The State of EdTech: OPMs, 2U Bankruptcy, and Implications for Higher Ed:

Changing Higher Education podcast 219 with host Dr. Drumm McNaughton and guests Phil Hill

Transcript: Changing Higher Ed Podcast 219

2U Bankruptcy: The State of EdTech with Phil Hill

Introduction and Guest Welcome

Drumm McNaughton: Thank you, David. Today we welcome back Phil Hill, publisher of the On EdTech newsletter at Phil Hill Associates and resident EdTech expert. Phil’s a lifelong learner who transitioned to the educational technology consulting after working in the engineering field for many years. Phil’s a go to expert in EdTech and has the ability to spot trends in the EdTech market, and he’s not afraid to ruffle a few feathers in the process.

He’s worked with a who’s who of online education institutions and with EdTech in the news more and more, Phil joins us today to talk about the state of EdTech, where it’s going, and what university presidents need to know to take advantage of current market forces. And oh, by the way, he’s going to talk a little bit about the recent bankruptcy declared by 2U and how that might affect institutions. Phil, welcome back to the show.

Phil Hill: Hey, I’m looking forward to it again.

Drumm McNaughton: Yeah, me too. We’ve always had such great conversations and, to be a little, uh, sarcastic, there’s really nothing going on in ed tech at this point. Is there?

Phil Hill: Yeah, the boring area around technology. Not much to cover, exactly.

Drumm McNaughton: Exactly. And the big news being 2U going out, I’m sorry, 2U. Okay.

Phil Hill: said you would do that.

Drumm McNaughton: I did say I would do that. U2 is fine for anybody who likes that kind of music, they’re doing just fine. But 2U’s having challenges.

Phil Hill’s Background and Expertise

Drumm McNaughton: Before we get into the world of ed tech and what’s going on, please give us a little bit of your background so our listeners understand who you are and the great expertise that you’ve got in this area.

Phil Hill: Sure, I have sort of a career of falling into things, so I’ve been working in edtech for about 24 years so far, and it all came from a failed hostile takeover of a company during a com era, where I discovered that if you fail in a hostile takeover, you don’t keep your job. So I fell into consulting.

Then once I was doing that, I didn’t want to do big company consulting. So I looked at my customer base and I got the best feedback from higher education saying, that what I did was really needed and I had a unique approach. So I fell into ed tech consulting, mostly with higher ed. And initially I was really thinking of it quite honestly as paying the bills while I went and did another software company and then decided that I actually liked doing this consulting. So I got established helping schools, who were trying to do strategic initiatives where technology was the trigger for change. That’s essentially what I’ve done. Most people, however, know me from the blog and the newsletter and my market analyst role. So I’ve been writing about what’s happening in ed tech, how it’s going to impact colleges and universities. But also how it’s going to impact the broader investment community, ed tech community. And I’ve, sort of, fallen into a role, quite honestly, of being a marriage counselor, where one group is looking to me to help explain what’s going on with the other group and how can we work better together.

Drumm McNaughton: This is applied to ed tech and not personal stuff, right?

Phil Hill: Yeah. Oh yeah. Much more successful on the ed tech side, but like colleges and universities who want, they typically don’t understand the investment environment and ed tech and how that drives how companies behave. So a lot of times colleges and universities want to have a better understanding. Wait, what’s going on?

Like you mentioned 2U. What’s going on with the bankruptcy? Should I care about this? Does that pretend other changes in the market? So it’s sort of following in that role of helping one side understand the other. The end goal being to improve teaching and learning through some technology enabled change. That’s sort of the general field. that I work in.

The Evolution of EdTech and the Government’s Role

Drumm McNaughton: Well, that’s kind of interesting because you said you’ve been doing it for 25 years now. And I remember 25 years ago, it was two tin cans on the end of a string when it came to technology.

Phil Hill: Well, we had the internet and we had the early learning

Drumm McNaughton: wait, that’s right. Al Gore invented that.

Phil Hill: Oh, that’s right. Yes. Yes, exactly. But yeah, it was actually, it was an interesting period of change really during the dot com era. You had a lot of the overhype of it was going to change everything. Ain’t going to change it by next spring kind of mentality.

But really what we know in higher education is these changes take a long time and it takes a concerted effort, not just plugging in a technology tool, but making an organizational change to think of a new pedagogy, a new teaching technique, a new way to reach students you haven’t done before.

So you’re right. It was the early days of online really being a key thing, but, and, quite honestly, a lot of the same issues arose back then. You know what the biggest difference is the role of government during the early internet days, viewed it as, we make fun of the Al Gore claims. But that actually exemplifies it. Government actually supported innovation and let’s see what it can do for societal issues. And I think that was very common back then. And then you had to jump in and regulate where there were abuses. Today, you have a very different mentality. It’s like technology and vendors, in particular, are viewed with skepticism from day one and it’s almost like “prove to me that you’re not evil”.

So a lot of the technology issues and the higher education change issues are the same. I’d say one of the biggest issues is the role of government within there, and it’s gone from a promoter of innovation to a very much a skeptical view and we have to rein things in. That’s one big change I’ve noticed over this time period.

Regulatory Activism in EdTech

Drumm McNaughton: Well, that, that’s a great segue, and I thank you for that, into the first area that we were going to talk about is updating EdTech and regulatory activism has really broadened. What are some of the things you’re seeing with that?

Phil Hill: Well, last year when we talked, I think our focus was very much on the online program management, the OPM market, and that there was activity at the time, the third party servicer expansion guidance, a review of the bundled services, exception that underlies tuition revenue sharing business models, and there were several other activities. So you and I had a very good conversation a year ago, but it was mostly on OPMs. What’s going on with OPMs? How are the regulations impacted? What should happen?

I’d say the biggest change in the past year is it’s become much more apparent that the Department of Education, with its regulatory activism, and very much in concert with a bunch of think tanks and foundations that are allies of the Department of Ed, they’re very much behind these activities, their target is really online education. It’s not just OPMs. The concept is online education is ripe for abuse. We saw it, () I’m putting words in their mouth.) we saw the abuse, particularly 15 years ago, with the growth of online for-profit universities, and we need to reign them in. And then their view tends to be OPM market, well, what that is, that’s not a view of, “Oh, it’s nonprofit universities doing online”. Their view is it’s almost like a cancer that’s metastasized and it’s now changed its form into OPMs, or it’s changed its form into some other thing.

So their regulations over the past year have very much been targeted at online education in general, not just on OPMs.

Drumm McNaughton: Give me some specifics on that.

Phil Hill: Well, there was a series of negotiated rulemaking in January through March. And if you look at the main topics they had in there, they had other things too, such as a lot of questions about the inclusive access textbook model and the way to price textbooks, but the big focus was on online education, it was distance education. So they have regulations about, we want to take. If you’re doing online programs, we want you to create a separate virtual campus for the iPads database so that we can see how your online programs are going and we can check if they’re, not working out. But they did things such as, “we’re going to require all, not just online programs, all online courses to take attendance and report that as part of a return to Title IV”, a way to determine what was the last date of attendance for a student who withdraws.

But they’re putting all this emphasis on things such as attendance. They’re disallowing asynchronous coursework in clock hour programs. Think, more of the gainful employment type of programs. And if you look at it, it’s just more and more they’re putting very tight guardrails around online education. Making the job of doing online education more and more difficult. The worst one, in its impact in my opinion, is they’re looking, they’ve proposed to essentially gut the state authorization reciprocity agreement and what that does think of it as like a driver’s license for online education. So my school’s located in New Mexico and I have students who come from Nebraska. I have to be authorized by Nebraska to serve those students.

Well, the reciprocity agreement acts like a driver’s license. If you drive to Nebraska, you don’t have to get a different driver’s license, they accept the New Mexico. The reciprocity agreement does that for online education, here’s a minimum set of standards and you’re authorized. That makes it much easier for the smaller colleges and universities, or the smaller online programs, to operate and not have to hire an army of compliance officers. The Department of Ed is proposing to gut that agreement, which will put a huge bureaucratic burden on any college and university offering online programs. They have their reasons, but that’s another specific example of how they’re trying to crack down on online education.

Drumm McNaughton: Well, my understanding with the NCSARA pushing for changes is because the attorneys general of the states wanted more. You’re looking at the compliance triad. You know, the attorneys generals wanted more say in the standards

Phil Hill: Well, remember, we’re talking regulatory activism. So I agree that is where the push is coming from. But keep in mind, 49 of the 50 states voluntarily agreed to join SARA, if you will. It was only California that didn’t. Now that it’s signed, yes, there are state attorneys general who are the leading one saying, “Hey, this strips away my authority to go after schools”, that kind of thing.

But I will note it’s sort of after the fact. It’s like, but your state agreed to this, so you’re sort of going against what your own state agreed to. And in my opinion, a lot of this is intended to undermine SARA as opposed to a grassroots attorney’s general on their own finding a couple issues. There’s a coordinated campaign using them to go

Drumm McNaughton: Oh most definitely and without getting into the politics of the situation, I suspect we can figure out where this is coming from.

Phil Hill: Yes. Yep. As a matter of fact, you’re, we’re talking about Mike Goldstein earlier. That was the session I did with him at ASU GSV, was looking at the regulatory actions on the reciprocity agreement was with that. Mike was a great host of that panel.

Drumm McNaughton: Yeah, Mike’s great people. The big challenge with this is, “Yeah, if they do away with SARA agreements, the NC, and I can’t remember what the NC stands for, but SARA is the State Authorization Reciprocity Act.

Phil Hill: It’s a reciprocity agreement is SARA. NC-SARA is the organization that administers SARA.

Drumm McNaughton: And you’ve got various entities who work with states within their thing, like in, in my area here, in New Mexico, we work through WICHE. Yeah.

Phil Hill: Yeah. So the net effect of all this thing is it’s just becoming more and more difficult to do online education, particularly if you’re a smaller program, than it was before. And the net effect is ironic. It’s going to be the rich getting richer. The bigger programs, they already know how to comply with 50 states authorization. They already have armies of compliance officers. It’s the smaller one, it’s a school that’s saying, “I want to do a couple of online programs for a specific reason”. It’s reaching different set of students, expanding their brand, whatever the case may be. Those are the schools that these regulations are going to impact. And I, I don’t believe that’s the intent of the Department of Ed, of making the rich get richer and smaller programs having a tougher time, but that’s what’s happening in reality.

Drumm McNaughton: The challenge that I’ve seen, depending on what the administration is, whether it’s Republican or Democrat, is the Republicans, it tends to be a wild west that almost anything goes. And then the Democrats feel like they’ve got to rein it in and that pendulum swings from one side to the other and it drives people crazy.

I think TITLE IX is a great example of that. Under the Obama, you had the “dear colleague” letter, which, set out things fairly clearly, and it was a major difference. Under the, DeVos and Trump administration, it was like, “Nope. We’re not going to do this. It’s going to be just like a trial to where you get to confront your accuser, etc.” And then, in the latest, Title IX, it’s swung back even further to include LBGTQ+.

Phil Hill: Yeah, and now you have courts pushing back saying you can’t enforce it. You’re right, that pendulum makes it very difficult for colleges and universities to figure out new ways to operate. They are going through wild swings. I will note, however, something’s different with the potential future Republican administration and that they are much more on board with the holding colleges accountable and using measures of “what’s the return on investment” of this program. Are students, getting into jobs that can pay off their debt. They actually, if you look at the rhetoric, it’s very similar to the democratic thing. The details of how they would do it change, but they’re very much aligned on this. So I do think there’s a fundamental difference that both sides of the political divide are pushing the financial value of academic programs and we need to measure it to hold schools accountable. Now, given the environment we’re in, once you find out, “oh, you guys actually agree with each other”, that probably will cause them to reverse course. “Well, I don’t want to agree with them.” But there is some overlap in this point, which is I think different than the 2010s. I don’t know what’s going to come of it, but there’s a difference.

Drumm McNaughton: Well, the other thing too is, as we were talking yesterday, there’s a new NegReg that’s coming out for TPS expansion.

Phil Hill: Yes.

Drumm McNaughton: We’ll see. I personally, I don’t think that NC-SARA and the SARA agreement is going to go away. I think there will be too much political fallout if this happens. It’s still the rule hasn’t been put out there for comment yet. So, I think this close to the election, it’s not going to happen.

Phil Hill: Yeah, and I think they said they were going to put it out in November, and if you think about the timing, it’s like, “really?” That doesn’t sound realistic to me. I think the clock has run out on TPS. Well, TPS expansion, I believe, will start in August or September. Now, there’s a real question of even if you go through the whole NegReg could that possibly be implemented but we’ll be talking about it this fall.

The NC-SARA stuff. That’s the one where I’m like, I don’t even believe what you guys are saying. There’s no way you’re going to put that out at the time of the election. I’m like you i’m doubtful that they actually put it out. But we’ve seen some unprecedented moves by this administration. But right now, I agree with you that I don’t see them pushing that in the November timeframe.

TPS expansion, I do see them pushing, but I don’t see it succeeding.

Drumm McNaughton: Oh, it, and there’s no way that if they do a NegReg, you can’t even do a NegReg at the beginning of the year and get things published in the federal register by November 1st, which is the key date, as we all know. So that doesn’t go into effect, six months, eight months later.

Phil Hill: Yeah. So there’ll be a lot of activity. There’s a new element, since when we talked a year ago, is some of these things like there’s going to be activity, but come on, is it realistic going to lead to anything? I think that’s also a new element we’re facing.

2U Bankruptcy and Its Implications

Drumm McNaughton: So let’s swap horses here.

2U?.

Phil Hill: Yes.

Drumm McNaughton: That was major, major news. They’re the ones who essentially invented the OPM market.

Phil Hill: I don’t know that I would say invented. They became the face of it. So there were Imbanet, Compass, BISC, there were companies doing OPM models before them, but it was much more niche. 2U came along and they gave permission for elite schools to have online education strategy. UNC’s MBA, Yale, Syracuse, they had a number of elite schools and higher ed is very much a let’s follow our peers or who we think are the class above us.

So once they did that, they became the face of the OPM market, and it helped transform it. Now, it’s at the same time as the bundled services exception, where it became clear you could do tuition revenue share, so they became the face. And you’re right, the fact that they declared bankruptcy is big news. Cause this was the leading OPM provider.

Now, keep in mind, they’re not going out of business and the form of bankruptcy, it’s already, pre packaged. They already have the agreements with the debt holders in place, and they’re expecting to come out of bankruptcy in just two months, roughly.

Drumm McNaughton: Which is nothing

Phil Hill: Yeah, exactly.

But the fact they’re having to do it, and the other part that’s not getting covered is the whole company is getting sold to the debt holders or the vast majority of it. That’s part of what’s happening. They’ve agreed to redo the debt, that was sort of the agreement we’re going to take over the company, and from that, we agreed to extend the debt maturity and to provide new terms and to cut the debt in half. So when they say the debt gets cut in half, the term loan holders, the JP Morgan’s of the world, they don’t want to own anything, so they’re still term loan holders. They just agreed to do a two year later debt maturity, the people selling bonds, so unsecured debt, they’re the ones who said, “okay, we will turn our debt into ownership. We’re taking over the majority of the company. So we own the equity. We’ll write off our debt. And by doing that, you now have half the debt that you used to have. So it’s much more realistic. You can succeed, and we’ll inject another 110 million dollars of working capital.”

Drumm McNaughton: That was huge.

Phil Hill: Not just in terms of getting through bankruptcy, but it’s like this was part of the agreement ahead of time. So the company is getting sold. It’ll no longer be publicly traded. Nearly 90 percent will be owned by the debt holders. So not, that’s not getting covered very much. So it is big, even if they get out of it within two months, and it also is bigger than just 2U. It’s big for how it impacts the OPM market and how people perceive it.

I would point out we’re talking regulations up front. The thing that put 2U over the edge, however, was debt. They took on over 900 million dollars of debt, primarily to acquire Trilogy, the boot camp company, and to acquire edX, the MOOC company. Those two acquisitions is the majority of why they had over 900 million dollars of debt. And then the interest rates went up, so the cost of refinancing debt became untenable.

It’s actually not regulations or business operations that force them into bankruptcy, it was purely debt management, which is interesting, but that is affecting the whole edtech market. The finances of investment, interest rates, debt becoming toxic, that’s affecting all of edtech as well.

Drumm McNaughton: Before we get into that part, because that is critical for higher ed, normally what you see when someone goes into chapter 11 or bankruptcy is they do a reorganization of the company. We’re not seeing that are we?

Phil Hill: No, no, there’s no sign of that happening. And I’ve even said, I’m surprised that there’s not even a reorg like sell off the bootcamp division. The bootcamp division has not been performing well, and there’s a lot of reputational risk behind it because it truly is arbitrage for universities. All they’re doing is slapping their brand on it and making 10, 20 percent on the top.

So to be quite honest, there is a legitimate question of should schools be doing that? So if I were in charge, I would have done some reorganization as part of this, but at least what I’ve seen publicly and in interviews, there’s no reorganization involved here. Other than who owns the company?

Drumm McNaughton: That brings up a very interesting point because your ownership is changing which means your board structure is going to change and if you’ve got the debt holders owning the company, at this point, and I would assume it’s going to be some very big names, are they really going to be looking to build the company or make sure that their debt is not affected or a combination thereof. What’s going to be the purpose of the company going forward?

Phil Hill: Well, I chuckle when I get press releases, including from 2U talking about our investors, debt holders in this case, they really believe in our long term vision. And the cynical side of me says that’s not the way debt holders work. Debt holders believe in getting paid back. That’s what they believe in. So they’re making all the motions that they truly want to make a strategic change, and I have to admit they’re pumping 110 million of new working capital into the company. So it doesn’t seem like it’s a strip out and let’s get our payment and we don’t care what happens on the end. There is some legitimate basis to say the new ownership cares about them growing out of this problem. I’m just a little bit naturally cynical based on the motivation of debt holders. And nothing against them, that’s the role they serve. We give you debt. We want to be paid back. And the fact they’re getting transformed into equity holders and how do you grow and be strategic? I’m just, I’ll be watching that. How’s that?

Drumm McNaughton: And in the next two years, when this extension of the current debt. Is pushed out to it will be very interesting to see how people react, how companies react with this debt coming due again.

Phil Hill: Yes, yeah, you got an extra two year runway, and it’s not just that. They have half the debt load they used to. Now, are they going to be able to operate out of the current debt load within the next two, two and a half years? Yeah, that’s what we have to watch, and will it legitimately be run as a company that needs to grow again? Those are the two big things I’ll be watching.

Drumm McNaughton: So their debt’s going to come out of, instead of being, what, $900 million or a billion, it’s going to come out somewhere around $400 million.

Phil Hill: $459 million, yes.

Drumm McNaughton: It’s still a serious chunk of change. I could do that in my bank account, no problem.

Phil Hill: Yeah, I’ll look at my couch, see if I have that sitting around for you.

Drumm McNaughton: So the big question that I have is, what’s the impact going to be on higher education, and specifically on those institutions who are using 2U’s curriculum for their programs?

Phil Hill: For existing customers, you have additional risk to manage, which includes reputational risk. So I think the role of risk management at universities has been heightened. If we’re kicking the can down the road two years, two and a half years, what do we need to do so that we’re not caught off guard two years from now, if they don’t get out of the debt situation then.

So it’s really going to increase the need for schools to manage risk and not just say, “Hey, whatever, we trust them”.

Operationally, I would also say you better carefully monitor metrics of, “Is the company performing”? They’re going to have to do additional cuts for costs. Are they still providing the service that they did when you signed up with them. So basically for schools, I would heighten risk management and I would heighten, sort of, metric space management of the contract. Not to hold them at arm’s length, like I don’t trust them, but it’s like the proof of the pudding is in the metrics. Am I really getting the enrollments that I’m relying on? Am I getting the academic outcomes I’m relying on? So I would say that’s the biggest impact for current 2U customers. Now, keep in mind, once that bankruptcy went out, even though it’s remarkably short, two months and very well managed, given their situation, I am quite sure that all of their customers got phone calls from their competitors over the past week or so.

So, people are gonna try to make pretty strong arguments against them, and so be prepared for all those phone calls as well.

Drumm McNaughton: Yeah. Another thing though, is bringing in the regulatory aspects of this all and the heightened focus on student learning outcomes for online education. This could also be a risk to institutions if you’re not getting the student learning outcomes that you need to have with these online programs. Your creditor is going to be starting to raise their eyebrows quite a bit.

Phil Hill: Yeah, I think that will have an impact, and that goes outside of the OPM market. That’s for any online programs. Unfortunately, there’s more focus on online. Like, that’s what we don’t trust, whereas it should be broadly applied. Face to face or online, let’s look at academic outcomes. But the reality is, online programs are looked at with an even more skeptical eye. And yeah, that adds a risk.

I will say, ironically or not, 2U historically has had very good academic outcomes for the programs they serve. So, there’s a little bit of a difference of reality of perception, and perception is important. So yeah, there’s risk management there from the regulatory side.

Here’s the irony, though. For all this talk about regulatory activity against OPMs, here we are early August 2024, actually, nothing’s changed. The TPS got put in, then pulled out and bundled services, exception, which underlines rev share, it’s been talked about forever but no activity on it. So there’s a lot of political activity and scaring people away from it, but direct regulation, it actually hasn’t changed as of August 2nd, 2024. Which I find a little bit ironic, given all the activity and threats that have been made over the past few years.

Drumm McNaughton: So just quickly because we’re getting down to the end of our time which I just looked at the clock and go. Oh my gosh. I can’t believe we’ve already gone through this much.

Impact of Cybersecurity on Higher Education

Drumm McNaughton: High tech investment, right now, is looking at generative AI but little else. And we’re seeing more and more ransomware out there, not affecting higher ed, but it has in the past and will it continue to be? Some of the endowments out there are in the hundreds of billions of dollars.

Phil Hill: No, it’s a very real issue for higher education. Actually, education is one of the most attacked areas for cybersecurity incidents. And one thing I’ve seen is it’s really made schools move away from a lot of what they did before it was best to breed here. We’re going to use this open source authentication system with this, and we’re going to patch it together with our internal university staff.

And I think the lot of what’s happened is a move towards, no, we need to pay a bigger vendor that does a comprehensive cybersecurity package. And part of it’s, they can handle it, they can keep up to date with the latest threats. But part of it, quite honestly, is the one throat to choke. A university president saying, “if we have an incident, I need to know who to go after and who’s going to carry enormous insurance to cover losses”.

So it’s really moving colleges and universities away from a do it yourself, patch it together type of mentality. And I don’t see any let up in this area because I think the threats are increasing. And as you said, once you’re talking endowments, now you’re talking real money, and you’ve got the attention of boards and presidents. And it’s put a pretty big shift on how you actually operate in this area.

Risk Management in Higher Education

Drumm McNaughton: And as you said, the risk management, whether it’s applied to O. P. M. s, whether it’s applied to cyber ransomware, et cetera, risk management, if you’re not doing this as a college and university, your boards are not meeting their fiduciary duties.

Phil Hill: Absolutely. I’ll give you a negative example, and you can decide you and your editor can decide whether to keep this in. Look at the University of Arizona Global Campus, the UAGC, where they acquired Ashford University. You know what that really comes down to is a lack of risk management. When they’re doing this, there was a lot of political and financial evaluation, but they refused to do risk evaluation saying, what if we’re wrong?

What if we, the California Attorney General does win in the lawsuit and then does a borrower defense claim through the Department of Ed against this? What happens if Department of Ed says we’re not going to allow you to be accredited as a separate organization, you have to merge. All of these steps that are happening were because the group refused to do risk evaluation throughout the process. Unfortunately, I think it continues.

So it’s yet another example. My colleague, Linda Morgan, she wrote a great post called “Casino Capitalism”, and the idea was when you get into a financial capitalist type of decisions, but you’re treating it like you’re at the casino, just throw everything on red, or whatever, as opposed to evaluating the decisions. “What could go wrong? “How do we manage it? That is causing a lot of the problems that we see right now in higher education. “Casino Capitalism“, and it’s another way of saying, “You have to do risk management” and far too often these big initiatives are done without that happening.

Drumm McNaughton: Well, it should be part of every strategic plan you do is, these are strategies, these the risk associated, this is how we’re going to mitigate, and this is what we’re going to do if in fact, this risk comes to fruition. These are things that my firm does regularly whenever we work with institutions.

Key Takeaways for University Presidents and Boards

Drumm McNaughton: Phil, as always, just an incredible conversation. I so appreciate your taking the time.

Three takeaways for university presidents and boards.

Phil Hill: Well one we just discussed risk management, risk management, risk management. You’ve got to do it and don’t assume that people that bring up these questions are just trying to shoot down an initiative. Quite often they’re asking good questions that will help you structure a new initiative the right way. So number one is you’ve got to do risk management appropriately and don’t get defensive about it. Actually do it as a way of, “we’re going to protect ourselves”.

The other thing I would say is to keep in mind, even though, like you had mentioned, Gen AI is the only area in tech that’s getting any real investment around here, you could say there’s a dearth of technology innovation outside of that. That doesn’t have to be a bad thing. Now is the time to take technologies that we know what works and what doesn’t work and for the innovation to be focused on “Let’s actually put that across our school and improve access to a broader set of students”. Web accessibility for disability, there are a lot of tools out there. Now is the time to come up with programs and really make it much more effective and serve students that you couldn’t serve before. So there is opportunity AI, but it’s going to be much more on, not “gee whiz new technology”, but things that we already do, but let’s innovate and how we apply them across there.

And I guess the last one is, despite the pain that the Department of Ed and its allies are giving on online and hybrid education, that remains one of the most important ways to change your access to students and broadening who you reach and shoring up your finances. So the job’s getting tougher, but you need to do it anyway.

And I guess since we’re talking to action items. Go lobby. Now is the time, during the negotiated rulemaking and the public comment periods, to tell them what’s going to be the impact on your school based on some of the new regulations that are making things more difficult. So that would be my takeaway action items. Get involved, lobby for your own good purposes.

Drumm McNaughton: Absolutely. I couldn’t echo those more. Thank you. What’s next for you? What’s been going on and what it’s happening.

Phil Hill: Well, somebody asked me recently when we’re going to take a break from the newsletter, and I said, “Well, as soon as somebody will stop having new news items every single week, then we’ll take a break”. So what’s next for us is keep doing the same thing, but do them better. We need to take a break, revise things, take the lessons learned of the newsletter over the past 15 months.

We just introduced our premium subscription just 14 months ago. We need to apply and say, “okay, how can we make this even better”? Currently we charge $ 10 a month for individual or a hundred a year to get additional premium content. And so we need to sit back and say, here’s what we’ve learned over the past 14 months, let’s improve it.

So the short answer is do the same things we’re doing, but learn how to do them better.

Drumm McNaughton: And take a vacation.

Phil Hill: Yes, that too. I definitely need to do that. I am going to Massachusetts in October where we used to live and taking a short vacation, but I need a good two week vacation sometime soon.

Drumm McNaughton: It reminds me, my sister’s birthday, and she lives up in Salisbury. My sister’s birthday is tomorrow, so I need to call her and wish her a happy birthday. So thank you for that, for queuing that up for

Phil Hill: And we’re going to be in Newburyport, right across the river from Salisbury.

Drumm McNaughton: Yes. And we used to have a summer house up in Amesbury on Lake Aditash.

Phil Hill: Yes. Okay, so that’s where I’m going to be in October.

Drumm McNaughton: Very good. Well, do enjoy. I’m sure we’ll talk before then, but, thanks again for being on the show. It’s always a pleasure.

Phil Hill: Yeah, always a pleasure for me as well. Thanks a lot.

Closing Remarks and Upcoming Guests

Drumm McNaughton: Thanks for listening today. And a special thank you to Phil Hill for his sharing with us, his thoughts on ed tech, where it’s going, what current presidents can do and should be thinking about, especially when it comes to the recent bankruptcy declaration by 2U.

Join me next time when I welcome David Marchick and Angela Virtu from the Kogod School of Business from American University to the program.

What makes these two individuals special is what they’ve done. They’re part of a team that’s incorporated AI into 20 plus courses in all the majors at the Kogod School, and they’ve done this in six short months. David and Angela will be joining me next time to tell me about what they’ve done and more importantly, how they did it.

Thanks again for listening. See you next time.