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For Whom The Bell Tolls, Time Marches On
242 Plays2 years ago
Phil, Morgan, and Neil look at multiple indicators of financial stress and existential crises at colleges and universities and how this can change the online education and EdTech environment. Given the barrage of negative news stories, the trio try to find a positive lens where possible into the nature of change.
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Transcript
00:00:00
Speaker
Bye!
Introduction and New Year's Positivity
00:00:08
Speaker
Hello, and welcome to our second episode of the year with online education across the Atlantic. And great to be joined by Morgan and Neil. And Morgan, basically you're, I don't know if this, how much this goes back to your new New Year's resolution, but you were honored to be more positive this year. And the news is not making that easy at this point, is it?
00:00:32
Speaker
It most definitely is not, I think it's a plot against me on the part of big tech and higher ed and the government and basically they're all aligned in unison to make my life difficult to understand and grim. It has absolutely nothing to do with my inner personality and tendency to see the glass half full of toxic waste dump effluent
00:00:59
Speaker
My nickname for those of you who don't know is Bubbles, Bubbles Morgan.
The Ubiquity of Negative News
00:01:05
Speaker
Bubbles, okay, that's very cheery and we're glad to share our pain with you across the Atlantic, Neil. I mean, you were just saying
00:01:14
Speaker
It's hard to read anything at this point. Look, we could have a really good sort of tennis style rally around pain and negative news stories, I think, across the Atlantic, because, you know, in the same vein over here, just thinking about
00:01:31
Speaker
you know, kind of conversation today and thinking about is there is there anything that's positive out there, anything of kind of interest and then I was kind of confronted by a new story that kind of broke today in the UK around franchise provisions, so universities franchising their provision to other providers and instances of fraud being
00:01:57
Speaker
taking place in there.
Eastern Gateway College's Federal Funding Issues
00:01:58
Speaker
So that was the one thing that beyond the kind of obvious came to me today, which was similarly in a negative vein. Is there anything that you guys can offer that can cheer me up?
00:02:15
Speaker
that we're in the same situation as you so you're not alone. That's probably the main thing. Okay, okay. Well, here was another unknown one that came up is Eastern Gateway Community College. We've been getting a lot of interest ever since Morgan wrote her post about an update on
00:02:32
Speaker
online education at community colleges, which is good. I think it's helping getting get a discussion around their unique needs. And, you know, so there's some positive that that area is really growing. But in the US, Eastern Gateway Community College went with sort of an OPM model, but in a unique way. And then they were doing essentially free community college
00:02:58
Speaker
for union workers, which on the surface that sounds good, but the federal government jumped in and they were saying, listen, what you're effectively doing is subsidizing your online program with federal financial aid for other parts of your school. So you're essentially repurposing federal grants to go this way.
00:03:20
Speaker
They ended up pausing all enrollment and then they shut, they're shutting it down. And this was a large program. I think it was over 30,000 students. I was up there in terms of one of the largest.
00:03:33
Speaker
Yeah, it had quickly become one of the largest. And so that's all bad enough by itself. But I hadn't really been following the overall Eastern Gateway Community College. But a news story came out recently about all kinds of other fraud from the institutional leadership. And where it's almost like the way they had the financial aid problems, well, that turned out to be one of the least of their problems at the school.
00:04:00
Speaker
and it was you know a twist and I think pretty good chance some of these people might be going to jail but that's uh no that's not a very good thing to share with you Neil to cheer you up unless it's you know you like other people having misery as well.
00:04:17
Speaker
Yeah, yeah, schadenfreude maybe. Yeah, well, that's interesting. We've got the fraud theme as well across the Atlantic. So again, another shed. Let's try this one.
Upgrad's Strategic Move in EdTech
00:04:30
Speaker
The news is coming out and it's not confirmed yet that
00:04:33
Speaker
Upgrad, which is an EdTech provider in India, is acquiring Udacity for $80 million. So if that turns out to be accurate, I mean, to me, that's interesting on several levels. Let's start with the positive, as much positive as we can. In the Indian EdTech market, it's been poisoned by Bijus and their financial crisis and fraud.
00:05:02
Speaker
That's real fraud, if you ask me, some good financial fraud there. And it was looking like it was poisoning the whole Indian EdTech ecosystem. Well, one positive thing, this is showing the strength from Upgrad that not everything from Indian EdTech is going to be associated with by Jews and investors completely losing confidence. So there is an Indian EdTech provider that showed some real strength and
00:05:29
Speaker
potentially buying Udacity. The other thing that's interesting to me is $80 million, goodness, they started the same time with the same fanfare as Coursera. Coursera, of course, is now a publicly traded company market valuation over $3 million. So what a contrast between those two outcomes between two companies. But that was interesting news. And like I said, there's some positive aspects to it.
00:05:59
Speaker
Yeah, definitely. Though I'm going to try and extract the grim news out of that news as well. I just last week wrote in the blog post about how the Baidu's news was depressing the Indian edtech sector. So this deal happened entirely to prove me wrong. Oh, okay. Well, we'll take it now. Yes, absolutely.
00:06:23
Speaker
On an interesting note, I just noticed, come across my inbox, two new-ish OPM deals, one for all campus and one for BISC. The BISC one in particular was for certificate programs at, I think it was Vanderbilt and University of British Columbia. So that's sort of interesting. Also proving us all wrong in terms of the OPM spaces in the US, at least, as being a little somnolent, if not dead,
00:06:52
Speaker
Yeah, I wouldn't say we're wrong. I'd say that's the exception that proves the rule is probably a better interpretation of it. But then another one that we just started sharing between ourselves. And by the time this podcast gets released, we might actually know the answer on it.
00:07:09
Speaker
A lot of rumors going on around news coming out of 2U and edX today could be as simple as yet another round of layoffs happening. They're having to deal with their financial crisis, but it could be some further clarity on how they're going to try to deal with their debt problem and give us a taste of what the direction is going to be.
00:07:33
Speaker
So I don't know that any of us have any more details, but certainly want to call out that that seems to be a newsworthy item. Yeah, it's very inconsiderate of them to not announce anything prior to our podcast recording. You must have must have words with it. But yeah, I mean, something I've kind of made mention of, you know, the the UK universities that have recently or potentially due to enter into partnerships with them. I mean, it's just it's interesting to think about
00:08:02
Speaker
what any news may, how any news, sorry, might impact on them. And just knowing the history of partnerships coming to an end for whatever reason, they do have kind of big ripple effects on providers online education ambitions, which we'll maybe talk about later is kind of a
00:08:25
Speaker
you know, important other way of diversifying income at the moment. So, you know, that's going to be interesting to see what what gets announced and what comes out a little bit later, I think. Yeah. Well, let's here's we can treat it as news if we want to or just follow up.
UK VLE Market Trends Analysis
00:08:43
Speaker
But Neil, you put out your U.K. VLE market update, which we found that we time we're now timing our
00:08:53
Speaker
our market analysis report. We do it after years so we can fully leverage or plagiarize what you do in the UK and add it to our report. That was a great report but it might be worth it if you can just sort of summarize and I highly recommend listeners go read the report. It had some great insights in there.
00:09:14
Speaker
Yeah, I'll be putting yours through Turnitin, Phil. Okay. No, but joking aside, yeah, it's something that I've kind of been doing annually just to kind of see the market movements in the UK. And, you know, as you both know, you know, this kind of market moves slowly, but
00:09:29
Speaker
really a kind of continuation of the trends of previous years in terms of those big four players. So Canvas having a really, really good year and winning a number of different new clients and increasing their market share, Brightspace also doing so, and Blackboard really kind of sliding. It's kind of been, I was having a conversation with someone recently and we were kind of
00:09:53
Speaker
struggling to remember when the kind of two more traditional incumbents, Backboarder Moodle, had actually won a significant new client in the UK, and we were really struggling on that front. So, you know, overall market movements are kind of following similar years. And correct me if I'm wrong, but I feel like in North America, the market is a little bit more equitable in terms of
00:10:20
Speaker
Market share than it is in the UK. In the UK, Moodle have a big share, followed by Blackboard, Canvas and then Brightspace. But I think, you know, we're probably moving to a scenario in which the share is a bit more equitable with kind of Brightspace and Canvas growing theirs and the other two sort of declining.
00:10:39
Speaker
But yeah, that was kind of interesting. I mean, I think another interesting thing that I didn't really talk a lot about, but was, I guess maybe because of recent instances, the kind of maybe greater sense of risk of going with someone new. I mean, it's always been difficult for a new product to enter into this market, but there's been instances in which providers were using Owler, which was a
00:11:06
Speaker
a platform on the market for a while, and it was bought out by Coventry University. And then there was another platform called EduFlow, a smaller platform, which was bought by Multiverse, I think it was. And those platforms were used by providers who I think wanted to take that punt on something that was a little bit different. And ultimately, they ended up having to change
00:11:36
Speaker
or some of them have ended up having to change VLEs as a consequence. And I always kind of reflected each year on the market and the fact that it's so locked in with those four players. And then when you do see a new payer emerging,
00:11:50
Speaker
I mean it's kind of in a way nice to see but you know it's also like a little bit of a shame really that those new players have kind of you know sort of exited the market and I think anyone reflecting on the experiences of providers who've gone with those companies I think will be even more risk averse than they might have been previously because of kind of what's happened.
00:12:14
Speaker
Yeah, I think those were the headlines and the kind of interesting aspect. There was a whole bunch of things around AI, which I think we talked about in a previous episode, which injected a bit more interest into this space than sometimes can be the case around products. But yeah, the big headlines are very much a continuation of the same around market movement. I just wondered if there was anything that
00:12:40
Speaker
pitch your interest in terms of thinking about your context that kind of reflected or maybe I'm asking you to kind of give out too much before you do your market analysis.
00:12:51
Speaker
Yeah, I don't know that we're that protective of IP. Morgan, your knee deep in this. Yes, neck deep, I like to think, you know, little data sort of hanging there and don't make waves. But, you know, it is pretty equitably distributed in North America, though I'm sort of struck in all markets for the most part about how many smaller niche players there are. So there's a very, you know, there's quite a big long tail of
00:13:20
Speaker
LMS or VLE providers in a lot of markets. And, you know, sometimes they can, in particular, sectors of institutions, you know, for example, really small institutions, you get a lot of populae. We need to check if that's populae or populae. If anybody's listening that knows, you can send us a note.
00:13:41
Speaker
Yes, and I can always rely usually in the United States on my accent to say, oh, that's the way we pronounce it where I come from and who the heck is going to check. But, you know, there are quite a lot of these sort of small and they change depending on the particular slice that you take of that data. But yeah, that's sort of one of the one of the big
00:14:02
Speaker
things coming along. The other thing I was also struck by is the age of the contracts. And you can't necessarily infer a lot from there, but a lot of places have had the same system for a long time now, north of eight years. And I remember once years ago, Phil, you did a post about that. It was 8.25, I remember.
00:14:25
Speaker
that seems to be a sort of critical point for changing, but I don't think that's necessarily the case here, you know, because I think it's really focused on the moodles and those kinds of systems, but there are a lot of old systems out there, or systems that places have had for a long time. Yeah, well, typical contracts quite often go in increments of five years, so the eight-year key milestone, get an LMS,
00:14:52
Speaker
renew it once at the five-year point. But before the 10-year point, quite often procurement rules say you can't keep renewing. You're going to, even if you stick with the same system, you've got to do an evaluation. So eight years is a very natural point where a lot of schools will do an RFP or a tender, depending on how you want to call it.
00:15:14
Speaker
Well, I think I would add like I've always promoted or described some of the not just long tail entrance, but hopefully new entrance to the market. And I have to say, I have a pretty poor track record or, you know, it's another karma issue. So I wrote quite a bit about loud cloud systems and how they were going with a modular LMS that really was pretty
00:15:43
Speaker
It did some things that people have been talking about for years about having almost like a learning management operating system or a reconfigurable LMS. They had a nice design, Grand Canyon University, which is huge. We're using them and just a handful, but they're really out of the market.
00:16:03
Speaker
I had also written about ALA that they had a really interesting, nice system, very cloud-based, intuitive. They tied it together with a lot of instructional design, but they never really had a business behind what they were doing. I mean, they had some real flaws and you were generous in saying they got acquired by Coventry. Basically, they acquired the IP for nothing or very little.
00:16:30
Speaker
And so that's another one written about Schoology, which is very strong owned by Power School, very strong in the K-12 market. They tried to enter the higher ed market and they had a very compelling product as well.
00:16:42
Speaker
They were pretty unique in having like a news feed type front end. And they were also native cloud and had some good designs. But they got in and they got beat up by the RFP process. They said, we're out of here. We can't do higher ed. Some of these RFPs are too expensive and difficult. And we can't keep fighting. So we'll stick to K-12. So those are three systems that I had hopes
00:17:09
Speaker
would enter the market and make it more competitive, but in the end, all of them fell away. And is there any discussion at all or any examples of providers using things like Microsoft Teams and Google Classroom? Because there's always been a little bit of talk around
00:17:30
Speaker
Microsoft Teams here and there are smaller, there are I think maybe two smaller providers, one using Teams, one using Google Classroom, but it's never really got any traction over here. I just wondered if that's something that's being discussed or... It gets discussed that Microsoft Teams, you might have one or two schools that actually do that. Google Classroom definitely has traction in K-12, huge traction in K-12. And then Morgan, you had said that they get quite a bit of interest in Asia.
00:17:58
Speaker
Yeah, I see quite a lot of that, especially in Southeast Asia as well. And there are a couple of providers that have built on Microsoft 365. I know there's one out of Scandinavian countries. I'm blanking on the name. Another one out of Singapore that does that. I don't know how many times in my life as an analyst, I've been lectured about how the fact that I'm overlooking the
00:18:25
Speaker
the extent to which Microsoft Teams is gonna replace the LMS. Wait, Microsoft Teams or Google Wave? Because I think I heard the same arguments about Google Wave too. Probably, well, I wasn't an analyst during Google Wave, otherwise I'm sure I would have. And in particularly, I often get it about, well, you know, University of New South Wales, but like it's a guy in the engineering school who's doing a lot of stuff with teams at New South Wales. The university as a whole, I believe was still on Moodle.
00:18:55
Speaker
So, so yeah, I'm glad I'm not the only one that's had that, had that talk walking around Microsoft Teams. Well, the beauty of Microsoft Teams, it's so secure that even its own users have trouble getting in and using it. So it's got that going forward as well.
00:19:14
Speaker
But yeah, it's the same conversation if you ask me. It's always around the corner, but no, the only real traction of any of the big tech providers in my mind is Google Classroom in the K-12 space and in Southeast Asia.
00:19:29
Speaker
Other than that, all the talk about Big Tech, it just never pans out. And part of it is, and this is interesting, Big Tech companies are probably smart enough they don't want to get into the complexities of grade books and quizzing engines.
00:19:45
Speaker
and add drop periods and keeping rosters up to date. The very difficult, complicated work that the modern LMS has to manage. So we're in this world where the smaller providers, the companies we deal with, they're the ones tackling the big tough problems. The big tech providers, they'll say, well, we'll do a learning management system, but we're not going to get pulled into all that complexity.
00:20:12
Speaker
And I think that's part of the reason you don't see it is they're probably wisely stay away from fully solving the LMS problem. Sometimes we should have a conversation about sort of the new generation of conferencing tools like the engaged leads and the class and things like that. I had a reader of our newsletter take it up with me this week. So it'd be interesting because I was very down on them initially, I thought.
00:20:41
Speaker
Yeah, it's not going to take on. Oh, you might have just said our next episode, we'll have to figure that out. Okay. But with that in mind, and hopefully that was a positive or at least neutral enough topic to offset some of the news items. The main thing that we did want to talk today is Morgan's going to bring us back down and look at college and university finances and sort of, you know, what that what
00:21:07
Speaker
what that's looking like and what we should be expecting.
Financial Challenges in Higher Education
00:21:10
Speaker
So let me turn it over to you, Morgan. Yeah. My other name can be Dr. Gloom, maybe. Yeah. You know, there've been a bunch of stories in the press on both sides of the Atlantic about universities having a rough time financially and facing closure. You know, there were a number of articles towards the end of last year about the number of closures
00:21:35
Speaker
in US higher education. I think it was 14 institutions closed, which is much higher than has been the case for a few years. There was actually a fairly cheerful, comparatively cheerful report out of
00:21:50
Speaker
a British higher ed sector by PricewaterhouseCoopers looking at the financial situation of universities where they said about 40% of them were facing financial dire straits but that they were pretty optimistic in the long term where they thought income would rise and in the future they've
00:22:11
Speaker
foresaw fewer than 15% having a problem. But there is that structural problem of the fact that fees have been stuck at the same level for quite a few years now. And in real terms, they're worth almost half as much as what they were when they were first set. So universities are looking at a tough structural deficit thing.
00:22:33
Speaker
But in general, there's a lot of bad news on the horizon there. Also an interesting piece out of the Chronicle about, again, about Wisconsin, and I've written about that a little bit as well. But perhaps let's open it up. Would you agree with my assessment of that PwC report, Neil, or am I missing some of the British nuance there?
00:22:57
Speaker
Yeah, I mean, I thought it was a nice report and pretty balanced in that sense. It certainly wasn't akin to an article that was in the Daily Telegraph that said the collapse of our universities is the best thing that could happen to Britain. So it was a bit more balanced than that particular take. So yeah, and I think, yeah, it provided, it did provide balance because
00:23:21
Speaker
You know, there's so much negative stories that, you know, it can be easy to kind of be too gloomy about things. There has been income growth in international students, UK still a really appealing place to study for international students. We have, I think it's not until 2030 when we're the number of kind of 18 year olds is predicted to decline. So there's scope for growth there.
00:23:51
Speaker
you know something that probably wasn't mentioned in the report was you know there are you know there have been providers moving into online education moving into transnational education you know in a way that presents problems as well but it's
00:24:06
Speaker
I was one of the one of your quotes Phil was ringing my ears when I was thinking about this in terms of I think you're maybe asked around the pandemic when universities should invest in online education and you said maybe I don't know how many years ago it was five or ten years ago decade ago that was the one yeah so you know if we're looking for positives then you know
00:24:27
Speaker
the position that some universities find themselves at least is driving them into areas that perhaps they should have invested in earlier.
00:24:39
Speaker
It wasn't an overly gloomy report and it provided some bright spots and actually some ways in which universities might look to generate revenue. I mean, one of the suggestions that stuck out for me, and I couldn't find the rationale for this, was actually the provision of short online courses as a potential revenue stream. That was interesting for me because I think that's an interesting
00:25:05
Speaker
interesting idea and one in which you would have been interested to know where that idea came from. But it was a good one.
00:25:14
Speaker
You know, it is a really tough situation here at the moment. You know, one of the things I've been doing recently just to add to my pain is looking through some of the annual reports of universities and just seeing, you know, the challenges of things like inflation and looking at the kind of percentage increase in things like energy costs, you know, is a really interesting aspect of that, quite apart from the things that, you know, are known like the capped fee.
00:25:42
Speaker
But most of the reports tell a positive story around international growth, but the risk there is over-reliance on international students to cross-subsidise other activities and the risk of over-reliance on different markets.
00:26:00
Speaker
At least the PwC report provided a bit more balance around potential positive things that might happen and potential avenues that universities might take to kind of alleviate the situations that they're in at the moment. But it is tough times over here at the moment for sure.
00:26:22
Speaker
I would definitely agree with the positive spin you have, and we see that in many different areas.
Existential Challenges and Need for Innovation
00:26:29
Speaker
This is an existential issue. There's a lot of issues that higher ed has rejected even thinking about in the past.
00:26:38
Speaker
that now it's like you have to think about it. And obviously online education is a key part. What is the online? What's the hybrid? How does that fit within the mix? And part of what that's done is it's pushed it up from just being an associate dean with a specific graduate program or continuing education department up into like the provost and presidents level.
00:27:02
Speaker
So things have definitely become much more existential in a good way, like we're willing to look, ask some tough questions and figure this out. The challenge, of course, is higher education institutions are typically not good with decision making and sticking with it. But at the very least, they're now honestly thinking about these questions. And I do think that's not a positive spin. I think that is a positive around the change that we're going through.
00:27:31
Speaker
The other thing I was just going to point out is so much of this discussion.
00:27:35
Speaker
is ends up being well Clayton Christensen talked about you know a quarter or half of schools going out of business within a certain number of year and then everybody's saying see that's not happening but then ignore so you get this back and forth but ignoring ah but it's rising and it's a real issue and just because you could point to one prediction that was off numerically
00:28:01
Speaker
doesn't get rid of the issue. And that part is tiring in the media and online discussion. You're not a Clayton Christensen advocate in terms of what that prediction was. No, but we got to deal with the subject. And I wish there was more honest dealing with what you're bringing up, Morgan, about not just closures, closures, mergers, schools that are not viable on their own with their current model.
00:28:31
Speaker
I think that's interesting just in terms of thinking about the causes and thinking about what lies behind predictions because there was some discussion around what happens if a UK university essentially goes under or goes out of business. And I think
00:28:51
Speaker
some of the kind of guidance was around this was the fact that you know competition is good and if a university you know does go under it's you know it's to be expected in a kind of competitive market environment but that works on the assumption that maybe the market is functioning well and there's not these kind of geo
00:29:14
Speaker
political macroeconomic things like inflation and wars and all that kind of thing that are influencing those things as well as ways in which maybe universities need to change. So there's also kind of an interesting argument around those predictions and what's happening and the causes that kind of add some nuance to all of that. I don't have a follow on from that. What I was going to say is I always think of that
00:29:43
Speaker
of that Hemingway quote about how, I think it's Hemingway, how do you go bankrupt slowly then all at once? And I think of that in terms of universities, you know, and I think both individual institutions plus the sector as a whole, you know, I think with the slow drip of things is important.
00:30:03
Speaker
I wouldn't mind adding something. I don't know if I would call it competition, but I think we need to differentiate the conversation. It's not like take the Wisconsin two-year colleges that you were talking about, Morgan. The market in this case truly is saying by enrollment that something's changed in what students are looking for, what students are available,
00:30:26
Speaker
and what they're looking for, there's something structural that really has to be dealt with. But that doesn't necessarily mean that the challenge is how do we take the same schools as they're currently organized and keep them alive. I think there needs to be a real hard look of
00:30:43
Speaker
Well, then what change does the sector need to do? And, you know, so I guess you could call that competition. But there are elements in the U.S., particularly around two year public schools, where to me, I think it's undeniable that the market is sending a very strong message and there needs to be a change. Not how do we keep these community colleges alive, but a change of what is actually needed and what do we need to move to or what are the alternative approaches?
00:31:13
Speaker
I think that's true, Phil, but I think it also exists at that level of the institution, you know, the market sending a message, how do we change, but also even within institutions, you know, I think the market sends a message about certain disciplines, and there's just such a people in higher ed hate to see something going away, you know, but things go away all the time, you know, we don't teach for knowledge anymore, you know, and we shouldn't.
00:31:43
Speaker
And not that something is equivalent, but disciplines change and we need to be flexible about that. Otherwise, it's just holding on for the sake of that. Wow, you sound like you're backing up the West Virginia transition right now. I think the problem is it's done like West Virginia. It's done in a clumsy, not very thoughtful way. Or it's done too late. I don't know what the answer is, but there does need to be a
00:32:12
Speaker
a better responsiveness. And I briefly looked at a paper out of one of the federal reserves last night, actually, which showed that community colleges are being somewhat responsive to labor needs. And I had a great interview a couple of weeks ago with a guy who actually runs a high school in Passaic County, New Jersey, where they've been doing work
00:32:37
Speaker
based degrees in combo with the community college next door. And it started with additive manufacturing and now it's gone into bio biomedical engineering as well. So I think there are little elements of this, but on the whole, it's like change is bad and we need to resist it. Or survive despite change as opposed to we're going to change what we actually provide and how we do it as a way to react to it.
00:33:07
Speaker
Yeah. Yeah, and I think that's where, I don't know, looking for an upside of if you really feel like you've hit rock bottom, then you have to do something about it. You have to change. You're compelled to change in a way that you might not do when the sun's shining.
00:33:25
Speaker
And so, you know, there's different ways in which you can go about that. But I think, you know, there is inevitably ways in which, you know, universities can improve what they do, better cater for different needs and, you know, getting to a place that some of them find themselves in, you know, maybe just the kind of impetus that they need to kind of
00:33:52
Speaker
get by in as well as to kind of make that change. So, you know, that's another, yeah, another attempt to put more of a positive spin on what's happening.
00:34:03
Speaker
Well, I think one of the opportunities, keep coming back to the two-year colleges, the community colleges in the US in particular, and one of our clients, I can't go into too many details, but the Colorado Community College System, they're being forced to change how they provide online learning in a statewide fashion. They're moving to a core sharing consortium approach. But part of the opportunity is, and so often you hear, well, what about Southern New Hampshire? How do we compete with them?
00:34:31
Speaker
And I think the answer on the competitive level is you don't compete with them. They're very few national brands and you can't go head to head with Southern New Hampshire, but you can provide it differently. And one of the huge opportunities is to go back to the roots. We're a community college. We're moving into online education aggressively.
00:34:52
Speaker
but we're a community college. So it's like, Hey, you can have the best of both worlds, online education with the school that's right down the road with additional resources. And they know you, they know the community, they know the local workforce. So it's like online education, but from the community, that type of change in mindset, I think is a positive
00:35:17
Speaker
And I do see it in other areas. It's not just in Colorado, but yeah, I think there's a lot of opportunities to make positive longer-term changes even in that space. But I think it requires, as you say, a different kind of thinking and not a reactive kind of thinking in terms of how do we respond to Southern New Hampshire, but thinking, where are we? What are we about? And what are we good at? What does the community need?
00:35:47
Speaker
Yeah, and that kind of reactive response is kind of what I was thinking about a little bit in the UK because it feels like, you know, although I kind of talk positively about more universities making a move to online education, there's a sense in which everyone's in a similar boat and they're all basically, you know, veering into different pots of
00:36:09
Speaker
the market that they might not have been in otherwise and therefore this kind of, you know, that kind of reduces the kind of scope a little bit. So like I think to that point,
00:36:23
Speaker
it'd be really interesting to see, to Phil's point, those innovations and thinking beyond going down established roads that a provider might not have gone down before as a solution, but instead thinking about different ways. I mentioned that the reporter talked around
00:36:44
Speaker
online short courses as a potential avenue but I think they also mentioned around kind of enterprise and the corporate side of things so exploring kind of different avenues and different ways out and different ways of delivering education and offering education.
00:37:02
Speaker
I think could be a really interesting result of what's happening and it's often those kind of environments where you're really constrained where some of the best ideas come out. So I hope that not everyone puts their eggs in the basket of
00:37:20
Speaker
an area like transnational education or online education that they might not have been doing previously but considers a few different ways that have some viability that they can kind of go down.
00:37:34
Speaker
I think in so many cases, particularly around online education, part of what you've got to balance economies of scale. If you look at online education in particular, it's undeniable you have economies of scale. Too small of an online program is extremely difficult to run at break-even or make it self-sustaining. That's part of the reason schools like Southern New Hampshire
00:38:00
Speaker
Once you get to a certain size, you have a lot of economies of scales in digital marketing, buying AdWords, sharing students between programs, et cetera. So that sort of pushes you to larger. But what we're all talking about, certainly in the UK and the US, and in particular with two-year colleges, there's lower enrollments.
00:38:24
Speaker
at the same time, there's a need for online education because of working adults changing student environments. So how do you find that balance? And, you know, I mentioned the Colorado case, they're not changing the institutions, but they're pursuing a strategy, which is saying, by working together, we can achieve some greater economies of scale, but still be responsive to the students in our local area.
00:38:52
Speaker
other places, like I guess a question I would have, you keep hearing about college mergers, but too often to me, the mergers are all about saving administrative cost and, you know, just cost cutting and running a little bit more efficient and not really saying, hey, by doing this merger, can we have a better economy of scale that will enable
00:39:15
Speaker
online or hybrid programs in a way that they haven't done. But Morgan, are you seeing any positive examples of mergers that deal with that in an opportunity way as opposed to just cutting administrative costs?
00:39:30
Speaker
I'm tempted to say the Georgia State, Georgia Gwinnett College merger. I think there were some good things that came out of that. But I wonder if that's another opportunity for a discussion for us down the road, perhaps, because there have been mergers in the UK as well. Maybe we can actually delve into that a bit. I can't off the top of my head say what the positive was, but I think certainly speaking to some of the folks involved in Georgia, they went into it in a really
00:40:00
Speaker
positive sort of way about how can we come out of this better, all of us, and not just cheaper and more efficient.
00:40:09
Speaker
That's true. Well, at the same time, we talked about Wisconsin and the enrollments are down, particularly the two-year colleges. But Maine, the two-year colleges and News Report coming out today, although the data's been out there, but it's getting written about more, Maine's community college system is increasing enrollment. And not only are they crediting the free college as statewide initiative,
00:40:33
Speaker
around free community college for the growth in enrollment. I personally have been skeptical about the free community college movement because quite often it ignores the impact on the four-year schools. And Alex Usher wrote about, and I did another post on the same topic, you tend to get an initial bump in enrollment from free community college, but then longer term it goes down. So you haven't really structurally addressed a problem.
00:41:02
Speaker
But having said that, Maine is doing something as a state and they're seeing some positive results. So it's not just mergers, closures, straight going online. That's another, at least arrow, you know, that you can pull out and try is free community college.
00:41:22
Speaker
Yeah, and I can only point to very small, almost kind of minuscule examples of partnerships that have kind of offered a benefit, but nothing on the scale that you're talking about. But it is something that gets talked about a lot, but it never seems to come to fruition. And a lot of people, I guess they kind of attribute that to,
00:41:49
Speaker
you know, UK higher education becoming a bit more marketised and competitive and therefore reducing the chances of providers working together. But, you know, to the point I made earlier, if any situation is going to compel the bringing of universities together, then it's probably now. So, you know, that's one to watch as the kind of year goes on for sure.
00:42:16
Speaker
And I keep going back to something that you said at the beginning Neil in my head I keep going back to it you you quoted the Daily Telegraph of say is saying that perhaps the higher ed sector collapsing would be the best thing and and to sort of paraphrase Winston Churchill you know like
00:42:34
Speaker
higher ed sector is the worst possible arrangement that you could have for society, except for all the others, you know, when it comes to education, you know, it's got its issues, but it's also highly effective, as well, just given given the scale of what they're trying to do. So I think, you know, trying to find these solutions is a useful thing. And it's something we must do, because we all actually care about the space. That's why we're there.
00:43:00
Speaker
One thing I would add to it is sort of the technology and the vendor side is I've talked to a lot of vendors lately and one of the key points I've been emphasizing and it's sort of interesting the point of view from the vendors
00:43:15
Speaker
is these issues that we're talking about, the finances, the enrollment, the underlying cost increases due to inflation that are not fully understood, how much they're impacting schools. And we've talked about here about online education, but I think it has a broader impact. It's driving general ed tech usage, like what colleges and universities are willing to spend on data
00:43:41
Speaker
So for example, data and analytics can't just rely on a magic black box algorithm like a Civitas type of approach. They need to have a much more pragmatic. This is serious stuff. We're dealing with existential issues. I got to buy something that I understand and can make it work and get some benefit in the short term.
00:44:01
Speaker
And so these macro higher ed issues are driving not just online education, but they're driving while we talked about LMS and VLE space early on. I think it's driving
00:44:14
Speaker
the when schools make a change and what the purpose is. I think it's driving whether or not how deep to get into data and analytics as a strategy. But it's crucial, I think, to understand these broader issues because it's changing a lot of the tech landscape well beyond online education. Yeah, I mean, the tech landscape, maybe not exclusively, tech is
00:44:40
Speaker
you know is also kind of part of the thing that universities need to invest in here as well for sure so you know that's a tension around the kind of finance side of things and I guess how much that is conceived as being really important to competitiveness is interesting you know chatting to a provider who
00:45:05
Speaker
has a really interesting system that can be used alongside their kind of OPM offering that kind of just streamlines a whole bunch of things and sort of circumvents some of the university ways of doing things that enables them to kind of stand up programs more quickly and offer a kind of more modern streamlined kind of experience for customers. And so I think
00:45:29
Speaker
You know, it'd be interesting to see how much, you know, what's going on at the moment does drive investment in systems, even in a kind of difficult time and how much it might influence kind of the changes that are made. But I kind of definitely see a bit more of that side of things. And I think that's part of the evolution of what's happening. Well, great.
00:45:54
Speaker
Well, hopefully, I mean, we were talking about this year. There's a lot of challenges. I mean, this is shaping up the more that I look at things. It could be as dramatic as 2023 in terms of the threats, the changes facing higher education in many countries.
00:46:11
Speaker
We're all trying to find the positive, but we need to be very hard-headed as far as understanding this is what's happening and here's the next steps to deal with it. I think this has been a great discussion looking at specific university finances and what they do about it.
00:46:28
Speaker
Looks like, why don't we set up the discussion that you had mentioned about, let's look at the virtual collaboration platforms moving forward, the classes, the engage leads, the usage of Zoom. I think that'd be interesting to explore that, or in a tech version, but it's affecting so many schools. So we will deal with that on the next episode, unless some huge news story comes out between now and then. But thanks a lot, and we look forward to interacting with you guys again in the future.