An Educated Guest

Speaker 1:
You’re listening to An Educated Guest, a podcast that brings together great minds in Higher Ed to delve deeper into the innovations and trends guiding the future of education and careers, hosted by the executive vice president and GM of Wiley University Services and Talent Development, Todd Zipper.

Todd Zipper:
Hello, I am Todd Zipper host of An Educated Guest. On today’s show I speak with Paul Fain, a well-respected journalist who has reported on education policy in the American workforce for nearly two decades. The key takeaways from our discussion today, first, how we can make non-degrees alternative credentials and apprenticeships more career connected at scale to serve everyone, especially historically underrepresented people. Second, how employers must do more to move the needle for their employees in terms of career mobility and diversity equity inclusion. Third, how to understand the motivations and challenges of recent big tech investments in non-degree credentials. Fourth, how and why community colleges have been struggling despite their pathway to affordable Higher Education. And lastly, what, including social mobility and DNI in Carnegie ranking system means for the future of higher education. Hello, Paul, and thank you for being here today on An Educated Guest.

Paul Fain:
Hey Todd, thanks for having me.

Todd Zipper:
All right. So you’ve been reporting on higher ed and the workforce for nearly 20 years. Can you talk about your time at Inside Higher Ed and the Chronicle of higher education and what led you to your latest venture?

Paul Fain:
Yeah, time flies. It’s hard to believe it’s almost been 18 years, but I started at the Chronicle covering the leadership in finance beat, really the college presidency, some of the scandals, lots of the kind of reorganization of budgets and priorities around the great recession. And then a little bit more than 10 years ago, went to Inside Higher Ed where my focus was non-traditional students, community colleges, emerging models like competency-based education. And I was an editor there too. So the pandemic kept us busy and amid that, it always kind of felt like the connections with the workforce was a piece of the beats that could be expanded. There’s just a lot going there as you know, whether it’s the focus on economic mobility and our outcomes funding. And when I left Inside Higher Ed, I decided to give that a whirl with my own newsletter and it’s been a year now.

Todd Zipper:
Well, congrats and good luck to you. I love reading your beat and you’ve got some angles that are right up to the alley that we’re working on at Wiley and here at An Educated Guest. And I want to jump right into this sort of career connected education model, specifically around non-degree credentials. I know there’s a lot of media around for years now, folks losing faith in the college degree. We can certainly debate that, but I know you hosted a seminar recently with Strada on the value of non-degree credentials. Feels like the market is massive, growing, also hard to define, one might call it the Wild West. I would love for you to define this space for us. What is the non-degree credential market in terms of size and cost and industry? Who are the major players? How do colleges play in this space? What are the outcomes in the area? However you want to define it for us, that would be great.

Paul Fain:
Well, it turns out that may be the hardest part, defining it, but yeah. Now, about five years ago, I did a report for Inside Higher Ed, 25,000 words on this topic. And that has got to be one of the hardest, most anxiety inducing reporting efforts of my life, just because it is impossible to get your arms around. It’s impossible, really to generalize and be accurate about anything in higher ed. And that’s particularly true about something this massive because it includes as you know well, everything from certificates that bachelor degree holders pursue. Certifications, that term alone we could spend the full hour on and barely make a dent. And I would encourage folks to look at a new report from Workcred about what that entails.

Paul Fain:
I mean, talk about the Wild West, you have just an enormous number of certifications. Some that are great that have value some that aren’t, and it’s pretty much unregulated. Then you have micro credentials that don’t really fit either a category, because they’re not really certificates in the traditional sense. Then you have alternative pathways that maybe don’t really come with a formal credential, like an apprenticeship or a bootcamp, but nonetheless, I would put in this category. So it pretty much encompasses everything that isn’t a degree, which is a hard thing to really define.

Todd Zipper:
Absolutely. And I would say a lot of the non-degree credentials, at least that I follow or study are career connected. Right? And that’s the one of the themes of today. And I guess I would like to dig a little bit with you around how do we think degrees can become more career connected? I know you recently wrote about this cool initiative with Spelman College and a partnership with Braven to take 500 sophomores each year over the next five years as a way to offer credit in that career connected area. They’re offering mentors, they’re offering different internships or access to internships, things that really connect what they’re doing in college to make sure that they sort of can be job ready and even have that right job to get that return on investment. So, I mean, that was just one example I wanted to throw out there that I know that you’ve highlighted, but what are you seeing around how degrees in colleges can be more career connected at scale?

Paul Fain:
Yeah. Great question. So to me, I kind of look at the things I cover in two big buckets and one of them being bachelor degree programs and how to get more value in the job market, whether it’s through working within intermediaries that are skilled and have a business model that works like Braven in helping students from underrepresented backgrounds land good jobs, which to me seems like it’s hard and it can be expensive, but a no brainer. I mean, why wouldn’t any institution want to do some of that? I know it’s still controversial in parts of higher ed that careers are part of at least the promise of a higher education, but it is. And I kind of just don’t really see that argument anymore, but that’s a big piece.

Paul Fain:
The other one that I try to cover, which is harder, frankly, to find examples at scale is for folks who don’t have degrees or have an associate degree. And I think for example, some of the more interesting apprenticeship models I’ve looked at, you’ve got, so let’s say in healthcare technology, basically an apprenticeship design for people who have bachelor’s degrees to get into that field after college. And frankly, even in that space, we’re looking at small numbers, but the numbers for folks who don’t have bad bachelor’s degrees are really small. That’s the really hard work. And frankly the one that gives me anxiety because I write about it a lot and you just don’t see many scalable programs that open that door to a good career for people who don’t have four year degrees.

Todd Zipper:
Yeah. You mentioned apprenticeships and I’ve talked a lot about them on this podcast and I’d love to get your take on this because we know this is something that’s really heavily embedded in many of the European economies. In the US we certainly have been doing apprenticeships for a long time, a lot around trade and vocations and it’s growing, supposedly. And now I know you’ve written about sort of apprenticeships in areas like technology careers, but it still seems really small. So what is it going to take to sort of break the levy here to make more apprenticeships a key part of the higher education model.

Paul Fain:
Yeah. I mean, there’s so many things in this country that make an uphill battle to make an apprenticeship an appealing path. And one of the biggest ones is I don’t think anyone really denies this. We do a terrible job of career exploration for young people, particularly non wealthy young people. I mean, everybody will tell you, you really need to start in middle school to do that. Right. And you want to encourage people on pathways that lead to good jobs and apprenticeships often are designed to be in those pathways. But right now I think most people still aspire for themselves or for their children to go to a four year college. And for good reason, it was the best way to write out this latest recession as we all saw by far.

Paul Fain:
So how do you encourage people to look at apprenticeships or even frankly, some of the fields where you’re most likely to see that, manufacturing, some healthcare pathways, big tech instead of the traditional college path without looking like tracking, right? We don’t want in this country generally to direct people towards something that’s seen as less than a four year college pathway. So obviously some really tricky issues, but the biggest thing is apprenticeships are expensive. When I ask promising apprenticeship models, why can’t you grow from 100 to 10,000 apprentices? It’s like it’s too expensive. The employers have to invest a lot in them. These are multiyear things here. And frankly, I think the way to get there probably would involve more government subsidies, which is a whole difficult topic as well.

Todd Zipper:
I guess you’re saying a good public private partnership approach might be the way to go here where you’re putting it on the employers, they might need to be incentivized a bit more around this model.

Paul Fain:
Yeah. And that’s where the rubber just hits the road over and over again and it’s fascinating. I’m pretty new to focusing this much on employers and talking directly to them about this. And I still have a lot to learn, but the issues are very similar to higher ed. To give you an example of the sort of pathway that’s the most exciting to me, it’s a bootcamp style, skills, training, intermediary, a nonprofit, there’s several of these out there that are really exciting that have connections with K12, are able to recruit students from underrepresented backgrounds, give them some of that essential workforce readiness training that then they place into a pre-apprenticeship, a shorter term apprenticeship. And eventually may be an apprenticeship.

Paul Fain:
And then they’re on their way, this is often in tech to a job that is in the middle class, which is what we’re all hoping for. Along the way, it’s such hard work. If you even talk to folks privately, it’s hard to get some of this on the record who work on this. The companies that are most progressive in the space that are the most sincere about putting dollars behind diversifying their workforce and trying to find new pathways other than the traditional four year degree, it’s like business unit by business unit. And I hear these just incredible and sad stories of even these companies will say, I just don’t think can hire many of these folks. It’s the same problem.

Todd Zipper:
Right? It’s one Z’s, two Z’s when we’re trying to solve for hundreds of thousands, if not millions.

Paul Fain:
But it’s a resistance based on the focus on the four year degree, it just turns out like one of the stats that’s just the most troubling. And I promise I try to be more positive the rest of the podcast, but the Gates Value Commission came out recently just fascinating, massive amount of reports of data in a giant report. But they had in Texas, the University of Texas system across the whole system, not just UT Austin. Latino males who earned four year degrees started ahead of high school only white males in terms of earnings and then eventually were passed. So it’s the labor market that also has the same barriers to folks that we see in higher ed. So you really can’t deal with this problem without looking at that on both ends and companies are going to have to change how they invest and how they hire and retain talent to open up some of these doors.

Todd Zipper:
So let’s jump into employer driven education as you just drew me there. Employers have always administered billions in tuition benefits specifically in the US, I think it’s something like $18 billion industry. And even more than that on training to upskill and reskill their workers. With the current talent shortage and the skills gap which we can certainly unpack here, it appears that employers are taking things to a whole another level. And then you’ve got these mega large market cap tech companies out there, for example that are leaning in with huge headlines. Right? So let’s just start with the first question. What are your thoughts on employers taking a more active role in the education of its employees?

Paul Fain:
Yeah. I mean, this is the main driver for why I am covering this because I believe that employers not only are more willing to do more here, but have to. This goes beyond altruism, there is some sincere altruism, but from a bottom line standpoint, you have 11 million open jobs. The new federal quits numbers just came in and like this month, the number of people quitting their jobs this last day of the month, it’s down, but it’s still like the third highest ever. So the great resignation, whatever you want to call it, everybody is rethinking their career pathway. Even me, it’s a thing and it turns out it’s not just privileged wealthy people who get to do that. And so I think employers are struggling. There’s a lot of turnover has increased and people are questioning, if you were working in hospitality during the pandemic, we’ve all seen the anecdotal and frankly, the numbers to back this up. Do you really want to go back to that right now that it was proven to be a volatile and difficult and dangerous profession during the pandemic and it’s a tough one.

Paul Fain:
So you’ve got people really thinking about moving and struggling to figure out how to do it. And so employers, especially if you’re a big company that is likely to automate a lot of people or frankly isn’t able to retain them, this is a serious problem for you. And then I haven’t even talked about the diversity problem, but I think the racial reckoning had the impact of making companies think a bit more about how bad their numbers are. I was just stunned when Microsoft put out they’re doing a bunch in the space particular to cyber security, I knew it was a pretty, not diverse field, but I didn’t know how bad it was, over 80% white and over 80% male. I mean, so you just got to do better than that as a society. And I feel like there’s an acceptance among companies really a lot more than there was three years ago that you have to take that seriously.

Todd Zipper:
So can we jump is some of the big announcements that we’ve seen from tech companies, Amazon, Google, Salesforce, Microsoft, you just mentioned and more, and they’re approaching it from different angles, the whole education space. Let’s just start with Amazon, I think it was $1.2 billion committed to offer certifications, associates bachelor’s degrees, you name it, really fully funding their either warehouse workers, I don’t know, their associates, whatever they call their kind of frontline workers call it 500,000 plus to really reskill. I wouldn’t call it even upskill or reskill, right, to get a different type of job either inside or even more likely outside of the company. Should we look at this as kind of unique to just Amazon because if every company did that at own scale, we would be talking about massive amounts of investment in the economy that’s not currently there in post-secondary education, funded by employers. What are your thoughts on this?

Paul Fain:
Yeah. So a couple big things going on here, first of all, it’s not just the big tech companies in the strictest sense that are going to have to think about how to help workers, that they’re going to eliminate positions due to automation outskill, I guess if you want to call it. It’s big banks that really are big tech companies too. It’s big retail banking, anything that has a lot of tech jobs, a lot of those jobs are being replaced or changed. And so I think the companies both are trying and this I think goes for Amazon’s career choice for sure, to help workers find new jobs within the company or to help them find their footing outside of it. And for Amazon, they’ve committed to training 300,000 people through career choice in the next few years. And I can’t say what percentage of them will work elsewhere, but a substantial portion.

Paul Fain:
And the idea there is to help them get training to make a jump. Just a fascinating angle though, to me on how hard this is, they’re using a lot of regional labor market data. They have over 140 college partners, four big national online ones. And they’re trying to tailor the kind of eligible college programs, which as you said, run the range from certificates to a four year degree to that local labor market with the goal of their salary being higher than their $18 an hour average starting salary for a fulfillment center worker or for a frontline worker. And I talked to a big healthcare company that has a bunch of hospitals near a bunch of fulfillment centers with massive demand for medical assistance or other allied health jobs. But those jobs don’t pay enough to qualify for Amazon on career choice, 14, 15 an hour, not 18.

Paul Fain:
And I can’t blame Amazon for that. I mean, I think most progressive would say good for Amazon for trying to restrict access into programs that might not pay enough, but that’s where a lot of demand is and we need medical assistance. And let’s be honest, maybe the healthcare companies could become more efficient and could pay more for medical assistance, but it’s kind of like early childcare, the business model is pretty busted. If you saw this early childhood care is even more challenging. Janet Yellen had a great report for the treasury department about how it’s not that they just don’t pay enough, they can’t pay enough. And I think we’re not quite there on medical assistance and allied health, but we’re not that far off.

Todd Zipper:
So let’s take the employer driven education from a different angle and around big tech. I just want to kind of stay here for a second. We’ve seen Google recently announced $100 million, I believe was the number to serve an underserved population of folks with some kind of free training or free loan, no loan repayment or no interest payment loans kind of situation. What are your thoughts around, are they circumventing higher education? Are they just trying to widen the aperture? What is their real motive behind this? I mean, ultimately Google is a corporation and do you think it’ll actually make a dent? Because if you think about how far $100 million dollars goes in sort of student loans, it barely scratches the surface in terms of number of students from a tuition perspective. So how should we think about these kinds of announcements that get a lot of press?

Paul Fain:
Yeah, I mean, obviously unfortunately, almost everyone is different in some key areas, just like all of higher ed, but there are some common threads and the Google one is fascinating. Not just because it’s Google, but it is fascinating that it’s Google, but because of some interesting angles to it. So this is to subsidize, so $100 million dollar new pot of money is designed to support 20,000 students over the next few years to pursue Google Certificates. They have a suite of certificate programs that they designed. They are the instructors, they’re the curriculum masters for these and they’ve been out for a few years. They started with IT support, but it’s more than that now. The idea is they are pretty honest about this, most of those folks aren’t being trained to come work at Google, the vast majority. These are folks who are part of their wider kind of supply chain ecosystem. It’s the same for Salesforce.

Paul Fain:
And one of the differences there is that Salesforce it’s about learning Salesforce related tools. With Google, it’s not even clear to me that these are Google tools necessarily. And there’s some really interesting questions in that, but this is about, I do believe largely philanthropic interest in diversifying and increasing opportunity in kind of entry level IT. One of the most interesting pieces of the Google move here is that $100 million dollar pot of money, which is you say is a loan, it’s a no interest loan. And it’s one that is not just about tuition, it’s actually, they have tapped two established nonprofit, wraparound support and student recruiting groups to manage this. It’s Year Up and Merit America with social finance, handling the loans and the financing.

Paul Fain:
So they’re tapping help institutions that specialize in this, but the students are going to be responsible to repay their loans for the full suite of services. So it’s more than the $49 per month for a Google Cert on Coursera’s platform. It’s about helping them get to the finish line and so it’s going to be more expensive. And they think, and by the way, you don’t owe a cent if you don’t make more than 40K and they’re going to adjust that based on inflation. So the idea is really to find a business plan that’s sustainable.

Todd Zipper:
That’s sustainable, right? Which I believe that is really appealing, but let me push back a little bit. You and I just, I’m not saying you’re taking the pro side and I’m taking the con side, but one is student recruitment, right? So it’s like when you see governors or states announce, oh, all these free scholarships, somehow you still have to get that word out about it. So one is you have a student recruitment issue, right? You’ve got to get this quasi free or no interest loan opportunity in front of people, so that’s a cost in which I’m not hearing factored in here. Then you have to convince people that are probably a population of folks that are working that have a ton of responsibility right now, right? This isn’t people that can afford to just go back to school, so you have a lot of risk in that. Okay. So there’s no cost during the process, but there’s certain time costs.

Todd Zipper:
And then there’s this issue of, am I going to get a job at the end of this thing? So I just see a lot of friction in that model. It’s not a valiant effort and I appreciate them sort of offering this not being a completely self-directed learning process, but I guess I’m concerned about the recruitment aspect and even getting this in front of enough people, the 20,000. And then the second part of it is assuming the job part just because they went through a process and got through it, and this is a quasi MOOC here we’re talking about, right? So that the completion rate on MOOCs have historically been low in the single digits. So I don’t know, am I off base here in sort of throwing some concerns out that maybe that people are factoring into, but I want to get them to think about these issues.

Paul Fain:
Yeah. I mean, I generally agree that those are the areas of friction, for sure. I think I always put my reporting in bold on the numbers of students involved and the experiments I write about because they’re small usually. I mean, 20,000 is great if they can pull that off. But when you’re talking about a country of this size, it’s an experiment even that and yes, so many times good ideas die in not being able to recruit students. It’s really hard, it turns out. We could talk about kind of the American history of learning about how expensive and difficult it is to recruit students from underrepresented backgrounds who’ve had bad experiences with education. Let’s remember that who we’re talking about.

Paul Fain:
I will say though, the Google Certificate is not in the same category to me of a MOOC in that it’s like a badge that nobody cares about. I mean, it’s new and we’ll see, but I personally think Google is a pretty powerful brand. And if they really do have industry buy-in, which they can make a pretty good case, if they have a lot of companies signing on to say, we will consider Google Certs in hiring, you can see the appeal there. But yeah, I mean the other thing besides student recruiting that is the biggest problem always is time poverty. Even I barely have time to tie my shoes in a day. Going back to school when you’re a working adult is enormously hard. That said, self-paced online, well designed, that’s going to be appealing to you.

Paul Fain:
I don’t know how many people there are like this, but during the pandemic or right before actually, times of flat circle, you know how that goes. I met a graduate of Merit America who earned a Google Cert. She had dropped out of college. It was a liberal arts college, she didn’t like it, struggled with it. Worked at Amazon Fulfillment Center. And with support from Merit America got this Google Cert bypassed a bachelor’s degree requirement for another far better job. That’s the person that they’re trying to find. Now she’s probably a unicorn, but I think there are people like that who have not been served by the incumbent systems that these big tech companies are trying to reach.

Todd Zipper:
Yeah. I mean, you kind of just spurred a thought in my mind around skills-based hiring versus degree-based hiring. And there’s a ton of sentiment around skills-based hiring, right. We need to move more in that direction, which is obvious at some level. And yet if you look at even on Google, right, and I think you’ve written about this, there’s still massive degree requirements on a lot of the jobs that are there. And so I just wonder if, of course people would like to hire around skills, but how do you get the skills? Right. And I think traditional degrees can get you at least a lot of the way there, maybe not all the way there. So I think it’s a valiant effort, but I think as we highlighted there is these friction points that when I read the announcement, I didn’t see necessarily those points being acknowledged.

Paul Fain:
Yeah. I mean, skills-based hiring is a tricky topic, we could talk about the whole time here. I think, is everything going to change overnight and everybody decides, you know what, who needs a degree? Come work for me. We love to talk in America about binary, all or nothing or whatever. Most of this is add-ons degrees that I’m talking about anyhow. So, but that said there are companies, Emsi Burning Glass did a study recently of where you’re actually seeing the degree requirement being dropped, it’s not massive at all. I remember Oracle still 100% of their hires are bachelor’s degree holders. So they’re not on board, but Accenture, it was crazy, the numbers had really changed. There’s some fields like insurance sales and Journal did a great piece on this, where you’re seeing a major decline in degree requirement.

Paul Fain:
Maybe you don’t need a four year degree to do insurance sales. In fact, maybe there are skills that could be assessed through some sort of pre-apprenticeship or a bootcamp and developed that would work better in insurance sales than spending a lot of money to go to a four year college. Ideally you could do both, but to take on a lot of debt, some people might find that option appealing. But again, I like to write about things where you’re seeing big change, but it doesn’t mean massive in like 5% shift in computer science hiring degree requirements, according to Emsi Burning Glass . That’s a lot of people and a lot of jobs, that’s the space I’m writing about.

Todd Zipper:
Sure. I never quite understood why Stackables aren’t gaining traction. Meaning we do summer internships, right? That’s a big thing for a traditional college age student. If you extended a three month internship to a one year or two year, you would now be in a situation you’re coming in and out of college as a good thing. Right. And that doesn’t seem to be like you mentioned this insurance sales job, come in, get a something for a year that allows you to do that job. Do that for a couple years, go back finishing associates or bachelors, is that kind of more dynamic fluid approach possible?

Paul Fain:
Possible, common? Heck no. It’s more of a theoretical discussion than a real one. A lot of things are the cause of that not happening very much. I mean, well the two biggest ones that come to mind most often in discussions with folks are our higher ed system does not like to honor transfer credits for a lot of self-interested reasons. It just doesn’t make sense for an institution and they can make plausible arguments about quality. Like if you have a short term certificate from a community college and you enroll in an R1 university, I guess I can see the argument that your calculus credits shouldn’t count because they feel like their calculus class is better. That is a little harder to do as time goes on. There’s a lot of pressure in higher ed to not waste transfer students money in time. But I certainly haven’t seen it change.

Paul Fain:
So to have that seamless path to stack ability, we’ve got a long way to go. I have one hopeful note to end on there, but the biggest one is again, who has time? If you go, you get a decent job, you’re making it, you wish you had a better one. I mean, how many people out there can say, I’ve thought about going back to school, but I never really had time. I mean, that’s what happens to people and they end up sometimes getting trapped in dead end jobs. But that said, you do see movement here. Ohio has just begun with buy-in across their entire public higher education system. It’s a loose system requiring transfer guarantees and certain credentials. They’re starting with practical nursing. Everybody up to Ohio state is accepting now full transfer credits for certain credentials, they’re going to do about 30 in the first year. Somehow they did it in a non heavy handed way with buy-in from administrators and faculty in these fields. I suspect others will be watching Ohio’s playbook there because it’s really hard again to make people start over again when they enroll again.

Todd Zipper:
Yeah. That’s why they just drop out ultimately and not bother completing. So let’s switch gears. You just mentioned the community colleges and it seems like they have been the hardest hit from an enrollment perspective over the last two years. I think they’re down 14%. Can you unpack this for us? What’s happening here? We know there’s been a ton of support for community colleges from the current administration, the previous administration as well, I believe in terms of the vocational aspect. And there’s also the movement around free higher education, which would start with free community college, which I think some of the states even have. So what’s going on with this story?

Paul Fain:
Yeah. I mean, when I was covering the beginning of the pandemic, certainly thought about the great recession, which like all recessions had that countercyclical effect of folks in a tough economy re-enroll or enroll in higher education did not happen. And the pandemic is still not happening. The 15% decline over a couple years, some community colleges is the biggest in 50 years. It’s not just community colleges, it’s down 6% overall. If you take the big online privates, three of them out of that equation, even private colleges are flat. This is a real thing. And obviously, although some people can’t acknowledge it, something that higher ed, I think at large has to seriously, particularly in open access institutions and what’s causing it. I think we know a lot more now than we did a year or two years ago, but again, folks don’t have time and they may be making more money than they were. So the countercyclical thing, because wages are up in entry level professions because of what we talked about earlier with employers. So it seems like less of an attractive option.

Paul Fain:
I think there’s also probably some skepticism about the value of higher ed, some of which is not warranted to be honest. But I think you’re just seeing a lot of this all play together to really have a sustained. And let’s not forget, I mean, enrollments are down for over a decade as well. This is not just a new thing, it’s something that people in higher ed don’t like to talk about, but it’s real. And on community colleges, a lot of politicians like to talk about them, but the support typically doesn’t come, they still get far less government subsidies per student than four year Publix or it’s just true.

Paul Fain:
So the kind of free community college push, which is not part of the president’s new budget this year seems to be DOA, but it was interesting under Obama it was more of a K14 thing where it was described more in workforce terms. And if people had forgotten this, Bill Haslam, the Republican governor of Tennessee was the first state to do this and it was bipartisan and that K14 thing seemed to have some strength. Then it became free college for all around the 2016 election. And I think that destroyed some of the momentum around free community college, but that’s its own full hour podcast interview.

Todd Zipper:
Right. Speaking of declines, I want to move to the for-profit sector. I know you’ve talked about them a little bit here and there. So University of Phoenix when I got my start 15 or so years ago, they were this rocket ship got up to almost I think 500,000 students. And they’re really a shadow of their former self, well below 100,000 students, but there’s been some shadow that they’ve sort of stabilized. I’ve read some things like we’re now focused 100% on careers, our goal is modest growth. They’ve thrown some things out there that I guess resonate more, they’re more realistic. But my question is, where is a place for for-profits in the future?

Paul Fain:
Boy, that’s a tough one. I’ve read quite a few headlines about the last administration rescuing the for-profits. And it’s just not true, there was a tiny little bump in their enrollment in the first quarter of the pandemic and they’re down the most just massively. It’s a collapse depending on what numbers you look at 5% of American higher ed down from 1112 at the peak Phoenix days. And frankly, everyone I talk to, investors aren’t really thinking that’s a stable place to put your money going forward. I’ve reported that the University of Phoenix may be sold soon to a public university. I stand by that reporting.

Paul Fain:
We’ve obviously seen a lot of that in different ways, this looks like it would actually be a full sale, but yeah, I think the days of the national for-profit are not done, but they’re waning and will continue that way. And then a lot of that has to do with good luck catching Western Governors University or Southern New Hampshire University or nonprofits, frankly, ASU online that have gotten very good at aspects of the Phoenix playbook and others in the space. And I don’t want to… SEI is around, American public, nothing is absolute here. There’s still some strong players in this space, but it’s far smaller, much more targeted.

Todd Zipper:
Yeah. It seems like I’ve interviewed a bunch of regional players that really understand their markets, serve more vocations, healthcare related and are doing quite well. But we’re talking 5,000, 10,000 enrollments, not 100,000 and more the way the Southern New Hampshire’s ASU, Western Governors, the ones you’re referring to are. Let’s stick with go back to the public policy and federal funding stuff. So I don’t know where we are with this right now with the latest build back better bill if that even exists. But there was, we’re talking tens of billions thinking about being allocated towards education and workforce development. In my industry of online program management education services, both North Carolina and the State of New York have talked about using federal dollars to create their own internal online program management operations. What is happening here? Are there lots of federal dollars for universities, even though while they’re struggling for enrollments and tuition revenue, are they getting revenue some other way? Can you kind of explain that story to us here?

Paul Fain:
Yeah. And forgive me for simplifying a bit here, but yeah, during the pandemic, the emergency funding totaled about 80 billion in back filling for higher education that really helped higher ed ride out some hard times and it’s been widely reported, although probably not enough reported that money is running out. And I think a lot of the hard times that were forestalled are looming and about the enrollment decline, some institutions, as you say, CUNY, North Carolina are investing some of those funds in what they think will be growth models. And I don’t mean that in just a cynical way, their students will want to find them online in hybrid programs. And I think you’ll probably see some of those really work. I mean, those are decent brands, great brands. I think it’s a good thing that traditional higher ed is investing in that space. And I know Wiley works with a lot of them. It’s not going to go away.

Paul Fain:
And again, you don’t have to look at it as a binary thing, no online education, bad or good. Well, pretty much all students do both now as you know well, so I think that’s what you’re seeing, but to me, where will the new funding streams go to the extent that there are any. I mean, we’ve all been talking about short term Pell Grants hasn’t happened yet probably will though, might happen under a Republican Congress, who knows, but that would be new-ish money that you could regulate differently. You could have outcomes tied to that. You could make it restricted to only kind of high growth fields. Some of things we see the states already doing, Virginia is doing targeted subsidies for short term programs through its community colleges that have very good outcomes as far as we can tell. So I’m in Ohio, Louisiana as well. So that’s the sort of thing where I think we should watch carefully, whether it’s federal apprenticeship dollars that can be used for college credits as well, that have degrees embedded in them. Things where you see increasing funding, that’s a little different than traditional higher ed funding streams.

Todd Zipper:
So you hit on outcomes and I really want to jump into measuring job market success. This is a big topic for me. How can colleges, the department of education, employers all come together to better measure success of various programs in schools so consumers can ascertain whether a particular education pathway, whether it’s a short course, like you just mentioned, or a degree is ultimately right for them. I know there have been a lot of valiant efforts in this area. I know JFF just announced an acquisition of the Educational Quality Outcome Standards Board. What are your thoughts on this? Are we ever going to get to the point where we’ve got a true consumer reports for a particular program at a particular school so a consumer knows what they’re getting their selves into when they decide to take on loans and pay for an education.

Paul Fain:
Yeah. Tough question. Good one. I think there have been valiant efforts that go way back. You can talk about the Obama Administration and its college ratings plan, which people forget. Initially, President Obama wanted to tie federal aid eligibility to the rating system, which included outcomes measures that didn’t happen because it’s so hard. I think I’ve been clearly making comparisons it’s tough in higher ed. It’s really tough to put colleges up next to each other in terms of outcomes, which program, I mean, first of all, you got to get to the program of where it’s largely useless, and it has to be attentive to local labor markets. What’s 40K where I am in greater Washington DC versus rural Indiana. I mean, it’s very difficult to do. And also if you’re going to do it from a consumer standpoint, not an accountability standpoint, it’s very hard to get the word out.

Paul Fain:
I mean, we don’t do a very good job of giving consumers and students a good amount of information about the payoff of credentials. I think we should do more of that, but that on its own is probably not going to get us there and there’s been some scientific research to back up that assertion. That said, it’s happening already, it’s happening in most of the states. There’s performance funding everywhere, not everywhere, but most states, including California now do this. And they’re trying to embed not just crude measures of wage outcomes, but like in California to have measures that include equity. How many Pell eligible students do enroll, maybe even how many first generation college students. There are ways to create measuring systems that could include a lot of what we care about. That doesn’t mean it’s easy, it’s almost impossible.

Paul Fain:
There are, as you say, also private entities like Equis from now JFF to WTEA it’s a really interesting one. We’ll just have to see if the industry itself can do some regulation. And I think I’ll stop here, but the American Council on Education is now in this. The kind of gold standard of self assessment of institutional characteristics, the Carnegie rating system, which ACE just moved to ACE. They’re going to include measures of economic and social mobility in the industry’s own umbrella groups’ kind of flagship ratings system. And you can see, a CUNY is going to look really good there, does that become a status thing? Does that become something where they actually get some public subsidies that they’re competitors who don’t do as much on economic mobility do. I can tell you that some people are worried about that who don’t work at CUNY.

Todd Zipper:
I remember that very acutely when gainful employment came out and how the impact of that was on the for-profit space in particular, it felt like that was heading in the right direction. Right. Trying to understand the market signals of a particular program, looking at things like debt to earnings ratios, it was isolated at for-profits. I never fully understood why and why that wouldn’t just be applied to ever everyone. Can that happen? Can we get tax data from students that ultimately took out loans? Why are we hesitating there to kind of roll out a larger, and maybe you can explain what gainful employment is. I’m not sure if I could, but maybe you could.

Paul Fain:
Yeah. I mean, very simply measures that prove whether or not student can repay their loans is where we’ve been on gainful employment. It’s aimed at vocational programs. Some would say, I think fairly compellingly that Congress determined that those tend to be all for-profit programs. And I know you know this a non-degree programs at public and private nonprofits. The bigger question right now, can we do an earnings floor? The education department under President Biden just introduced a measure of the earnings of your graduates versus high school credential only floor in your state. And the question being, should a credential be worth more than somebody who only has a high school diploma?

Paul Fain:
It does seem a little hard to fight that one. But there’s some arguments that, and one of the ones I heard was at what point. So let’s say, the gainful data under this is two, three years out, maybe three years out, and you’re comparing it to a 33 year old who’s 12 years out of cosmetology credential without any other credential. You could see that you may have instances where that doesn’t work. I don’t know. I think that’s going to be a tough one to fight. And to your broader point, I think increasingly that government at large is going to continue to push into some sort of measures of outcomes beyond the for-profits at least in that, which programs qualify for new money.

Todd Zipper:
Yeah. That’s hopefully we’ll move more in that direction. I want to go back to your comment around whether we have a new college ranking system. I know back in February, our US secretary of education weighed in on the Carnegie classification news, he said, colleges and universities need to reimagine themselves around inclusivity and student success, not selectivity and reputation. To quote him, “I hope today’s announcement will be the beginning of a new competition among colleges, one that rewards colleges doing the most for upward mobility.” Can you explain the Carnegie system and what this means for higher education if it’s dramatically changed?

Paul Fain:
Yeah, I mean, all I can say about the use of the Carnegie system thus far is that it tends to be around your research capacity or what credentials you issue. And in higher ed, as we all know is pretty ambitious and a lot of college presidents would like to move up. Even saying up, maybe isn’t fair, if you’re a master’s degree issuing regional public, but you don’t have a research capacity, you don’t issue PhDs, are you a lesser institution? No, actually you’re not at all. But in the American kind of prestige system, the R1 research university historically under the Carnegie ranking system it’s the crown jewel.

Paul Fain:
And by the way they do great stuff, they’re global research universities. We all like them. We don’t want them to go away. But I think his point is, that’s a strong quote that it’s pretty recent, frankly, that we’ve seen good data on how much higher education is correlated with moves and economic mobility. The rash chatty data, that frankly was the big turning point for all of this, in my opinion, just five years ago where we saw that most institutions largely higher ed on the whole is not making good on that promise of helping people get to a higher income quintile than where they entered. And I think the point of should we maybe prioritize institutions that do that well relative to peers that don’t, it’s pretty compelling.

Todd Zipper:
Absolutely. So we’re just about out of time here. Couple more questions. Any innovations catching your eye right now in higher ed that we haven’t talked about yet?

Paul Fain:
Oh, geez. So many. I mean, that’s the thing. I think a lot of people feel like higher education is slow to innovate like now. I’m going to be long gone and almost all the institutions we talk about are going to be going strong. This is a very adaptive industry that absorbs interesting concepts. One thing to watch, you have a huge increase in homeschooled K12 students, who can reach them, who can recruit them and serve them? Is there going to be growth in kind of online education that’s seamless from K12? Just this one small example, I think the really interesting embedding of valuable micro credentials and degree reprograms, we’ve talked about this a little bit, so much of that happening.

Paul Fain:
And again, if you can do it, it seems like a net plus to me, if you can get a SAS micro credential that shows an employer that you know how to use that research language in a job it’s going to boost your employability. Emsi Burning Glass does a lot of really interesting data on low hanging fruit here. Not even maybe teaching you something different, but helping your students know to show employers discreet skills that are actually valuable in local markets. A lot of colleges are doing that and that goes up and down the food chain, the Carnegie rating system. The Stanfords and the Harvards are watching this. And so are regional publics, not everybody. That idea to me, I’m pretty confident that if we do a follow up interview in three years, you’re going to see a lot of institutions embedding credentials that are valuable.

Todd Zipper:
Yeah. It seems logical. We know that the movement around digital credentials are here. And so you’re not just going to be a diploma at the end of the day, you’re going to have these ways to express yourself verified in your skills. Right. And that’s kind of what you’re talking about, bringing those being more than just a bachelor’s degree, but having a series of credentials behind that. So last question for you, I ask this of all my guests, part of what we love about education is that we all have learning champions. Who has been a learning champion for you and how has that person helped you in your life?

Paul Fain:
Yeah. One of the first ones that comes to mind when I went into journalism, not a journalism major, I took one journalism class, I got a C, by the way I’m not proud of that. I was a poly sci in history major and the journalism professors I got to know through the college newspaper, including the late Dennis Jackson at the University of Delaware really helped me realize that you got to be an entrepreneur. You got to keep reinventing yourself. You have to hustle, learn new ways to tell stories, don’t ever rest on your accomplishments. And that you’ll be much better off than you don’t. And I appreciated that lesson and I hope to help others learn it.

Todd Zipper:
I think that’s good advice for all of us as well. Well, Paul, thank you so much for taking the time to speak with me today. Until next time, this has been An Educated Guest.
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