Welcome Back!

This is Future youe with Jeff Salingo and Michael Horn.

And welcome to Future youe and the start of our third season. I'm Jeff Salingo along with Michael Horn. Michael, could you believe it's our third season of Future youe?

I think when we started out, we had no idea what would come of it, but people seem to listen and hopefully they're still listening. So it's a heck of a lot of fun.

And we're here in our shorts and T shirts because it's so warm still from the, from the summer. How was your summer? What did you do over the summer?

Yeah, it's been a great summer. It's been a crazy summer. My wife, for some of you who follow me on social media, may know, launched a frozen dessert truck. So that's been very tasty for our family this summer. We've had a lot of taste testing and a lot of fun with it. And it sold well also. So things are going very well. The flip side of that is that I've had a little less time to be productive on the work front. Hopefully she's not listening and grimacing, but. But it's been great. I've gotten to spend more time with my daughters and I've traveled less, which has been terrific because literally today my new book, Choosing College comes and travel's about to get very crazy. And I was able to spend a lot of time in the summer wrapping up the manuscript, final edits, and then doing all the things that, you know, you actually do when the book is done, which people say, oh, aren't you relieved? Well, no, actually, now you have to spend all your time writing op eds, planning out the publicity, planning out your travel. And actually it gets quite busy. So it's been really exciting and really starting to understand the messages of the book even better than when I wrote it.

And have you been getting a lot of free samples from. From that, from that business?

Yeah. Anyone?

And is that just more of a seasonal business or. She'd do that.

Great. Great. Yeah. So. So it's been a seasonal business. Was the initial idea go to about Halloween and start up in Patriots Day. For those that don't know, we have Patriots Day in Massachusetts, but she just signed a lease actually for a brick and mortar space. So now she's going to do some year round thing. We're going to be building out a kitchen this fall and winter for that space and all sorts of crazy. We're gonna say we'll have to bring them on set and our guests come. Can Partake of it, but that would be great. Yeah, no, it'll be fun. So what about you? What was your summer like?

Well, I'm about, basically a year behind you in terms of book writing. So my book will come out probably next August. The Choice Looking inside college admissions. And so right now I am in still writing mode. Manuscript is due this fall. And so I've been getting up essentially 5am every day, seven days a week, and writing through probably most of the morning and sometimes the afternoons. I try to keep my afternoons free as much as possible, but writing every morning when I seem to be more

productive, the morning time is the best time for me to write.

And you know, there's this 5am Writing Club hashtag on Twitter, which kind of keeps me honest to actually get up at five and my kids usually get up around seven or so. So it's perfect, like two hours to get stuff done. I try not to get on Twitter or read the newspapers or read all those morning emails that people seem to send. Right, those email newsletters. Yeah.

Emails from me saying, hey, my book is out.

So I try not to do that and try to focus on the writing. But it's going really well. I'm really happy with where the book is. I mean, I didn't really cover admissions in terms of higher education in the 20 years I've been covering higher education. So I had a lot to learn. So the only regret I guess I have is there's a lot of stuff that's kind of on the cutting room floor that's just not going to make the book. It really helped me understand admissions and all the people I talked to, but I'm not going to be able to unfortunately, I think get in the book, but hopefully repackage it in other ways.

Well, what I will say is your newsletter has done a good job of teasing your findings over the last several months. And it's been, I mean, it seems like you're digging up fascinating nuggets by literally being in there with, with, with these admissions offices as they're making some of these choices, reading some of these applications.

No. And it's been fun and obviously there's a lot of books on, on admissions coming out in the next year. So it's going to be a fun space and we're going to be dedicating a whole show coming up to you and your, your co author, Bob, talking about choosing college. So really looking forward to that and hopefully our listeners are, are too. But let's talk a little bit about some of the summer Storylines that have been, been kind of out there and about. There's been a lot of news. Higher ed news doesn't stop for the summer, even though the Future youe Podcast does a lot of news around Amazon making this big splash. 7, $800 million that they're going to spend on worker training. And I'll never forget waking up that morning reading that story, I think in the Wall Street Journal and it didn't mention colleges at all. And usually when big Fortune 500 companies spend a lot of money on worker training or retraining, somewhere in the story it mentions post secondary education and it didn't at this, this time. What's, what's going on?

Yeah, so I mean my take is that a lot of professors for a long time have said job training, not our business. And Amazon said, okay, not your business, we'll do it ourselves in effect. And in some ways they're taking from their playbook that they did with Amazon Web Services, where for those that don't know, they built this big cloud computing infrastructure. And then it was basically their first client was themselves. Amazon itself was the client for aws. And then they said, hey, there's something here, let's open this up in the lab. Other people to use aws. I wonder if we're seeing a similar thing here in education, which is to say that they're looking around and saying we need to upskill 100,000 of our 300,000 employees. One hundred thousand of our 300,000 employees. And we don't see a lot of places, third party places out there that can handle this. The colleges and universities aren't keeping up with the curriculum as fast. They don't have the faculty perhaps that are on the same researching the same questions that we need answers to to upskill our team. And so we're going to essentially these education entities ourselves. It sounded like that they're going to spin them out ultimately and have them be standalone entities, although I guess we'll wait and see on that for sure. And Amazon basically said we're going to go it alone and do it ourselves. I would say super smart move. If you have decided that this is a core issue for you strategically, that is, whenever something is not good enough in the value chain, you've got to integrate yourself and do that. And if you've decided it's interdependent, meaning, you know, you're not going to quite get the education right for what you need and you need to just have a lot of turns on that and iterate a lot, then you need those things to be super close to the core. And that's what Amazon is doing. Let's see if they open it up then and then allow other corporations to train their employees there. That would be game changing, I think it would be.

And I'm wondering then, you know, who do they open it up to to? And, and do we now see a more aggressiveness on part of higher education institutions to sign more of like the Starbucks types of deals or the Disney and the other Fortune 500 companies that have partnered exclusively with colleges and universities? Do you, do you see a change in strategy maybe for higher education saying, hmm, Amazon's now a competitor to us, maybe we need to start to go out and get ahead of them?

I think you're seeing a handful of institutions still doing that and there's companies now that exist. Arizona State launched in stride. There was already Guild Education. We of course had Rachel on the show in the previous season. And so there's certainly these interface entities, if you will, that exist to navigate the tensions and unpredictability between what corporations need and what universities are built to deliver. I think you're going to see more movement in that. We're seeing that other entities, Bright Horizons, for example, seems to be playing a more active role in this as well. So I certainly think there's going to be a trend in that direction. My big question remains though, when there's a recession, will, will, will the colleges and employers sort of stick at this? Right. I just don't know. You know, right now part of this

is more for talent, right? You have to be different.

We're competing right now. We're trying to differentiate. And does that stay when there's softness in the market? And what will that do and what will that do to even like Amazon's calculation? In, in some ways, $700 million is a huge headline number. In other ways, over three years, $700 million is somewhat of a rounding error for them. So I'm not sure how to think about all these trends right now. I think they're significant and they're certainly something to keep an eye on, but it's not entirely clear where it all goes from my perspective. But the flip side of this, I guess, Jeff, is another story that I've been paying attention to, but don't understand nearly as well as you do, which is the flip side of if employers are going to be getting into higher education essentially themselves directly, well, then presidents at colleges, their job insecurity may go up as well. And we've seen a lot of Presidents, it seems, depart over the summer. From my perspective, it's felt like a big number, but I would love you to put in perspective on what's driving the turnover.

So I don't know. Sure, it's a, it's a bigger number than in the past, but what I think we're seeing is a much shorter tenures, for example. So, you know, the average tenure now of a college president's down to about five years, you know, from seven, even just a couple of years ago. And I think summer is kind of an appropriate time for this to be happening. You know, many boards meet in May, many presidential contracts are up at the end of June. And so I think the board gets together in May, they get a little nervous about where, especially in these tuition dependent, enrollment driven institutions. Hey, enrollment's not quite where we expected it to be. And that's the end of it for many of these presidents. The one in particular that I was kind of interested in was Marist in New York, because the previous president had been there forever, 25 plus years. And the new president was really moving into an expansion of what they were doing, not only in their graduate programs, they were opening up a campus in New York City, they were going into medical education with a medical school. You know, Marist is kind of a regional private. And it just seemed like they were moving in directions that were going to cost a lot of money. And I think that's the other thing that you see happening right now where the board and the presidents may not be aligned in terms of strategy. And I think boards now are getting much more involved in short term strategy and I might even say short term management. And, you know, and that's always been a bright line, right, in terms of,

especially with academic freedom.

Academic freedom. And boards have always been, we're not management, we're oversight and having that fiduciary responsibility. But I think they're starting to get a little bit more uncomfortable with the numbers and where they are and where higher ed is going. And so I think they're getting much more involved now. And when they do, they don't necessarily see the president taking on what they think should be the strategy of the institution. And they're much more willing to cut loose now rather than, you know, well, let's see what happens. Because they're nervous about the numbers, right? And we know that at many institutions this past spring they missed their enrollment goals or their, their tuition discount rates were much higher than they expected. And as a result, I think the boards are starting to say, you Know, we don't have a couple of years to figure this out. We have to figure it out. Now.

Is it your sense that the boards are paying more attention to some of those numbers than they have in the past? Because, I mean, the tuition discount rate has been going up year over year over year and we passed the 35% mark several years ago. That was supported, supposed to be sort of the, the oh my goodness moment of schools are going to start to, to decline. And it didn't feel like boards necessarily went into an activist mode at that time. What's changed?

Well, I think that, you know, I think most people used to get on boards because it was just a fun thing to do and now it's real work. So I think that's changed. Right. They feel like, well, this is a commitment that I have to pay attention to. I also think that they're paying much more attention to what I would call, as I said earlier, the short term management rather than the long term strategy. And that actually kind of worries me. Right, because most of these people come, are coming from the for profit world. They work for companies that are thinking about the next quarter and so they're more interested in how are we doing year over year. Rather than looking at a five or a ten year time horizon, which I think boards used to do, they used to look at that longer horizon, which is why we've had institutions that have been around for hundreds of years. But again, they worry that the institution is not financially sustainable even in the short term. And so they're much more focused on these, on these, on these local, around these short term.

I mean, as we think about the future of higher education, monitoring how boards are actually governing those institutions is going to be absolutely critical to keep an eye on. So if that trend persists and it becomes more short termism, if you will, like so much in our society, I mean, I think that could be a detriment. It would worry me even as I think they need to be paying a closer eye on the fiscal sustainability of a lot of these institutions is my own perspective on the question. Right.

Well, and we should note probably for our listeners, this is not a format that we're going to continue on for the entire season. We're going to have, we're going to have guests and interviews on coming up in our next episode, but this is our first episode back and for now we're going to take a quick break and come back and continue to talk about some of the summer storylines that we've had. We'll be right back.

This episode of Future youe was made possible with support from the Academy for Innovative Higher Education Leadership. The Academy is a partnership between Arizona State University and Georgetown University and is the premier training ground for those who aspire to senior leadership positions in higher education and those who want to lead organizational change at colleges and universities in the future. This episode was also made possible with support from Entangled Solutions. If you want to shape the future of education, Entangled Solutions would like to hear from you. Entangled Solutions is hiring smart, mission driven team members interested in helping world class institutions solve their most vexing challenges in learning and education. Learn more at Entangled Solutions.

And welcome back to Future youe. Jeff One of the storylines from the summer that really caught my attention and I still don't know what to make of it because it's just, I guess I'm not diabolical enough to think this way, but was this story broke that parents are disowning their children in order to be able to in essence, afford college? Can you, can you break this down a little bit more of what was going on and what does it mean for the future of higher education? Because it certainly got a lot of people focused on the question in a way that Varsity Blue scandal did earlier.

Right. And I think, you know, ProPublica did this story out of Illinois where the University of Illinois actually just start discovering there were more people giving up guardianship of their, of their children in order to make them independent so that they would qualify for more financial aid. It's unclear still, to be honest with you, even after several weeks now of this, exactly how big of a scandal this really is. Some people tell me it's not as widespread as, you know, the stories made

it out to be, but it still happens in 20s.

Yeah, we may be talking, you know, dozens here, not hundreds of thousands. And, and, and the, what really frustrates people, I think in Illinois is that there were, you know, thousands and thousands of students who didn't get aid in, in Illinois. So it's, it's a, it's not as big of as that problem in terms of students not getting aid. But I kind of comes back to me is that this idea that even middle income families, because many of these families were middle income families who decided to give up guardianship are really frustrated with where tuition's going. And you know, and I've written recently about this idea of have we have all of these scandals put together, have all the crises about student loans and other things show that we've kind of reached peak tuition that colleges really can't. They're bumping up against the max. And, you know, there was a story I wrote back for The Chronicle in 2005. It's fascinating to me now about when a couple of colleges went over the $40,000 mark in tuition. And the story was all about have, has, have we reached the limit now. Right. And now, now 60 is the new 40. Right. And as I think about my own kids, 529 plans. Right. I think of what am I budgeting for that? But at some point, right. We can't be talking about colleges that cost $100,000 a year. And I understand these are, you know, these are, these are the sticker price. Right?

Sure.

And not everybody pays that, but some people are. And I think what's increasingly happening is that people who can pay are not willing to pay. And we, we saw that and in fact, we heard that from a number of selective colleges that missed their enrollment targets this year. They told me that what, where they really missed was at the top in terms of income and its parents not willing to pay anymore for that, for that, that, for that prestigious degree, unless it's from Harvard, Yale, Princeton, you know, Stanford, maybe a few others.

Yeah. I mean, one of the arguments that I make in the beginning of choosing college is that one of the things we see is despite all the surveys that say the students are going for jobs, it actually feels like it's more their parents because of this financial calculation that they're doing now in their head where they're like, wait a minute, I'm spending all this for what on the other side? And then that's sort of getting pressured, if you will, onto the kids to feel that if you will, in some way. And it's almost of the college's own making, like they don't want to be responsible for this return on investment question in many cases. But because it's gotten so expensive, it feels almost unavoidable, is sort of my perspective on it.

Well, and what I think is going to have to happen is that we're now going to have to focus on. On the cost side. Right. The idea that maybe we could do more tweaks on the pricing side, maybe we could find out more ways to help students afford college. But it's clear to me that we really have to start to tackle in big ways the cost side because we cannot continue to have, even though we only have like 1 to 3% increases in tuition now, we can't continue to have these big increases in.

Yeah. So. And I wrote A piece for Forbes over the summer about five reasons why in my opinion free college doesn't make sense. And one of them was around this, that I think we need the disruptive innovations to come in these lower cost programs that fundamentally reset what we think of as tuition. Because I kind of think this, this bending of the cost curve conversation that's from healthcare that we're trying to port over in higher education, it might work around the margins, but it's not going to make the significant changes. We really need to rethink in some cases, I think what this program delivery looks like. And I continue to be intrigued by these hybrid campuses that are popping up, this mix of online with these brick and mortar spaces. I think that centering in communities and so forth I think is going to be an important piece of it. I don't know what it means for rural students but, but I think for, for much of the population that goes to college today, I think this will have to be part of the answer.

Yeah. And I think we're going to have to again figure out, I think where the biggest innovations are going to happen in this space in the next couple of years are around this pricing side, around the cost side. Can we reduce the cost so we reduce the price to students instead of focusing so much on how can we make this more affordable to students. So somewhat related to that is on the graduate side, we saw a number of stories this summer around the OPM market, the online program management market and a number of institutions and providers running into some issues mostly around enrollment and slowing growth in enrollment in these programs. Can you talk a little bit about that storyline and kind of what is a question I get often? What is the future of, of the OPM market in general?

Yeah. So a couple things I think happened. One was a continuation of a storyline we started to pick up on at the end of last season of Future you, which was people were questioning all the revenue that was going into these OPMs from, from, from these campuses that signed these deals. But then the other shoe dropped in the L A Times where they looked at USC and said well it seems they've way over budgeted on the cost side to sort of account for demand that maybe isn't there. And so got themselves into a bunch of financial trouble was the implication of that set of articles deeply controversy with he says, she says sort of things going on. But, but the point was OPM's clearly under attack. And then to you a few weeks ago on their earnings call out of somewhat nowhere from my perspective Made this announcement that, hey, the market's getting a lot tougher. This revenue share business, we don't really think that's the future. We're going to have to go much more to these paid, paid for and excuse me, pay fee for service arrangements and much shorter programs with Get Smarter and stuff like that that are not full master's degrees programs. And the cost of acquisition is going up significantly because, hey, it's really competitive out there. A lot of students online, it's not what it was 10 years ago. And the stock price just dropped like a rock. I mean it stunning. I think for those of us watching in a way that I, to me, it felt disproportionate to what they had said personally because the value of what they acquired Trilogy alone for was almost more than what their market cap was by the end of this drop. But I think the bigger storyline of in terms of what's the future of the OPMS is that, you know, we've had Chip Palacek, the CEO of 2U on a couple times and some people know John Katzman, who founded 2U with him and then went off and created Noodle Partners where he was basically like, I'm going to disrupt the OPM space and create this fee for service model that is much lower cost, half the price of what these OPMs charge because the market is just a lot more mature now and people understand what they're doing and there's people at the universities that can build online programs. And I think this sort of says, hey, John, may be right in that direction. I think that, that Noodle Partners has a strong vision and full disclosure, I'm on the board but that, that, you know, these revenue share arrangements that are taking 50, 60, 65% of revenue just aren't sustainable for the colleges in the long run. And we're starting to see the other shoe drop of disruption in that market where it's going to be much more fee for service arrangements, much more. I think universities doing a lot more for themselves in the longer run, personally, is what I think.

Well, and I think a lot of them, and we've identified this now a couple of times on the show is are these shorter programs? Right. And I think the acquisition when 2U made that now a couple of years ago of Get Smarter really was, was an indication of a smart move by them. Right. Even they thought that kind of short programs were a big part of the future. It's fascinating to me. I got a chance to spend a couple of weeks ago, spend some time with business Deans of top schools at Deloitte University. And I asked them, I said, how many of you offer a single course? And not one hand went up. What if I wanted to take an individual class? If I just wanted to come in one day and pay. Pay you to take a class? And they didn't know what to say. They didn't know what to do. Now some of them were. It's interesting, they blamed it on their student information systems. Well, we don't know how to like, we don't know how.

Fascinating though, because I was at Deloitte U, I think, four years ago with the same audience and not the exact same question, but the same dynamic where I talked about the disruption in the NBA and it was the same silence. So it's like they're paralyzed.

It seems they just can't. They can't learn.

Yeah, I mean, I think we both feel that the Masters maybe has reached its own peak and we're seeing a disruption into shorter programs that may add up to a Master's over time, but it's not going to be the end all. Be all that maybe it has been for a lot of these schools.

So, Michael, we started our show talking about this summer, but I hope the summer wasn't all work for you. Did you do any interesting kind of listening or reading that our listeners should know about? Maybe other podcasts or other books that

you might want to recommend? So I would say my summer was actually spent. I'm normally a big podcast listener, but I've been on a audiobooks kick, if you will. And so the. And I'm on a Walter Isaacson kick right now, so I don't know if that's a good thing or not, but I did Leonardo da Vinci by him and I'm almost all the way through Steve Jobs now, which is sort of feels like catch up for me, but. And then in terms of reading, currently reading Academia Next by Brian Alexander, who's a futurist in the higher education space. His book doesn't come out for several months from an academic press, but. But very fascinating look at the trends that are going on in higher ed and what that might portend for the future. And then of course, I had to get a couple amwriting podcasts in just to keep me motivated. What about you?

Yeah, well, I love the hashtag am writing podcast as well. So I think we're both big fans of that. I'm on the Facebook group too. So for any of our listeners out there writing, highly recommend that podcast because it kind of keeps you motivated and and when you listen to it, you realize I'm not alone because writing is a kind of a solitary type of activity. And you start to realize there's a

community around you and they go through the same whims of self confidence, doubt

and so forth, the same issues. I've been reading mostly nonfiction, a little fiction. A friend of mine recommended the Dry by Jane Harper, an Australian author of a book that took place in Australia, which I found fascinating and kind of a good page turner. And, and it's kind of nice to get out of nonfiction once in a while. All my other nonfiction has been mostly around education. I'm starting to dive into your book the Years that Matter Most, which is Paul Tuft's new book coming out in September, Grown and Flown, a new book by these two women on Facebook who

run a they run a great group.

They run a great group for people whose kids are essentially grown and flown and leaving the nest.

They won't let me in it because I've got five year olds.

So it's been great. So it's been a great summer of nonfiction reading and the amwriting group. So looking forward to maybe picking up some more fiction as well as when we get onto this fall. So we're going to be moving into our next season here in future. You we're going to be bringing on some guests. Guests pretty soon, including Mitch Daniels, the president of Purdue University. But I wanted to know for all of our listeners out there that we're going to start taking listener questions.

Yeah, I mean this is going to be a new segment that we're going to debut. We've we did our last episode of last season where we answered basically it was an ask me anything show where we where we did several questions from listeners. But at the end of each episode now we will take one listener question. And so we encourage you to tweet at us either at future you podcast or at either of our personal handles, Michael B. Horne and Jason.

Jason. I don't even know my own handle. There you go.

I follow you so much and so we encourage you to any questions you'd like us to address in the podcast. We would love to because as we kick into this first out of this first episode and into the real full season with our customary format of guests and us commenting on it, it we'd love to engage with you even more than we have. So should be fun third season and I'm excited to do it with you.

I'm really excited too. You know, I was a little reluctant to start this podcast a couple of years ago. I didn't know if we could remain committed to it, but it's been a lot of fun. Been getting some great feedback from all the listeners out there. So please keep tweeting at us, emailing us. We love your suggestions, suggestions of guests and others, things you like, things you didn't like, things you didn't agree with, things you agreed with with. Would love to hear from you. So until next time, I'm Jeff Salingo.

And I'm Michael Horn. We'll see you next time on Future youe. Hey folks, Michael Horn here. Hope you enjoyed the latest episode of Future youe. And just a reminder to please subscribe to us on your favorite podcast platform. And if you like the podcast, rate us so that others can find us and find out about the good conversations that we're having here. As always, thanks so much for listening.