May 30, 2023 • 7 mins
This episode wraps up the series of episodes regarding the April 2023 Department of Education proposed changes to the definition of a Third-Party Servicer and changes to the Dear Colleague Letter addressing bundled services and revenue share agreements. This is also My RANT on the OPM industry
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Episode Transcript
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Detached audio (00:09):
Hi, this is ILO Ortiz.
Oakley.
Welcome back to the ramp.
The podcast where we pull backthe curtain and break down the
people, the policies, and thepolitics of our higher education
system.
The last several episodes havefocused on the changes that the
Department of Education proposedto the definition of a third
party servicer and the changesto the dear colleague letter.
(00:32):
Addressing bundled services andrevenue share agreements.
I hope that you've enjoyed theseepisodes and I want to thank my
guests who gave their insightsand their expertise and their
passion to this issue.
I want to thank Bob Charman.
Samir Katari.
Claire McCann, Michael Horn, andof course Paul Leblanc, all for
(00:53):
taking the time out of theirbusy schedules to give us their
insights and their thoughtsabout how to better craft
federal regulation that balancesthe need for consumer protection
and for innovation.
I hope that you can see fromthose interviews how difficult
it is.
To balance consumer protectionand innovation.
(01:14):
Nonetheless, this is the jobthat the Department of Education
has, and while they have notreleased their final language as
of the recording of thisepisode, Under Secretary Qu has
committed to coming onto theshow once the final language is
out there, and we'll have achance to talk to him about that
final language and how hebalanced innovation in consumer
(01:38):
protection.
I wanna thank the team at theDepartment of Education, in
particular under Secretary Qual.
Throughout these last severalmonths, I have personally seen
him reach out to severalaudiences, innovators, consumer
protection advocates, students,institutional leaders, people of
all backgrounds.
(01:58):
although there might not alwaysbe agreement, I do want to thank
the department for all the workthat they've done, and I look
forward to seeing the finallanguage in print.
And we'll invite theundersecretary back on the show
to talk about.
That final language and alsoperhaps get into gainful
employment because that hasalready begun to ramp up, and
(02:19):
that'll be a focus of severalepisodes in the future for the
rant.
So here's my rant on this issue.
As you can see, it is verydifficult to balance consumer
protection and innovation, butit is something that we need to
do in order to provide ourlearners the very best.
(02:39):
Technology, the very bestinnovation in the way that we
deliver education, the way thatwe support students in their
educational journey, but also,Balance their need to have
certainty, to have protection.
When they sign up for a program,they know what they're getting
into.
They know that institution X isgonna be providing them the
(03:01):
education and the studentservices that they expect from
Institution X.
Not being handed off toinstitution Y without, without
any knowledge of what's goingon.
And we are in this situationbecause of a failure along the
way, a failure in the incentivesof for-profit institutions.
I think my guest, Bob Sharmanput it well when he talked about
(03:24):
how not all for-profits.
Are bad actors and many startedout as good actors.
I think a great example is theUniversity of Phoenix.
The University of Phoenix,started out wanting to serve
students well, and they did.
Somewhere along the way, theylost a way, whether that was
because their investors weredemanding greater profits,
(03:45):
whether they needed a greaterrate of return or whatever the
incentive structure was thatmade it fall off the rails.
And something similar hashappened to the OPM industry,
particularly those OPMs that arevery well known today.
Those OPMs that have growntremendously over the last
several years and have openlyflaunted their profits, I think
(04:08):
they have fallen off the rails,one player in particular who
openly is out there talkingabout the challenges that they
face.
Because the federal governmentis trying to regulate the
marketplace, and they suddenlyspeak for the entire
marketplace.
and they suddenly feel empoweredor perhaps suddenly have hubris
(04:29):
to pretend that they know whatis best for the marketplace.
And that's where things begin tofall off the Rails, profits go
up.
The incentive structure beginsto change the people they are
hiring to go out and findstudents to place in programs.
The incentive structure beginsto break down, and that's where
(04:50):
federal regulation is necessary.
My guess Michael Horn put it,well, when he said, innovation
isn't about just throwingspaghetti on the wall and hoping
it sticks.
It's actually about doingresearch, doing the work behind
what students need, and actuallyhelping them better learn and
succeed in their post-secondaryjourney.
(05:11):
Not just making that a secondarypart of the business model, but
the primary part of the businessmodel.
That's true innovation So whatdo we need in the marketplace?
We need the Department ofEducation to put up guardrails,
to actually create transparency.
And this isn't just about theinnovators.
This is about institutionalleaders, title four institutions
(05:33):
that need to create bettertransparency and take
responsibility for theagreements that they actually
sign.
My guess Paula LeBlanc put itwell, it is a responsibility of
the, of the institutions aswell, and transparency is not a
bad thing.
Transparency leads institutionsto do the right thing So I hope
(05:57):
that you've enjoyed theseepisodes and I look forward to
the department's work and thedebates that'll ensue once a
department actually puts out itsfinal language around this
issue.
I know that this has been.
To some, an interesting issue tosome, a confusing issue, but it
is an important issue because itis a marketplace that we live
in, and the Department ofEducation, as well as the
(06:19):
innovators and the institutionsthemselves are part of this
marketplace, and it is whatcreates and sustains and
supports innovation in teachingand learning, and the way we
think about serving learners andthe way we think about
democratizing post-secondaryeducation.
To Americans of all backgrounds.
So I hope you've enjoyed theseries of episodes.
(06:40):
The next series will be aboutinnovators themselves.
I had the chance to spend somedays at the recent A S U G S V
conference, ran into severalinnovators.
I'll have a chance to talk tothem and share those interviews
with you.
And I'll end with the co-founderherself, Deborah Cuso, to
talking about.
(07:01):
What led her and her team topartner with ASU and where they
go from here.
So I hope you join us for thoseseries of episodes.
Thank you for joining us on theRant.
If you like this episode, hitthe like button.
Leave me your comments.
Let me know what you thoughtabout this series of episodes
and what you'd like to hear inthe future.
If you like the YouTube channel,subscribe and follow us on your
(07:23):
favorite podcast platform.
Thanks for joining us on therant, and we'll see you soon.
Hi, this is ILO Ortiz.
Oakley.
Welcome back to the ramp.
The podcast where we pull backthe curtain and break down the
people, the policies, and thepolitics of our higher education
system.
The last several episodes havefocused on the changes that the
Department of Education proposedto the definition of a third
party servicer and the changesto the dear colleague letter.
(00:32):
Addressing bundled services andrevenue share agreements.
I hope that you've enjoyed theseepisodes and I want to thank my
guests who gave their insightsand their expertise and their
passion to this issue.
I want to thank Bob Charman.
Samir Katari.
Claire McCann, Michael Horn, andof course Paul Leblanc, all for
(00:53):
taking the time out of theirbusy schedules to give us their
insights and their thoughtsabout how to better craft
federal regulation that balancesthe need for consumer protection
and for innovation.
I hope that you can see fromthose interviews how difficult
it is.
To balance consumer protectionand innovation.
(01:14):
Nonetheless, this is the jobthat the Department of Education
has, and while they have notreleased their final language as
of the recording of thisepisode, Under Secretary Qu has
committed to coming onto theshow once the final language is
out there, and we'll have achance to talk to him about that
final language and how hebalanced innovation in consumer
(01:38):
protection.
I wanna thank the team at theDepartment of Education, in
particular under Secretary Qual.
Throughout these last severalmonths, I have personally seen
him reach out to severalaudiences, innovators, consumer
protection advocates, students,institutional leaders, people of
all backgrounds.
(01:58):
although there might not alwaysbe agreement, I do want to thank
the department for all the workthat they've done, and I look
forward to seeing the finallanguage in print.
And we'll invite theundersecretary back on the show
to talk about.
That final language and alsoperhaps get into gainful
employment because that hasalready begun to ramp up, and
(02:19):
that'll be a focus of severalepisodes in the future for the
rant.
So here's my rant on this issue.
As you can see, it is verydifficult to balance consumer
protection and innovation, butit is something that we need to
do in order to provide ourlearners the very best.
(02:39):
Technology, the very bestinnovation in the way that we
deliver education, the way thatwe support students in their
educational journey, but also,Balance their need to have
certainty, to have protection.
When they sign up for a program,they know what they're getting
into.
They know that institution X isgonna be providing them the
(03:01):
education and the studentservices that they expect from
Institution X.
Not being handed off toinstitution Y without, without
any knowledge of what's goingon.
And we are in this situationbecause of a failure along the
way, a failure in the incentivesof for-profit institutions.
I think my guest, Bob Sharmanput it well when he talked about
(03:24):
how not all for-profits.
Are bad actors and many startedout as good actors.
I think a great example is theUniversity of Phoenix.
The University of Phoenix,started out wanting to serve
students well, and they did.
Somewhere along the way, theylost a way, whether that was
because their investors weredemanding greater profits,
(03:45):
whether they needed a greaterrate of return or whatever the
incentive structure was thatmade it fall off the rails.
And something similar hashappened to the OPM industry,
particularly those OPMs that arevery well known today.
Those OPMs that have growntremendously over the last
several years and have openlyflaunted their profits, I think
(04:08):
they have fallen off the rails,one player in particular who
openly is out there talkingabout the challenges that they
face.
Because the federal governmentis trying to regulate the
marketplace, and they suddenlyspeak for the entire
marketplace.
and they suddenly feel empoweredor perhaps suddenly have hubris
(04:29):
to pretend that they know whatis best for the marketplace.
And that's where things begin tofall off the Rails, profits go
up.
The incentive structure beginsto change the people they are
hiring to go out and findstudents to place in programs.
The incentive structure beginsto break down, and that's where
(04:50):
federal regulation is necessary.
My guess Michael Horn put it,well, when he said, innovation
isn't about just throwingspaghetti on the wall and hoping
it sticks.
It's actually about doingresearch, doing the work behind
what students need, and actuallyhelping them better learn and
succeed in their post-secondaryjourney.
(05:11):
Not just making that a secondarypart of the business model, but
the primary part of the businessmodel.
That's true innovation So whatdo we need in the marketplace?
We need the Department ofEducation to put up guardrails,
to actually create transparency.
And this isn't just about theinnovators.
This is about institutionalleaders, title four institutions
(05:33):
that need to create bettertransparency and take
responsibility for theagreements that they actually
sign.
My guess Paula LeBlanc put itwell, it is a responsibility of
the, of the institutions aswell, and transparency is not a
bad thing.
Transparency leads institutionsto do the right thing So I hope
(05:57):
that you've enjoyed theseepisodes and I look forward to
the department's work and thedebates that'll ensue once a
department actually puts out itsfinal language around this
issue.
I know that this has been.
To some, an interesting issue tosome, a confusing issue, but it
is an important issue because itis a marketplace that we live
in, and the Department ofEducation, as well as the
(06:19):
innovators and the institutionsthemselves are part of this
marketplace, and it is whatcreates and sustains and
supports innovation in teachingand learning, and the way we
think about serving learners andthe way we think about
democratizing post-secondaryeducation.
To Americans of all backgrounds.
So I hope you've enjoyed theseries of episodes.
(06:40):
The next series will be aboutinnovators themselves.
I had the chance to spend somedays at the recent A S U G S V
conference, ran into severalinnovators.
I'll have a chance to talk tothem and share those interviews
with you.
And I'll end with the co-founderherself, Deborah Cuso, to
talking about.
(07:01):
What led her and her team topartner with ASU and where they
go from here.
So I hope you join us for thoseseries of episodes.
Thank you for joining us on theRant.
If you like this episode, hitthe like button.
Leave me your comments.
Let me know what you thoughtabout this series of episodes
and what you'd like to hear inthe future.
If you like the YouTube channel,subscribe and follow us on your
(07:23):
favorite podcast platform.
Thanks for joining us on therant, and we'll see you soon.
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