Kickoff to Season 5

Monday, August 30, 2021 - So much for the much-heralded “hot vax summer.” As Jeff and Michael return from their summer break, they continue to talk about the impact of Covid on higher ed and catch up on the news headlines from the sale of edX to the NCAA ruling by the Supreme Court as well as preview what's to come on Season 5 of Future U.

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Relevant Links

Education Next: College Sports Cartel Crashes as Athletes Prepare to Cash in on “Name, Image, and Likeness” [Link]

White paper: What's Next for Higher Education Pricing [Link]

LinkedIn: How to Fly and Attend Conferences in 2021 [Link]

Transcript

Michael Horn:

And just like that, the summer is over and so too is the hiatus for Future U. And here we are back with season five, Jeff.

Jeffrey Selingo:

Yeah, that's right, Michael. And perhaps we all thought maybe prematurely a few months ago that when we did return, so too with some normalcy to our lives and maybe to this show, vaccination rates were rising and COVID infections were dropping, but we all know that has changed with the Delta variant. Today on this our 85th episode, we're going to discuss what else changed over the summer in higher ed, our workforce, and preview a bit of what's coming up as we approach our 100th episode in the months ahead on Future U.

Sponsor:

Support for this podcast is provided by the Bill & Melinda Gates Foundation, which is proud to support the work of the post-secondary value commission. Because the question, what is college worth? Deserves answers. Learn more at postsecondaryvalue.org. Subscribe to Future U wherever you get your podcasts, and follow us on Twitter at the handle futureupodcast. And if you enjoy the podcast, please leave us a five star rating so others can discover the conversations we're having about higher education.

Michael Horn:

I'm Michael Horn.

Jeffrey Selingo:

And I'm Jeff Selingo.

Michael Horn:

Jeff, it is good to see you still virtually, although we're about to be together in person for ASU+GSV. And for those that don't know, that's an annual gathering of education innovation that occurs every year in San Diego. It's generally in the spring, but they've moved it forward this year just given all of the dances, if you will, around logistics of COVID. But we're going to record two episodes there, and it's going to be really good to be back. It's going to be good to be back in person with you, Jeff, and for our listeners, this opening episode will be a bit different from normal. It will be shorter, and we won't have a guest. The format you're accustomed to though we'll return for our second episode when we broadcast from GSV.

Jeffrey Selingo:

Yeah, that's right, Michael. And today we're going to, I think, talk about the past few months, the biggest stories that might stick in higher ed, and we'll probably be doing a few episodes on those in the coming year, full episodes on those; projects that we've been working on that might interest our listeners, and what we've been reading or listening to this summer. Does that sound good?

Michael Horn:

Sure does, Jeff. So let's get started. I'm curious what you think were the biggest headlines in higher ed this past summer.

Jeffrey Selingo:

Well, I think there were several. So there was, of course, Nikole Hannah-Jones, the Pulitzer prize-winning journalist who was declined tenure when she was hired by UNC Chapel Hill because of some political interference over her work on the 1619 Project, which examined the consequences of slavery in the US. She eventually got tenure from Carolina after several weeks and a lot of headlines, but then she decided to take control and go to Howard University instead. And so that was a big headline of course, this summer. And then there's the 2U edX deal, and then of course there was vaccine mandates by colleges which we're now seeing colleges enforce. There's this news recently out of UVA that they disenrolled more than 50 students for not having one.

Jeffrey Selingo:

There was the Wall Street Journal's excellent coverage of the debt taken on for master's degrees that I think led to a lot of coverage, some good I will say, and some bad, about whether the master's degree is worth it. But if I had to pick one, I'm going to pick the Supreme Court ruling in June that said the NCAA could not block certain education-related payments to college athletes. And that was the same week that a bunch of laws took effect in the states that will allow college athletes to earn money from endorsement deals and autographs and appearances. The whole idea of a name, image, and likeness, a debate that has gone on and in college sports for so long.

Jeffrey Selingo:

I think this really kind of gets to the core of athletics and college athletics, and we tend to think of it, we tend to talk about it as amateurism, but we know that's really a myth. I think the only people that talk about it as an amateur thing is the NCAA itself. We all knew it was a myth, and now the Supreme Court in the states really forced the NCAA's hand. And I think the question now is what happens next, and its impact on institutions? There's a great piece, and we'll put it in the show notes in education next that just came out that really went through the history of this and the NCAA.

Jeffrey Selingo:

I was reading this piece before we went on the air, and I just want to pull a few things out about it. First of all, 65 schools in the most elite college athletic programs took an $8.5 billion in revenue in 2016. So they're making all of this money on college athletics. And again, it's at the very elite level here, but a lot of this was not going to student athletes because under these regulations, they couldn't get anything above the cost of attendance. And we saw within weeks, actually within days of these changes by both the Supreme Court ruling and these laws in the states and then the NCAA, we saw a number of endorsement deals with a number of stars at different institutions come to be.

Jeffrey Selingo:

And in fact in Arkansas, this barbecue joint which was in the ed next piece, they decided to sponsor the entire offensive line of the University of Arkansas Razorbacks men's football team. So you're going to see this constantly over and over again at the biggest institutions. Now there's a couple of things that I'm looking for in this. One is you're going to see a lot of conference realignment, I think, now because certain teams, certain conferences, I think, are just going to get more money out of this and we're already seeing it. In just the last couple of weeks, we saw Oklahoma and Texas say they're leaving the big 12 to head over to the SCC, which is already a powerhouse conference. And I think what's interesting to those who may not care about sports is that the realignment also has some academic realignments.

Jeffrey Selingo:

You might remember a couple of years ago when Maryland and Rutgers came into the big 10. Remember, many of these institutions see each other as academic peers as well. That's definitely the case in the big 10. It's less so the case in probably the big 12 or the SCC, but also the case, I think, in the pack 12 as well. So when you see realignment, there are other academic ramifications for that alignment beyond just what's happening in athletics. I also think that this is really going to cause some institutions to drop out of division one or to drop football or perhaps basketball, because it just becomes too expensive.

Jeffrey Selingo:

A lot of athletics we know is caught up in prestige in alumni, so I think we're going to see over the next couple of years, a lot of debates on campuses that's going to pit different stakeholders together, including the faculty who in some campuses really don't like athletics and all the money it gets, alumni who really cheer rah rah for their team, and then you're going to see other presidents who think that it's necessary in order to maintain their prestige. Remember, a place like Georgia State didn't even have a football team until 2008, but largely they thought if we're going to be seen as a major university in this country, we have to have a football team. And they added that back in 2008. I think the third ramification from this is going to be some presidents just saying, "You know what, this is not worth fighting over anymore, and I'm just going to walk away."

Jeffrey Selingo:

We're already seeing some presidents leave prematurely and we're hopefully going to do a show on that this season, and I think that we're going to see maybe more of that in the coming year. So I think conference realignment, institutions really thinking about how much they want to do division one sports especially football and basketball, and how much is that really tied up in their rankings and their prestige and then presidents, and whether they really want to stick this out and deal with the ramifications of this NCAA ruling. So how about you, Michael? What's the headline that caught your attention this summer?

Michael Horn:

Well, it's hard to argue with your list, Jeff. I think you have the major ones and I just have to say I'm so glad that the O-line got some love because a lot of times they didn't. So I love that you pulled that fact out of the next piece. But I'll just add one more on top of the ones that you added, which is movement in the federal government on financing of college was the other news item that I don't think has created the headline moment yet, but we did see president Biden push off student loan repayments to January 31st, 2022, so that was another delay in response to the pandemic. I think that's significant. It creates more battlegrounds certainly around what will he ultimately do on student loan repayments? What will he cancel and so forth? But simultaneously, we saw a free community college perhaps, get a way to get enacted into law, that at least I and I think many others were skeptical would happen.

Michael Horn:

But as part of the $3.5 trillion reconciliation bill the Democrats would like to push forward, free community college is very likely. At the moment anyway, it appears to be part of that. So I think that's something to stay tuned on. But I'll weigh in on one of the headlines that you raised, which was there were a number of eye-popping fundraisers and deals and ed tech over the past few months. But you mentioned 2U, the OPM, we have [inaudible 00:10:23] Chip Paucek, the CEO on this podcast acquiring edX, which we've had the CEO of edX and on Agrawall on this podcast as well. And of course edX is the nonprofit that was run or is still run jointly by MIT and Harvard for the moment.

Michael Horn:

And edX, 39 million people having learned on its platform with a reach well over 120 million brings in over $80 million in revenue a year, but was consistently losing money. And from my perspective, I think both sides came out really well out of this deal. On the edX side, they had advanced major things in online learning such as the micro master's degree, the micro bachelor's degree, this notion of stackability, credits you earn from different places being able to count towards something larger, really taking a degree in dismantling it into its component parts to make it much more modular and affordable.

Michael Horn:

But while edX while their traffic exploded during the pandemic, it couldn't possibly keep up with its competitor, which was Coursera of course, that went public in the last several months. They grew even faster. And of course, Coursera has deep access to private capital markets, and just the price of keeping up for edX just kept rising. And at some point, I think Harvard and MIT came to the realization that having an entity that was growing but losing money and really required more investment to stay relevant, they had already put an $80 million into the nonprofit, it just didn't make sense from a mission perspective.

Michael Horn:

And so of course getting $800 million from 2U to purchase the asset to allow Harvard and MIT to do some research and development on the future of online learning... We can come back to that of course and where will it actually go, but I think that was a good outcome for the universities. For 2U of course, I think this was tremendous for them because it allows them to better compete with Coursera, which was in essence positioning itself as a disruptor in the field relative to 2U. And now thanks to the edX acquisition, 2U as a much bigger direct to consumer pipeline, they have millions of people that have been coming and will keep coming to the edX website, fueled by incredible higher ed brands that they'll be able to take and say, "Okay, Jeff. Do you want a degree? Do you want a certificate? Do you want a micro master's? Do you want a micro bachelor's?"

Michael Horn:

And it's going to dramatically lower the cost of acquisition for the bigger programs that 2U offers for its boot camps, for its degrees and so forth, and I think that's going to be a tremendous win for them because online learning; many people don't realize this perhaps, but it's been a game where were the costs to acquire students have gone up for most institutions over time. For 2U, this is going to allow them to cut into that and give them a full sweep of products and services that run the gambit from free to their high priced and very high touch degrees, which are a differentiator in this space.

Michael Horn:

So I think they came out really well out of this, and they better positioned themselves against the disruptors like a Coursera or a Noodle partners and some of those other entities that have differentiated cost structures. Now, there's some questions here, Jeff. I think we'll have to see will the institutions that put their courses on edX, I think it's fair to say some of them feel blindsided and a bit betrayed, will they keep their courses, their offerings on the edX and now 2U platform going forward? That's something that we'll have to keep an eye on. But I think it's a fascinating set of developments in a part of the market that's maturing rapidly right now.

Jeffrey Selingo:

Michael, that was an incredible summary of what's happened, and we're definitely going to do a whole show on this by the way for our listeners. I think there are just so many questions still to answer. And there were three things that you said that were interesting to me. One is you mentioned that $800 million fund and what's going to happen to it, and I think there's a lot of people out there who want to know, "Well, how are they going to spend that $800 million?" They talk about research and things like that. It would be interesting. In some ways that's like a major foundation in terms of what they could give out, and so we'll be very interested in that.

Jeffrey Selingo:

I think you talked about that there were some academic partners that were not happy today because of this, because they wanted edX to succeed as a nonprofit. They were kind of all in on that, and that's not what they have now. I would love to dig deeper onto the academic partner side of the house. And then you were talking about what this does for 2U, which I think is interesting because if you look at the slide deck that 2U put out when they made the acquisition, marketing costs are a huge part of all of these OPMs, and the more potential students you have out there, the potential to lower those marketing costs. But then on top of that, you also have, as you mentioned, now a broader sweep of products.

Jeffrey Selingo:

And again, there was that slide that if anybody goes to the investor deck that they put out for this that shows now 2U kind of controlling a larger proportion of all the products that are out there in higher ed. But Michael, I think you're burying the lead a little bit, because I know from our discussions over the summer, that you have your own headline. That you're writing a new book. So can you tell us a little bit about that?

Michael Horn:

Yeah. Indeed, I am Jeff. For better or insane, I am. I have a few book projects...

Jeffrey Selingo:

In insane might be the best way to think about that. [crosstalk 00:16:18]

Michael Horn:

For those that have done this, insane is always the operative word. But I have a few book projects on the burner, but the one that's in the here and now, if you will, it feels like an urgent one. It's a book focused on K-12 education, so sort of my roots in the education space that came out of a second podcast that I started during the pandemic called Class Disrupted. It basically came out of this urgency as I said that I felt that we needed to comprehensively redesign schools to better serve all learners. We're in this moment where we can question so many assumptions. We're going into a third year of uncertainty.

Michael Horn:

The fact that in our system today students start out in kindergarten fascinated by schooling and end up bored, that's actually not a coincidence. It's the logical outgrowth of how our K-12 schools are built, which to be fair, they were a successful design for the United States of America for many, many decades. But in today's day and age, in the knowledge economy in which we're living in which we cover all the time in the context of higher ed and the workforce, it leaves way too many students behind, and not just from low income and minority families, I'd argue, but literally everyone. And so out of the pandemic, in my view, we have a set of choices about what we build out of this devastation and what we choose to create.

Michael Horn:

The book is really about framing those choices, and for me, putting some stakes in the ground about what I think schools should be doing based on the research that's out there. And it's everything from mastery based or competency based learning, to upending our teaching model and moving to more co-teaching arrangements and things of that nature. So I'm still looking for a title. If anyone has any ideas and you're listening, shoot me a line. But the draft manuscript is due this fall, and then the book should be out in early summer, probably around July. So that's on my plate, but I know you have a few things you've been working on too. Maybe not books, but you're certainly doing some writing right now. So what's out there that you'd flag for our listeners?

Jeffrey Selingo:

There's no book yet. I actually took off a lot of time this summer to recharge my batteries and to think about a new book idea. But I did publish two short white papers on enrollment and pricing, that update paper is from a few years ago. The first iteration of the pricing one was something I did with you in which [inaudible 00:18:35] joined me on this second iteration. Rick, as many of our listeners might know, is a former CFO in higher ed and now consults with colleges on program mixing and pricing, and we collaborated on this one. There were two takeaways from that paper, and again, we'll put it in the show notes.

Jeffrey Selingo:

One was around really aligning demand and costs of programs. Last year on Future U, we talked about a number of papers that we did and helped out on with Burning Glass if you're around new programs that were started, that didn't have a lot of demand, didn't have a lot of graduates. Matt and I worked on a paper, Matt Sigelman from Burning Glass and I worked on a paper around trying to build new demand for programs coming out of the pandemic. And one of the things that Rick really added, I think, to this pricing paper was that pricing in higher ed really needs to align with the demand for programs, and the cost of offering those programs. As we still know, many institutions can't tell you what it costs to provide a degree in X in over a year or over four years.

Jeffrey Selingo:

And coming out of the pandemic, I think that's going to be critical. The other thing we talked a lot about was differential pricing. Michael, I don't know. Are you a fan of Disney?

Michael Horn:

I personally like it. I'm not sure that my better half shares my sentiments, but I personally like Disney quite a bit.

Jeffrey Selingo:

Well, as you know because I tweeted about this this week, Disney changed their fast passes. So they're now charging for them in a different way, and it was fascinating going through that. They're doing everything from search pricing to personalized pathways through the park. And as I was reading that story about... I can't even imagine the data work that went in behind this to determine how to price these things, when to price them, things like that. I started to think about what if we brought more differential pricing to higher ed? And as people noted when I tweeted that out, well, we already have differential pricing, but of course it's hidden from most parents and students in terms of merit aid and things like that. But what if we made that more transparent? [crosstalk 00:21:04]

Michael Horn:

It's also backward. We put our worst price upfront, and then you discount from there. Whereas generally, you go with your low price and then you have the ad-ons. But yes, Jeff.

Jeffrey Selingo:

Right. But we know so much now about demand. And again, if we go back to what Rick said, if we start to figure out how much these programs cost, we could potentially do more differential pricing. So Michael, I said upfront that I've been less productive this summer because I took off a lot of time to recharge, we spent time in New England, the Jersey Shore where I caught up on reading and a lot of other podcasts. So as we wrap up today, I'd love to hear about your summer. What did you read? Did you listen to anything that might interest our listeners?

Michael Horn:

Yeah. Yeah. A, I would say that's not not productive time. Recharging is very productive, so good for you. And funny enough, my vacations were also spent in New England and the Jersey Shore and yet we didn't get to meet up during them, so we'll have to rectify that in future. But I would say it's continued to be a strange summer up here. But outside of almost finishing the last of Walter Isaacson's books, I've been on this mission to read all of his books and I'm almost done with Code Breaker which I will say is very relevant for the current crisis with the pandemic and the vaccines that have come out to allow us to hopefully get out of this. Hopefully people listening, get your vaccines. But also for those interested in research in higher education, it goes into great detail about the academic rivalries that result around these breakthroughs and discovery and who takes credit for it in the patents and dollars that that means for the individuals, companies and institutions.

Michael Horn:

It's quite fascinating, I think, on multiple levels. I'll add that I'm looking forward to Paula Blank's new book that's coming out this fall which I've had a chance to read and I think will be an important one for policy makers and particular in higher ed. The only other one I'll mention, Jeff, is I've got to read Tom Eisenmann of Harvard Business School's book, Why Startups Fail. And I thought it was interesting for aspiring entrepreneurs in the higher ed space starting companies out, being wary of the traps, if you will, that you can get into both in the early stage, but also later stage after you've built a business, and just to be wary of them so that we can see more success, frankly, and actually contributing value.

Michael Horn:

But I'm curious to hear what's been on your playlist or your nightstand. You also got to travel abroad for work actually, so I think people would love to hear what that experience was like.

Jeffrey Selingo:

So I wrote about that experience on LinkedIn, so we'll put that in the show notes as well. But I will tell you, I went to a conference. There was only about 50 of us in Madrid, Spain. It was the Bankinter Foundation put on a conference around the future of education and work. It was great. I got to meet some US presidents I hadn't met before, as well as a bunch of folks from Europe in this space. But getting there and back was not easy, I will tell you. There were a lot of protocols around testing and what you had approved, but there are a lot fewer flights now, and when something goes wrong on your trip, as it did for me getting out of DC, it just backs everything up and it's not easy to switch flights like it was back in the pre pandemic days.

Jeffrey Selingo:

But I got some reading done as a result on that trip because I was stuck a lot, and also listening. I really am getting into the how I built this podcast, which is really focused on entrepreneurs obviously. But Guy Raz who's done a show also has been doing a virtual summit this summer, and he had one of my favorite authors on who's Adam Grant recently. It's an episode that I really think that college leaders or anybody that works in higher education should listen to that particular episode, because Adam talks a lot about how ideas take hold and when we stick with a product for too long, and what happens when that happens.

Jeffrey Selingo:

I thought a lot about the analogies with higher ed, is that there's so many ideas percolating now because of the pandemic, which one should stick and which one shouldn't? And Adam talks a little bit about that. And then he talks about this idea of having one product for too long. And I think in many cases, that's been higher ed. We've had one product. The residential experience in a lot of cases. The four year degree, and what happens to companies that stick with those products for too long? So highly recommend that episode in particular. So Michael, as we close out this episode of Future U, can you tell our listeners what to expect in the next episode?

Michael Horn:

Yeah, absolutely. We're really excited, as we said at the top, that we're going to be in person and get to have an interview in person as well with David Thomas, the president of Morehouse College. Look, Jeff, the big themes that I'm excited about exploring with him are first what they learned and what Morehouse will take away from the pandemic. It's very easy to say, "Oh, we're never going to do X again from the pandemic." But what are they going to take forward and keep, I think, will be really interesting, and it's a big theme that we're seeking to explore throughout the year. And then secondly, I'm excited to dig into the conversation we had earlier about 2U. They have a very interesting partnership with 2U where they're launching an online bachelor's degree program this fall, and I'm curious how that relates to their broader strategic plan, Jeff.

Jeffrey Selingo:

Yeah. And I want to mention we're also going to start taking listener questions in the next episode, so please reach out on social media or in the Future U podcast webpage, futureyoupodcast.com is the webpage. If we answer your question on the air, you're going to get this fancy Future U Tervis Tumbler that we're going to be giving out this year. [crosstalk 00:27:19]

Michael Horn:

It is awesome.

Jeffrey Selingo:

It's awesome. If you go on social media, you can see a picture of it. But that's it for this week and for this opening episode, thank you all for listening. Please tell others about the show if you like it. Please subscribe to it and of course rate it on your favorite podcast platform. Until next time, take care and we'll see you soon.

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