Season 6: Final Report

Relevant Links

The Financially Resilient University

Transcript

Michael Horn:

Jeff, we are finally here at the end of yet another season of Future U, and what a season it's been.

Jeff Selingo:

Yeah, we've covered everything from college rankings to debt and from affirmative action to religion and mental health of teenagers. And I think Michael once again, we're reminded that basically, everything comes back to higher ed eventually. And on this episode with two key Supreme Court decisions on race and admissions and student loans likely to reverberate across higher ed, we get to talk about the year that was and look ahead to the next season of Future U.

Speaker 1:

This episode of Future U is sponsored by Ascendium Education Group, a nonprofit organization committed to helping learners from low-income backgrounds reach their education and career goals. For more information, visit ascendiumphilanthropy.org. This episode is brought to you by the Bill and Melinda Gates Foundation, working to eliminate race, ethnicity, and income as predictors of student success through innovation, data and information, policy, and institutional transformation. Earn continuing education units this spring with Teaching Practice, an online faculty development program from Course Hero. Over a series of asynchronous courses, you'll uncover new ways to leverage tech in the classroom and build inclusive curriculum all while supporting your own well-being. Plus, you'll get weekly office hours support from leading instructors. Enroll for free today at education.coursehero.com.

Jeff Selingo:

I'm Jeff Selingo.

Michael Horn:

And I'm Michael Horn.

Jeff, it is hard to believe that we are wrapping up Season Six of Future U. This past season, we've gotten to do two more stops on the Future U campus tour, both in the DMV area, I might add. We've delved into the issues of mental health. We've had several more college and university presidents on the show, and we've gotten to tackle everything from college athletics and of course AI and the metaverse. Remember when that was a hot topic and not AI? It just feels like that was ages ago, and yet we did a show on the metaverse and VR back in October, and now just think about how much has happened in higher ed in the broader landscape, pile that on top of the themes you mentioned at the very top, and we've gotten to talk about quite a range of topics this year.

Jeff Selingo:

Yeah, Michael, and you didn't mention that one of the presidents we had on at the beginning of the season, Jason Wingard, didn't even last the rest of the season of Future U. And I think it's the pitfalls of the presidency that we discussed recently with Greg Washington at George Mason University, the President of George Mason University. And in Jason's case at Temple, I've been thinking a lot about him recently because I keep getting asked about what happened there. And I really think a couple of things are going on in college presidencies that were kind of unique maybe to Jason's case. For example, now that we think about his bio, he led mostly at elite private colleges and universities, at Columbian and at Penn, for example. And then he was at this big urban public university or quasi-public university, in some ways, in Pennsylvania.

Temple is a pretty elaborate and big place. It has a medical school for one thing, and so that tends to make operations much more complicated, Division One athletics on top of that. And most of his leadership in higher ed at least was in professional units within higher ed. Of course, he had the Goldman Sachs experience as well. But I think that we sometimes discount the complexity of these institutions again, particularly with medical schools and Division One athletics, and that operations really matter. And he was certainly out there, it seems like in many ways I saw him on TV more than some people on campus saw him on campus. And I think sometimes, especially new presidents, maybe risk spending too much time off of campus, maybe fundraising or being involved in national organizations, or in his case, promoting his book and not enough time getting to know the nuts and bolts of the institution.

And with the demographic cliff coming in a couple of years with of course political fires just getting even hotter in a presidential year in 2024 plus the financial sustainability of so many colleges and universities, I think we're going to probably be talking a lot more about leadership in higher ed on the next season of Future U.

Michael Horn:

Yeah, I think it's great set of points, Jeff, and a preview maybe of what's to come, but given the whirlwind that it has been before we jump onto what will be and say goodbye to this season and take our traditional summer hiatus... Yes, Jeff, and I know we are a bit traditional, we wanted to do just a final show with a year in review and do a bit of a look ahead then maybe after the break. Jeff, I think we should also, however, be transparent with our audience about when we are recording this part of the show anyway.

Jeff Selingo:

Yeah, that's right, Michael, because even as we record this, all of the world of higher ed has its eyes and ears trained on the Supreme Court, which is expected to deliver a trio of decisions any day now in June. And listeners will recall that we did a show in late March on affirmative action admissions and the implications of the two cases involving Harvard and UNC that are before the court right now. And then, of course, there's a case before the court on student loan forgiveness, which is also a topic we've discussed repeatedly on the show. We're recording this on June 9th, knowing full well that by the time we release it on June 20th, the decisions may be out, or quite frankly, the decisions may come out in a week after we release this episode. And there's no question that the results of those decisions are likely to have huge ramifications for the future of higher ed. We will certainly find a time to talk about them after they've been handed down and reflect on how they impact colleges and universities and today and tomorrow's students and alums as well.

Michael Horn:

Yeah. But Jeff, maybe that's the perfect segue into what we did want to do in the first half of today's show, which is both to pick out our favorite episodes or themes, if you will, from the season we've just had, and then say a few words about that theme and why it stood out. And then we will take a quick break for our sponsors and come back with a prediction for what's ahead. Now, that's a dangerous exercise as I've learned that my predictive powers are generally most accurate about the past, and even then I'm not always right, Jeff, but I think that's where we'll go.

Jeff Selingo:

Well, that's why the listeners pay us the big bucks, right, Michael?

Michael Horn:

Something like that, Jeff, but let's dive in. What do you have on your top theme or episode for the year we've had?

Jeff Selingo:

Well, we've actually had so many good episodes this year, so many great guests, and really thankful for those people who give us their time every week. But I think it really had to be the two on college athletics that we did. And I wonder that just like we're watching race and admissions right now and student loans right now, and even the impact of AI in higher ed, I wonder if this thing around college athletics is something that's really lurking below the surface that I just don't think enough people are paying attention to. I just heard from a college president recently in Low Division One who told me that the transfer portal is literally blowing up and students are just moving, athletes are moving left and right because of NIL, name, image, and likeness. And they just lost an athlete in one of their sports to a six-figure deal. And so they ended up transferring to another institution.

And we tend to focus a lot on Division One, but I also think that higher ed is just not ready if college athletes are eventually classified as employees. And so Michael, I think one tease is that I hope we really can have Charlie Baker on from your home state of Massachusetts and the new President of the NCAA because I think that this is something that we're probably not talking enough about because again, just like we talked on that college athletics show earlier this year, college athletics is something that tends to dominate the sports pages, but not necessarily the news pages. Now, just a couple of other quick episodes because again, I think that there were so many fun ones this year. I think AR-VR, you mentioned that early on, and I think probably has been overtaken by AI, but especially in light of the recent Apple announcement about their headset. And then, of course, after that episode, which ASU was featured on, they decided to drop all in-person labs in intro biology courses after that experiment with AR-VR that boosted student performance. So it's become even a bigger play at ASU.

I'm really thrilled with the recent accreditation episode that we did in the history, and I think it's something that I'm hoping that every trustee listens to. And then just two others. As I think about the past season. We had Mary Opperman and Kevin McClure on to talk about talent management, and it was a phrase that I hadn't really heard in higher ed very much. Everybody is talking about enrollment management, but it's clear that if colleges and universities really want to be better institutions for their students, that they're going to have to focus a lot on talent management. And there were so many gems in that episode around how colleges and universities could come up with the talent management strategy just like they have with enrollment management.

And then finally, Lisa Damour on the kids post-Covid and how this is really going to be a decade-long experiment in colleges and universities about how to react and deal with students who had a lot of learning loss during the pandemic, not just in high school, which I think we've tended to talk a lot about, but going back to middle school and elementary school as well.

Michael Horn:

Yeah, I love so much of what you just picked out there, Jeff. I'll just key in on one because you had the NCAA and athletes and NIL. I've been going back and forth on my prediction for the back half of the show. And I will tell you my prediction in one version of this was going to center around that. I pulled back from it. But our friend Matt Brown, who was on with us at the beginning of the year in those two episodes around college athletics, he's had some great writing about some of the controversies at BYU and elsewhere where student-athletes, there weren't contracts in place as they've taken these NIL deals. And there's been questions about what was promised by some of the folks that they've signed up with.

I think the bottom is still to fall out of this. And I suspect we're going to see Charlie Baker up before Congress a few times trying to ask for certain legislation, I think, but also frankly, perhaps getting grilled about why there aren't stronger guardrails in place to protect the athletes. I think that's going to be a big storyline that continues not just next year, but over the next couple of years.

Jeff Selingo:

And a somewhat related, but unrelated storyline is also gambling in sports in general, which have drastically increased. And we're seeing some stories about that with college athletes. I think there's so many angles on the college athletics front. What about you, Michael? What was on your list of episodes?

Michael Horn:

Man, Jeff, there were some really good episodes this year, just as you said, and I'm not just saying that because I loved how you interviewed me a couple of times about the impact of K12 education, of course, my book From Reopen to Reinvent. But I think my favorite episodes were those that really tackled cost in higher ed because cost is at the root of a lot of the conversations around debt that we have and the Supreme Court obviously action there. And fundamentally, I think the high cost of college is why we have so many parents and students rethinking whether to go to college right now. Cost has impacted the value proposition that parents and students expect from a college education. I think the fact that people say, "Hey, we go to college to get a job," I think it's because they need to see that ROI in a way that they didn't a decade, two decades ago.

And it's frankly impacting all the closure and merger and acquisition conversations that we've had. While I loved my rant about the difference between cost and tuition and the difference between cost and affordability on that show with Sue Dynarski and Bill Trout back in January, I also loved how many other guests tackled the question as well. You talked about Jason Wingard earlier, obviously, he was then the President of Temple. He talked about the value proposition of higher education and disruption, and obviously, I think he got ahead of that conversation on his campus, but it's a really important one that he brought up, nonetheless. We had Ruben Agana and Rebecca Tabor from the Marcy Lab School in America respectively. They both talked about short-off affordable alternatives to college. That was on our show in February. And honestly, Jeff, this may have been my favorite episode of the season.

And we've obviously talked about M and A. Back in March, we had what was an eye-opening show for me where we had two guests that really showed why this is different from healthcare, and maybe we shouldn't expect the same level of M and A activity that a sector like that has. We also had a situation where the OIG came down on colleges for their confusing financial aid letters. We pulled back an episode from 2019 with Rachel Fishman from New America where she talked about this issue and the research that they had done that led to that action, if you will. And then frankly, the cost conversation reared its head again when we talked about the controversy over the Department of Education's broadening of its regulations over third-party servicers in April. It came up again when we talked to Florida Governor, former Florida Governor, I should say, Jeb Bush in May. And then, of course, with Clark Gilbert and the show on the role of religion in higher ed, we talked about how that could be a factor in helping reduce costs.

I get that I may be missing the spirit of the question by focusing on a theme across episodes, but I just think when I think back on this year of Future U, the cost of higher ed is going to be a big theme that I take away. And when I think about the Supreme Court and student loan forgiveness, to me, the question before us right now is are we going to keep kicking the affordability can down the road by forgiving debt, but not forcing colleges and universities to get serious about their underlying cost structure? Or are we going to say, "No, you can't forgive debt without an act of Congress"?

Now, again, I'm saying this, we're recording it. By the time this comes out, the Supreme Court may have weighed in. We may even have a segment on this. But look, I think it's a significant question, and I hope either way it lights a fire under colleges and universities to really start to figure out their cost structures and not just look for more revenue from other sources to lower the tuition price tag and then be hanging hat in hand from year to year as so many colleges are right now.

Jeff Selingo:

Michael, I don't think you violated the spirit of the question. When I saw some of your notes on the episode and I saw that you had multiple favorite episodes, I decided why not? Why can't we have multiple episodes? And I think the one that you brought up around M and A, I think a lot of us have been talking about the healthcare analogy in our talks and in our writings, and that one really put me in my place to say, "Well, maybe it doesn't work, the healthcare analogy." So I actually started using a Hollywood analogy after that, the idea of shelf space on linear television and just how streaming disrupted that. And is the same thing going to happen in higher ed around the credit hour and seat time and optionality for students, whether they want to do online or face-to-face, very much like linear television versus streaming?

And then, of course, I talked about that in California recently, and someone in the entertainment industry was in the audience and rightly pointed out that online is lower priced in the entertainment world, and it's killing the legacy systems. Maybe the analogy doesn't work because Hollywood wants to go back to those legacy systems because it provides more money for them. And in higher ed right now, online provides a nice cushion for a lot of colleges and universities in terms of a profit. I guess the bottom line is I'm starting to think there isn't any analogy at all for higher ed and that maybe higher ed really is this unique business that people in the business keep telling us it is. But let's stop there for now and we'll take a quick break and we'll talk about next year when we come back on Future U.

This episode of Future U is sponsored by Ascendium Education Group, a nonprofit organization committed to helping learners from low-income backgrounds reach their education and career goals. Ascendium believes that system-level change and a student-centric approach are important for our nation's efforts to boost post-secondary education and workforce training opportunities. That's why their philanthropy aims to remove systemic barriers faced by these learners, specifically first-generation students, incarcerated adults, veterans, students of color, adult learners, and rural community members. For more information, visit ascendiumphilanthropy.org.

Michael Horn:

This episode is being brought to you by the Bill and Melinda Gates Foundation. Today's college students are more than just students. They're workers, parents, and caregivers and neighbors, and colleges and universities need to change to meet their changing needs. Learn more about the foundation's efforts to transform institutions to be more student-centered at USprogram.gatesfoundation.org.

Welcome back to Future You. And here we get to the part where we talk explicitly now about the future, no longer the past, but not so much about the impact of all the stuff we talked about on the front end. Instead, we are going to go out on a limb and hazard predictions for the next academic year, which starts July 1st. So it's literally right around the corner. Jeff, what do you have?

Jeff Selingo:

Well, mentioned it earlier about presidents. I think that we're going to see a lot more ousters, the kind that we saw at Temple. Maybe not so public like Jason Wingard, but it's clear that a lot of institutions are not making their numbers. They're not making their enrollment numbers. They might be discounting too much. That's putting a lot of pressure on net revenue. I've been looking at a lot of the Moody's Ratings that have been coming through my inbox the last couple of weeks. There's a lot of downgrades of smaller institutions, both public and private. All of this is going to come to a head, in my opinion, starting in the fall when there's more summer melts or the budgets really come into full view. Some of these presidents might make it through another academic year, but I would not be surprised, Michael, that if we see a bunch of flame-outs among presidents because they just are not getting along with their board, their board thinks they need to take more aggressive action, especially around the finances of the university.

Michael Horn:

Well, it goes back to that cost question, I guess, where you ended it. But it is interesting. The big takeaway I've had, Jeff, from six seasons of Future U with you is that the most transformational leaders, their tenure is measured in decades, not years. And so when boards make those quick changes looking for the quick fix, I don't think there are quick fixes in higher ed. Maybe they genuinely don't have the right person, and I'm not going to get into that debate with them, but I worry that they are switching too quickly without giving people really the time and ramp that they need.

Jeff Selingo:

So then Michael, what's your prediction? Are we going to have more college closures then as a result?

Michael Horn:

That's where we always go. But look, I think there will be those. I think it'll probably be a slight uptick from what we've seen, but that's not where I'm going with mine, Jeff. I'm going to save that chit, if you will, for 2026 when I think we'll really start to see this. Although I will say you referenced you following the Moody stuff. You also did that report with Bain recently on the number of colleges that are in trouble. And that was pretty interesting and spicy, I will say, Jeff.

Jeff Selingo:

Yeah, Michael, 10 years ago in 2013, I worked on this report with Bain around the financially sustainable university. And at that time we found out maybe a third of institutions were on a financially unsustainable pathway. And then, of course, the last decade, actually, some colleges ended up doing fairly well, mainly because of the market. And then there was this good uptick in some ways in colleges during the pandemic, largely because of the federal dollars that papered over some of the issues happening in higher education. But all that said, we discovered now 10 years later that the number of colleges and universities on an unsustainable financial pathway went up by 70%. And what does that mean? It means that their three-year rolling enrollment trends are not good. In other words, they're flat or are declining, mostly declining, that they really don't have any margins to speak of or their deficit spending, and they really don't have enough reserves to cover that deficit spending. That's really what financial sustainability means in those three attributes.

Michael Horn:

Well, I think that is fascinating, and we should absolutely put a link to that in the show notes. Miriam and Michael, this is our chance to say thank you for everything over the last year, but make sure you get that link in the episode as well. It's a way to thank you guys. But Jeff, I do want to go a different direction because I do think the report that you just put out indicates, look, there was a rise in closures through the 2010s. I think there's going to be even more rise as we hit over the next couple of years. But I want to go with a different one, which is as a result of the recent debt ceiling deal that raised the debt ceiling, we're going to have a resumption of student loan payments on August 29th, no less. That's coming quick.

My prediction is that I think there's going to be some wrinkles and hitches and a lot of chaos. I think there's a lot of students who haven't been making these payments. Will they get contacted? I think there's all sorts of questions around how that's going to go, and I do not expect it to go smoothly at all as we get out of this payment pause, Jeff, that we've had since the Covid emergency took hold. That's been for several years, which has I think changed a lot of behavior from students and folks in the industry.

Jeff Selingo:

Oh, Michael, there's no doubt about that. I think we're going to see chaos on the Department of Education side. They say they don't really have the staff to deal with this, and a lot of the servicers that they use also don't really have the staff that's trained up for this. I also think that there's going to be larger ramifications for the economy as a whole because suddenly people who were spending money on other things are now going to have to start spending their money on their student loan repayments. And who knows what's happening with the economy in terms of a recession? But is there a fear that this might push us into a recession? Now, that's not to say we shouldn't do this, but I do think that this is going to become much more than just a higher-ed story. I think this is going to become a larger economic story.

I think we really reached the end of Season Six of Future U. Thank you all out there for listening to us, to subscribing to us, to telling your friends and your colleagues about us. People learn about the show through word of mouth. And Michael and I really appreciate all of you out there talking about the episodes and talking about the show in general. We hope all of you enjoy your summer. If you really miss us, there is a huge archive, not only just of the shows we talked about today, but shows going back through all of our previous five seasons as well, that I think there's some gems in there if you want to listen to them if you're that bored at home or at the beach this summer. And we're really going to be looking forward to seeing everybody this fall for Season Seven of Future U. Have a good summer, everybody.