support for this
direction.
So anybody caught by surprise bywhat happened to the graduate
student loans has not beenpaying attention or reading the
writing on the wall.
Those are frustrations that Ifrequently have.
(21:54):
I just don't understand whatuniverse sometimes our
educational leaders are livingin.
But nevertheless, there arereports that come out every week
about uh economic mobility,return on investment, uh,
programs that pay.
You know, the Georgetown Centeron Education in the Workforce
(22:15):
recently has come out with a fewreports.
Most recently, baccalaureateprograms of study and whether or
not they pay off.
Based on what you've seen, doyou see anybody that you think
is doing it better than othersin terms of publishing the data,
something that the federalgovernment could point to?
SPEAKER_00 (22:34):
Well, I think at the Georgetown CEW, part of their
benefit is they've been doingthis for a while.
They've been exploring it fromdifferent angles.
And so they were an early leaderto look at both the education
and the workforce side and howthey connect together.
So I give them a lot of creditjust for their long-term
(22:55):
commitment to this issue.
I think the underlying data, theUniversity of North Carolina
system that did that big reporta couple of years ago, I felt
that some of their conclusionswere a little bit watered down.
But the data collection and theway they viewed it, I thought
that was quite good.
(23:16):
And it was statewide and itlooked at all the colleges
within the state.
The Texas Higher EducationCommission, that they are not
just doing research studies.
It ties into funding in Texas.
So I would argue they're aleader into the accountability,
not just the concept, butactually tying it to funding.
(23:37):
So I would point them out.
And then also go back to thatreport that you mentioned.
I really appreciated thePostsecondary Value Commission
funding the University ofWisconsin researchers and
looking at one metric.
So they're not doing an overallhere's the total return on
investment.
They just provided a veryactionable, useful research
(24:00):
report on the subject thathelped explain things in neutral
terms and hopefully will reallyinform what's happening in DC
starting in December.
So those are a couple that Iwould point out.
I I see a lot of snippets hereand there that are useful.
Yes.
But there's a lot of need to getthe word out, not in a marketing
sense, but to make sure peopleare understanding.
(24:22):
There's almost a before 2026 andan after 2026.
That's one of the key messages,is we're moving into
accountability for nearlyeverybody.
As in, you could lose youraccess to federal financial aid
loans.
That changes the game fromresearch report and dashboards
(24:44):
into, ooh, we better payattention.
So that's part of the reason I'mreally harping on the importance
of what's about to happen andthe long-term work you're
mentioning that you've beeninvolved in, I think it really
changes next year.
SPEAKER_02 (25:00):
I I agree.
And I definitely think it istime for institutions to pay
attention to this because it isgoing to creep up on them.
And if they don't make theirvoices heard now, I mean, we're
we're in an era of negotiatedrulemaking that's a little
different than what it was inthe past.
Now, we can always argue thatdepending on which
(25:20):
administration you have, there'sa slant in the negotiating
rulemaking.
But based on what I just sawwith the graduate student loans,
the department comes in with avery specific point of view.
So institutions and theiradvocacy organizations better
(25:42):
speak up now and betterparticipate.
SPEAKER_00 (25:44):
And I'd also point out, I think there's something
unique, and that this was theRISE committee that just
concluded two weeks ago.
That was the only the secondnegotiated rulemaking and
education that actually reachedconsensus for the full package
in the past decade.
So we already know that thelanguage was captured by that
(26:06):
group.
Now, part of the reason Imentioned that, each
administration has differentpriorities, but I think there's
also a negotiating tactic thatthe Trump administration is
doing.
Yes.
Where they said the consensuswas for the whole package, not
for individual topics.
Right.
And I think they used that tosort of, well, they definitely
(26:27):
did to strong arm into aconsensus.
They use pretty sophisticatednegotiating because they
explicitly said at the end, allright, this isn't perfect, but
if we don't reach consensus,you're going to lose all these
other things that we did agreeon.
And that was, I'm not trying todefend it or criticize it, but I
(26:48):
am pointing out it's actuallypretty different.
And I think people need to beaware that I expect this
upcoming rulemaking to havesimilar negotiating tactics
behind that we haven't been usedto.
SPEAKER_02 (27:02):
I certainly agree with that.
Let's continue talking aboutfederal policy and the most
recent rulemaking regardingthings like graduate student
loans.
Based upon what you've seen inthe marketplace, well, and let
me take a step back.
I mean, I'll I'll put my bias onthe table.
Having spent a lot of timeeither on the UC Board of
(27:25):
Regents or watching the wholedebt crisis come about, whether
my time in DC or in other rolesthat I've had, this has
definitely been a point offrustration for many people on
both sides of the aisle.
My experience on the UC Board ofRegents was that year after year
we kept seeing more and moregraduate programs come to the
(27:46):
board to seek professionalstatus because that allowed them
to then charge what in the UCwhat we call professional fees,
fees on top of the usualtuition.
So they were more expensive.
But I've seen a proliferationover the years of what some call
(28:08):
or try to call professionalgraduate degree programs and
thus charge a premium for them.
We saw that in the example thatyou just mentioned, social work,
which clearly, if you look atthe earnings of a social worker
or a person employed in a countyor a city here in California,
(28:30):
it's virtually impossible to payback that loan based on the
earnings that you're going tomake over your your lifetime,
particularly if you're gettinginto that field of study, that
field of work in your late 20s,early 30s, some of them in their
40s.
So I understand the deepfrustration that people have
(28:52):
with the amount of debt that wasbeing accumulated and the lack
of economic return for that debtfor graduate programs.
Based on what you're seeing, howdo you think that this is going
to impact colleges anduniversities that offer graduate
programs and particularlyprofessional programs?
SPEAKER_00 (29:14):
I think it's going well, cross-subsidies.
That's what's going to take ahit.
Yeah.
Is if you look at it on aprogram-by-program basis and
argue about professional status,I think that's missing the big
story.
I mean, it's important.
But the reason these programsare proliferating is these
universities want to have thatmoney and they use a lot of it
(29:36):
for cross-subsidizing otheruniversity operations.
So I think the biggest impact isgoing to be on universities at
large, not just on individualprograms.
You'll see things like SantaClara University, which is
private, but you know, younotice they just changed, they
created a grant or a guaranteedgrant of some type.
(30:00):
That put them right at the limitof the new loan limits.
And I think we're going to seemore of that, where schools are
saying, we recognize theimportance of we better not go
above this dollar amount, orelse we're going to have a real
problem.
So I think you'll see more ofthat, but the bigger impact will
be university-wide.
And you can criticize, or mybiggest criticism is how is
(30:26):
theology in there as one of theprofessional programs right now,
yet airline pilots, wherethere's a clear path to payback,
it's not in there.
So I think that's an example,the biggest example of why is
this considered professionalinstead of this?
SPEAKER_02 (30:43):
I don't know.
It should make you scratch yourhead.
And that that's where this thisindustry, my industry, has had
too many of these moments whereyou're doing things and the rest
of the American public sit thereand scratch their head.
SPEAKER_00 (30:58):
Yeah, exactly.
So there's that.
But the overall impact, it isgoing to force these graduate
programs, whether they gotprofessional status or not, to
start actively managing it.
And what that's going to leadto, I think, along with the
accountability, the combination,is now at the leadership level,
(31:21):
presidents, their board, theirboard, their C-suite, the
provost, at that universityleadership level, the CFOs,
they're going to need to startdoing portfolio management
instead of just handing off somuch of that to individual
colleges, deans, and departmentchairs.
So it's going to raise portfoliomanagement up.
(31:44):
And a big topic will be wait,why are we charging this much?
That's going to cause thisproblem.
You know, what's going to happento our cross subsidies?
So and overall, I mean, from apersonal standpoint, that's a
good thing.
I think we should be havingthese conversations.
SPEAKER_02 (32:00):
We should be having these conversations.
And my fear, although it'swouldn't characterize it a fear,
it's it's going to be a naturalreaction in addition to the
things that you just mentioned.
I think one, there'll be morepressure on deans to fundraise
outside of, you know, chargingtuition to maintain their
programs.
(32:20):
Two, there's already a lot ofdiscussion about coming up with
private financing mechanisms forsome of these programs.
I I hear this a lot coming up inlaw programs these days.
And the concern that the CAPwill restrict the amount of
low-income learners that canaccess top-tier law programs.
(32:46):
Although I'm not sure thattop-tier and having to charge
that much always goes together,but apparently in the legal
industry it does.
Do you have similar concerns?
Are we going to see a lot moreprivate financing schemes come
up?
SPEAKER_00 (33:03):
Well, concerns on how it's managed.
Will it be like it was in the2000s?
And some of the loans wereexorbitant and such high
interest rates that even if youget people into this, they're
going to have a lifetime ofdebt, even worse than going
through the federal program.
Yeah, so I'm concerned aboutthat.
I've talked to a few schools,and maybe this is Pollyanna,
(33:27):
that is hoping that part of whatwill happen is universities will
get creative on, okay, I as auniversity will find a way to
back a loan.
So the loan's from the privatesource, but because the
university is backing it, itcould be a lower interest rate
and a better way to helpstudents who need to have it.
(33:47):
That's what I hope we see, asopposed to just a return to what
we were seeing in the 2000.
So do I have a concern?
Yes.
But to be quite honest, I have abigger concern if we did nothing
about it.
So not trying to be heartless,but yeah, I it's a secondary
concern.
I think the bigger problem is Ithink there should be downward
(34:09):
pressure on the prices of theseprograms.
Agree.
In the end, that's what's goingto actually help lower income
students more than the near-termpain that we're going to see.
SPEAKER_02 (34:22):
So I hope that this sort of is a reckoning, and to
your point, that it drives downthe cost of these programs.
Yes, they will always beexpensive programs, but I think
if we relook at the way that wedeliver the teaching and
learning in programs,particularly as archaic as law,
(34:42):
rethink what good quality is andfind ways to lower the cost.
I think that's a goodconversation for academia to
have right now.
Let's jump into one last topicbefore we wrap up.
You spent a lot of time lookingat the ed tech marketplace, you
spent a lot of time looking atonline programs, and while some
of this other news has sort ofhas drowned out some of the
(35:05):
other things that have beengoing on for quite some time.
I I want to focus a little bitof attention on what's happening
with OPMs, online programmanagement companies.
There was sort of this shakeoutuh about a year or two ago, you
know, all the concerns about theyou know 2U and and some of the
(35:26):
other OPMs.
There was a lot of pressure puton them.
I think there was a bit of ashake out.
Where do you see the OPMmarketplace right now?
And do you see that it's stillunder pressure from consumer
advocacy groups?
SPEAKER_00 (35:40):
Well, I'll answer the second question.
Yes, they're still underpressure from advocacy groups,
but it's mostly now at the statelevel and not at the federal
level.
But we can get into that.
Where do I see it?
It's it's a it's a market inthat's in the middle of an
inflection point.
And keep in mind, 2U did not gobankrupt because of advocacy
(36:02):
groups.
They went bankrupt because oftheir debt management and their
acquisition of edX.
That's what led to them goingbankrupt.
Now they're out of bankruptcyand they've done a great job
with that.
But I'm waiting for them toactually say, well, here's the
revised strategy, here's who weare today.
(36:23):
I know they're trying toevaluate it, but my goodness,
it's more than a year afterbankruptcy, and there's no new
messaging coming out of that.
You have Coursera, who basicallysaid, our OPM business, we're
not pulling out of it, but itwe're not even going to
separately report it, and weknow that the revenues go down,
and we don't care.
So Coursera has effectivelypulled out of a lot of the OPM
(36:49):
market.
Wiley sold to academicpartnerships, became Rise Point,
and now they're the big player,which is pretty interesting that
they're the dominant.
That's not who I would havepredicted 10 years ago.
No offense to the leadershipthere, but I wouldn't have
predicted that.
So where you are now is a wholenew market leader that has sort
(37:11):
of flown under the radar from apolitical standpoint for a long
time, and I think they're doingfairly well.
They're getting attacked more atthe state level.
The most recent state withaction is likely Illinois, but
definitely the Minnesota law.
There was some action inCalifornia, but the Senate bill
got defeated that would havepartially impacted them.
(37:32):
So it's state-level issues theyhave to manage.
But the bigger issue for the OPMmarket is you can't run your
business the way you did 2015.
That's right.
Colleges and universities aredifferent.
They have a different set ofneeds now, particularly after
COVID.
So the market needs a reset, notnecessarily from policy issues,
(37:54):
but from market issues.
I've been disappointed thus faron seeing revised strategies and
models and strong bets.
You know who I do see that fromand who seems to be doing well
are the ones that we used toconsider partial OPMs or on the
fringe, you know, likecollegiate, Everspring,
(38:17):
Education Dynamics, Archer, sortof the second-tier type of
players.
They seem to be the more nimblecompanies in doing better now.
Now, I don't know how thatchanges the big players like
Risepoint, but I've seen moreinnovation there than I've seen
in the mainline OPM space.
(38:39):
So what am I watching?
There is state level policy, buta bigger question to me is
market demand.
And when and how will theyactually strategically change
their offerings to be ready forthe next 10 to 15 years and not
just living on what they used todo.
So it's a market that has notmade the changes it needs to
(39:01):
make yet, is the way I wouldcharacterize it.
SPEAKER_02 (39:04):
I would agree with that.
Clearly, in my view at least,there still is demand for the
services of OPM offer.
I just think about theCalifornia State University
system, it's in a huge holeright now, has enrollment
challenges, and it really needsto find its footing in being
able to reach learners outsideof the brick and mortar.
(39:26):
So there is still a need, thereis still demand, but I agree
that the the formula needs tochange in order to keep up with
the changes in the type ofdemand and the marketplace.
And I think once and for all,they need to solve this issue
that keeps coming up aroundtransparency in terms of who the
(39:49):
learner interacts with and dothey know what's what's
happening.
SPEAKER_00 (39:53):
Well, that then look at the state level.
In Ohio, you should be happythen because the initial bill
produced in Ohio was a draconianideological, let's kill OPM.
Right.
There's no two ways about it.
That's how it was introduced.
The Ohio Senate really, it wasalmost like the adults came in
the room and said, no, we'regoing to take what you're what's
(40:15):
really needed and come up with amore effective bill.
And the centerpiece relating toOPMs is transparency.
Let's make sure it's obvious whoyou're talking to.
Do they work for the university?
Do they work for a third-partycompany?
So I I assume you like the waythe Ohio built.
SPEAKER_02 (40:33):
I I do.
I think my my biggest issue isjust it's the transparency.
Just answer the fundamentalquestions.
The learner should know whothey're interacting with, and
you know, the public should knowwho's paying for what.
Uh particularly if it's a publicinstitution.
If it's a private institution,well, that's that's a different
(40:54):
ballgame.
But any public institution, itthere just should be clarity and
transparency, both for the sakeof the of the college or the
university, but also for thesake of the of the vendor, the
partner.
I I just think it's it's just acleaner transaction.
There is a need, there isdemand, there is expertise.
(41:15):
Colleges and universitiescontract for expertise all the
time, every day.
So this is not something unique.
Just be transparent about howit's working and make sure the
learner knows who they'reinteracting with and and where
they they can get support.
So those are my only issues, andand I hope that this is
(41:36):
something we can resolve becausemany, particularly public
regional universities and a lotof the privates, the small
privates, are really sufferingright now.
And they they need a differentstrategy.
They need to figure outdifferent revenue.
SPEAKER_00 (41:49):
I'll add one at the risk of I know we don't have
time to go down this rabbithole, but it's a big rabbit
hole.
Gen AI.
You don't want to rely onindividual schools having to
figure out what's changed in thepast month and how does that
impact the ability to do anonline program.
So I'm seeing an increasingdemand for OPMs or related
(42:12):
companies who can help say,here's where Gen AI is going,
and we're going to help you takeadvantage of it and not get hurt
by it, ideally.
But my point is, I actuallyagree there's demand, and I'm
even seeing increasing demandonce you throw Gen AI in the
mix.
The question is, well, policytransparency that you mentioned.
(42:33):
But the other question is, thesecompanies need to update their
models so that they can meetthis new demand.
SPEAKER_02 (42:40):
Agreed.
And maybe we will come back atanother time when we give you
your robe that has the numberfour on it, just like Saturday
Night Live does for their hosts.
Yes, um, and we can talk aboutGen AI, but that's for another
episode.
Maybe after we survive theASUGSV summit, we'll come back
(43:00):
and talk more about that.
Yeah, good.
And I look forward to seeing youthere.
All right.
Well, Phil, thank you for beingwith us again.
And as always, thanks for yourinsights and for just leaning
into these issues every singleweek.
I enjoy reading all your piecesand your newsletter.
SPEAKER_00 (43:18):
Well, thank you very much.
As always, I have fun talking toyou, and it's great to jump into
meaningful, deep conversationsright away.
So thank you.
SPEAKER_02 (43:27):
All right.
Well, thanks for joining us,folks.
You've been listening to myconversation with Phil Hill.
Phil's a higher educationconsultant.
He's also the editor of the Philon EdTech newsletter, which
everyone should be reading.
I'll put a link to where you canaccess the newsletter in the
notes section of this podcast.
If you're watching us onYouTube, please hit subscribe,
(43:47):
continue to follow us, and ifyou're listening to us on your
favorite podcast platform,download our episodes and
continue to follow us.
Take care, everybody, and we'llsee you all soon.
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