The Rant Podcast
A bi-weekly podcast focused on pulling back the curtain on the American higher education system and breaking down the people, the policies and the politics. The podcast host, Eloy Ortiz Oakley, is a known innovator and leader in higher education. The podcast will not pull any punches as it delves into tough questions about the culture, politics and policies of our higher education system.
The Rant Podcast
Earnings Premium Under The Microscope with Phil Hill
A single number now threatens to define whether a program survives: does it deliver an earnings premium over a high school diploma? We sit down with Phil Hill to unpack how federal accountability just shifted from dashboards to consequences, why the current metric is misaligned with how real labor markets work, and what leaders must fix before 2026.
We break down the design choices that matter—statewide medians versus sub‑state regions, demographic blind spots, and the absence of program cost and debt from the core test. Phil points to stronger models in state systems and long‑running research from Georgetown CEW, then lays out practical steps for negotiated rulemaking that would keep accountability sharp while avoiding collateral damage to open‑access colleges and regionally constrained programs.
The conversation turns to graduate loan caps and the end of easy cross‑subsidies. Expect new pricing discipline, tougher portfolio management, and experiments in financing that need safeguards to avoid a repeat of the 2000s. We also map the OPM shakeout: why some giants stumbled, how mid‑market firms are adapting, and where state‑level transparency rules are reshaping contracts. With generative AI accelerating change in curriculum, support, and marketing, universities need partners—and policies—that keep pace without losing sight of honest outcomes.
If you care about ROI, mobility, transparency, and the future of online learning, this is your field guide to the next era of higher ed policy. Listen, share with a colleague who owns program strategy, and leave a review telling us which metric you’d add—or drop.
https://onedtech.philhillaa.com/
eloy@4leggedmedia.com
Hi, this is Zeloyer Tease Oakley, and welcome back to the Ramp Podcast. The podcast where we pull back the curtain and break down the people, the policies, and the politics of our higher education system. This episode, I welcome back Phil Hill. This will be Phil's third appearance here on the Ramp Podcast, and it's great to have him back. Phil is a higher education consultant, and Phil is also the editor on the Phil on EdTech newsletter, which is widely read in the higher education marketplace, and Phil does an excellent job of digging into the education technology marketplace, and most recently digging into federal accountability policy. And that's what will be the topic of today's episode. I sit down with Phil and we talk about federal policy, particularly federal policy that has come out of the OB3 piece of legislation, otherwise known as the one big beautiful bill act. I sit down with Phil to get his thoughts about the new federal accountability framework, particularly as it relates to an earnings premium. There's a lot of conversation these days about measuring return on investment, economic mobility, ensuring that learners earn more than they would have by not entering this program of study. And the federal policy framework, the new accountability framework, takes into consideration earnings for programs of study. And for those programs of study that don't, over about a five-year period, have earnings premiums that are above and beyond what you would have otherwise earned right out of high school, then those programs are susceptible to losing the ability to get federally subsidized loans. So Phil will join me to talk about his work, his concerns about the new federal framework, and some thoughts that he has on how to improve it. And this is an important conversation given that the Department of Education is coming up on starting the negotiated rulemaking for the regulations that will need to be put in place for this new accountability framework. So now is a perfect time to have this conversation. I hope all of our listeners join in this conversation because it's going to affect every type of higher education institution in America. From community colleges to for your regional universities to private liberal arts colleges to the most selective or rejective colleges and universities in the country. Every program of study is going to be held accountable. And quite frankly, it's about time. And while it's about time that we have an accountability framework, there are still a lot of issues to be worked out, particularly in terms of what kind of data we're going to draw from and what is the best way to measure an earnings premium. So Phil will join me to talk about that, give his perspective, give his thoughts, and we'll rant a little bit about what's going on in higher education today. We'll also get into the new cap on federal student loans for graduate programs, and we'll talk a little bit about the OPM marketplace. So with that backdrop, please join me in welcoming back for the third time on the Rant Podcast, Phil Hill. Phil, welcome back to the Rant Podcast.
SPEAKER_00:Thank you. I'm really looking forward to it. By the way, I have to check how many other three-time guests have you had before? I'm checking for bragging rights.
SPEAKER_02:Well, you know, I I believe, I believe I've only had one other three-time guest. It might be Michael, Michael Crow. So you you are definitely up there in the rarefied air, Phil. Well, tell Michael I'm coming for him next year. Well, as hard as he is the schedule, I have a feeling you'll catch up to him. Yes. Well, thanks for coming back, and it's always fun to chat with you, Phil. And I just want to begin with I appreciate you always digging into issues surrounding the higher education marketplace and particularly some of the most recent issues regarding the higher education accountability framework that recently got signed into law. But before we get started, uh, how are you doing? What's what's keeping you up at night these days?
SPEAKER_00:Well, it's the same answer. It's the accountability framework, it's the schools, colleges, and universities starting to wake up to the implications here. And it's, you know, with the negotiated rulemaking in just a couple weeks, it's sort of interesting that I'm there's a lot of interest now. You know, there's a piece of me saying, uh, you should have been interested a while ago, but that is keeping me up. I also I had written about the accessibility, but yeah, those those issues are sort of looming. And so the general thing that I think about a lot is are the call are colleges and universities really ready for what's going to be hitting them in 2026? The and the general answer is no. So then the follow-up is, you know, are they going to? What progress are they going to make? So yeah, those are the big topics right now.
SPEAKER_02:Yes, it's definitely a big topic. And, you know, uh just hearing you talk about uh and ask the question, are they ready? It's just amazing to me, having been in this conversation for so long. In one of your recent posts, you you referenced the post-secondary value commission work and some of the other work that's been going on for a long time. And this conversation about economic mobility, about adding another metric to what we would consider success, the post-secondary level, has been going on for quite some time. I mean, my my hair was a lot darker when I served on the post-secondary value commission, and and this conversation was So I should thank you for this report that came out. Yeah. I mean, even back then there was conversations about increasing the value, being concerned about the erosion and confidence in the value of a degree. And this was, geez, at least 10 years ago. I lose track of time these days, but it feels like a million years ago that that conversation was getting started. I also reflect and think about how it felt when in the early or mid-2000s, well, not mid-2000s, I'd say you know, 2006, 7, 8, when conversations around completion were creeping into the conversation and and how much backlash there was to even contemplate completion as a metric of success, particularly at the community college level, where there was always this notion that we serve too many missions, we can't we can't be held accountable to one specific metric of completion. So I I give that backdrop only to say that I'm always skeptical when I hear higher education leaders push back on a new metric of accountability. But at the same time, I'll begin by saying I agree with you that there are challenges in the current data and the way the metric is devised. But before I get into all my thoughts, let's start with you. Tell us about your concerns about the federal accountability framework, specifically the economic metric, the metric that measures earnings, and what you think some of the unintended consequences if it goes into regulation the way it reads today.
SPEAKER_00:Sure. And I'll start out with sort of the general concept. I'm in agreement that we've been talking about outcomes completions.
SPEAKER_02:Right.
SPEAKER_00:And now we've been talking about economic returns for graduates for a long time. The difference is now we're talking about accountability, as in programs potentially losing access to federal financial aid loans. And I think it's needed, to be quite honest. So I'm a supporter of the concept. Uh-huh. So having said that, most of my criticisms have been on the chosen metrics, the way that we're planning to implement them. And gainful employment and financial value transparency became regulation in 2023, the latest version of it. And the earnings premium was one of two metrics that get applied there. And that just simply says, what are the earnings of your graduates completers, since we're talking undergraduate certificates quite often, three years after they finish a program. And let's compare that to high school, no college people age 25 through 34 within one state. That same metric, the earnings premium, got implemented by law with uh OB3, uh, one big beautiful bill. And so now everybody's gonna have to live with it. The difference is it's four years versus three, some minor differences. So, what are my fundamental objection? Well, I guess I have two. One is that's only one metric. It doesn't even take into account debt, it doesn't take into account program cost. There's a lot of things having a single metric is one of my biggest complaints because that puts a huge burden on that one way of viewing things, and you're gonna have tons of unintended consequences. What I've written more about is the fact that the chosen metric and the way it aggregates data, it might seem sort of pedantic or data focused, but I think it's important because it's comparing your median earnings of a specific program, a group of 35, 40 students in this particular two-year period. What are their median earnings? But to get to the concept of did your college degree add value, you have to have a comparison group. Right. And the comparison group is aggregated across an entire state, and it's for ages 25 through 34, and it ignores all other demographics. So that's just a fundamentally misaligned metric in the way it's going. And two examples states, regions within a state have different income levels. So your state, California, used to be my state. You're always welcome in California, Phil. Sure. Well, for visiting. I don't want the taxes. But there's a plus or minus 20% difference depending on what part of California you're in compared to that median comparison group. So what that means is if you're in a rural, it's not always rural, but if you're in a low-income area of the state, which often means you're serving disadvantaged students, lower income students, those schools have an additional 20% burden, up to a 20% burden, just to pass the metric because they're in a naturally low-income area, but they're getting compared to the statewide median. So what's an unintended consequence? You're going to have a lot more programs in rural low-income areas failing simply because of where they are than people are expecting. And that's poor public policy. And a quick example, there are other demographic issues, such as female versus male composition, has whatever the reasons, that also has a plus or minus 20% difference. And you're ignoring that. So the example I use, let's say you're a woman in McCallan, Texas, and you see a program that my nominal income is a high school graduate, I'm going to make$20,000 somewhere. Let's just say that I take some program and I boost my earnings. That's what we're trying to go for. But because the comparison group includes Austin, Dallas, Houston, it's a statewide media. The program I'm taking, it might be doing me a lot of good, but it might fail simply because where I am and ignoring the demographics. So that's the fundamental argument, is it's a poorly designed metric that misses the biggest variations. And once we see what happens, I can already tell you it's going to be predominantly the open access public, you know, low-income areas that suffer the most. And I'm not trying to say, oh, they all should get a pass because they're low income, but smart public policy should take these things into account. So that's my fundamental argument here.
SPEAKER_02:I've certainly heard that that argument in other circles. Part of the problem is the data that the federal government has to do this calculation. I mean, I think that's that's another part of this is what data are they going to use? There's always this question these days about are we going to have federal data to draw from? Are we not? Is this is the college scorecard going to be there? Is it not? And there's always been this argument that virtually every data metric that the federal government has used is flawed because of the data that they're using, whether it's iPads data, whether it's college scorecard data. So, yes, I mean I would fundamentally agree that the data is not great. And so, like you, I'm I'm hopeful that this conversation can be had in negotiated rulemaking. I'm not going to hold my breath the way that rulemaking is.
SPEAKER_00:If you release this podcast by then, it might change the game. Right. Actually, if you don't mind me jumping in, there's a difference, fundamental difference, data available versus the chosen data for a metric. So, for example, on the geographic, you know, substate regions and the you know, capturing the income differences within a state, that data is available. It's actually available within the same data sets that the government's already accessing. So it's not the geographic area, it's simply a matter of they chose not to define it in a very sophisticated way. It's not a data availability. I go on the ACS data, all you have to do is click one thing and you also get the region. And the computing zone is the best one. So I don't want to go into too much detail on one issue, but I just want to point out there's a difference between I agree data is not per data is not perfect. However, data available and chosen data within the metric, there's a big gap. That's more what I'm interested in.
SPEAKER_02:I completely agree with that point. In my mind, it even goes one step further, which we're not at that step yet. And and my hope and a lot of work that's being done in DC right now with different organizations is to take that next step, which is to really bring this down to the state level and really get states to have robust data systems where they could do an even better job than the federal government could do. I know we're not there yet, and we're still quite a ways away, but my hope is that that's where we where we eventually get. Because when we did similar analysis in California, as you well know, we partnered with Michael Iskowitz from HEA Group. We've done a number of different reports. We did a California Mobility Index that measured mobility for the four-year institutions in California. We did a programs that pay report that focused on programs of study and the return on investment in those programs of study. We've done reports on return on investment for the two-year institutions. And that's where we really found the challenge. We could not duplicate the mobility index that we did for the four years because of the huge regional differences that community colleges exist in in California and every state for that matter. And the challenge you have with Pell uptake in community colleges. Many community colleges, and I disagree with this notion and I've argued against this notion for years, but most community colleges are not designed to maximize Pell uptake for their low-income learners. And therefore, it's hard to really measure the amount of low-income learners that you're serving, what their earnings are. So I do think that there is quite a number of issues that we still need to tackle, as you pointed out. And hopefully some of those will be ironed out in rulemaking, but I think ultimately these are going to have to be ironed out by systems and organizations, the ASCII's of the world, the ACCTs of the world, and states. Because I agree with another point you made that many, if not most, institutions were slow to wake up to what this was going to mean, which is why College Futures published the report early this year to just give a highlight to people what this was going to look like. And we had places like Compton College, which showed some pretty poor return on investment metrics compared to some of the other institutions in the LA County area. But if you take a look locally, one, the job market is not as great in that region. Two, the programs of study are not well aligned with the jobs that are available. So all those things will hopefully create a conversation that will lead to a better metric. But we'll see. Hopefully, like you said, somebody at Ed will listen to this podcast and give this some thought.
SPEAKER_00:And if you don't mind me adding just one other point that's sort of the opposite side of the argument, it's why this is important. And it gets to your point about there's always people arguing against even the concept. Is I find it, to be quite honest, disingenuous how many people who were arguing. This sounds pretty pointed, but I'm going with it, that hey, the masters of social work should have been included in a definition of a professional degree so that students could borrow up to$200,000. And I heard that argument, and I'm like, are you kidding me? Your argument is could we please let social workers run up more than$100,000 in debt? That's your argument. So my point is, yes, there's going to be some of the resistance that's conceptual in nature. And I think there's a need to say, sorry, you're going to have to find a new way of figuring this out. So hopefully that won't get you in trouble that I mentioned that example.
SPEAKER_02:No, it won't get me in trouble. I've already been in trouble often enough over these issues. And specifically with a particular institution here in California that is famous for their social work program. Okay, we'll say no more.
SPEAKER_00:Most people have figured that out.
SPEAKER_02:But but no, I think I think your point is well taken. These are the kind of arguments that tend to pop up in moments of increased accountability, calls for increased accountability. But you know, I just think if you're an institutional leader and you're still fighting this fight on that level, I'm not saying that we shouldn't fight the fight over what is the right metric, what is the right data, to your point. But if you're still arguing that we can't have this kind of accountability, then you have not been listening to what's going on across the country.
SPEAKER_00:And I think this is part of what you're saying. And and don't assume that it's caught up in polarization because it's a bipartisan move towards accountability.
SPEAKER_02:And we'll jump into the the graduate student loan conversation in a minute. But when I was in those conversations in DC, one thing that became clear to me early on, way before you know the big beautiful bill came about.
SPEAKER_00:I think the cool kids call it OB3.
SPEAKER_02:OB3, yes, yes, and that's why I don't call it OB3. But one thing that became clear was that this frustration with graduate student loan borrowing was bipartisan, cross-isle, you know, this was going to happen. And I warned my colleagues early on that if this is a point of bipartisan agreement in the Senate, guess what? Then this means that there is a lot of support for this direction. So anybody caught by surprise by what happened to the graduate student loans has not been paying attention or reading the writing on the wall. Those are frustrations that I frequently have. I just don't understand what universe sometimes our educational leaders are living in. But nevertheless, there are reports that come out every week about uh economic mobility, return on investment, uh, programs that pay. You know, the Georgetown Center on Education in the Workforce recently has come out with a few reports. Most recently, baccalaureate programs of study and whether or not they pay off. Based on what you've seen, do you see anybody that you think is doing it better than others in terms of publishing the data, something that the federal government could point to?
SPEAKER_00:Well, I think at the Georgetown CEW, part of their benefit is they've been doing this for a while. They've been exploring it from different angles. And so they were an early leader to look at both the education and the workforce side and how they connect together. So I give them a lot of credit just for their long-term commitment to this issue. I think the underlying data, the University of North Carolina system that did that big report a couple of years ago, I felt that some of their conclusions were a little bit watered down. But the data collection and the way they viewed it, I thought that was quite good. And it was statewide and it looked at all the colleges within the state. The Texas Higher Education Commission, that they are not just doing research studies. It ties into funding in Texas. So I would argue they're a leader into the accountability, not just the concept, but actually tying it to funding. So I would point them out. And then also go back to that report that you mentioned. I really appreciated the Postsecondary Value Commission funding the University of Wisconsin researchers and looking at one metric. So they're not doing an overall here's the total return on investment. They just provided a very actionable, useful research report on the subject that helped explain things in neutral terms and hopefully will really inform what's happening in DC starting in December. So those are a couple that I would point out. I I see a lot of snippets here and there that are useful. Yes. But there's a lot of need to get the word out, not in a marketing sense, but to make sure people are understanding. There's almost a before 2026 and an after 2026. That's one of the key messages, is we're moving into accountability for nearly everybody. As in, you could lose your access to federal financial aid loans. That changes the game from research report and dashboards into, ooh, we better pay attention. So that's part of the reason I'm really harping on the importance of what's about to happen and the long-term work you're mentioning that you've been involved in, I think it really changes next year.
SPEAKER_02:I I agree. And I definitely think it is time for institutions to pay attention to this because it is going to creep up on them. And if they don't make their voices heard now, I mean, we're we're in an era of negotiated rulemaking that's a little different than what it was in the past. Now, we can always argue that depending on which administration you have, there's a slant in the negotiating rulemaking. But based on what I just saw with the graduate student loans, the department comes in with a very specific point of view. So institutions and their advocacy organizations better speak up now and better participate.
SPEAKER_00:And I'd also point out, I think there's something unique, and that this was the RISE committee that just concluded two weeks ago. That was the only the second negotiated rulemaking and education that actually reached consensus for the full package in the past decade. So we already know that the language was captured by that group. Now, part of the reason I mentioned that, each administration has different priorities, but I think there's also a negotiating tactic that the Trump administration is doing. Yes. Where they said the consensus was for the whole package, not for individual topics. Right. And I think they used that to sort of, well, they definitely did to strong arm into a consensus. They use pretty sophisticated negotiating because they explicitly said at the end, all right, this isn't perfect, but if we don't reach consensus, you're going to lose all these other things that we did agree on. And that was, I'm not trying to defend it or criticize it, but I am pointing out it's actually pretty different. And I think people need to be aware that I expect this upcoming rulemaking to have similar negotiating tactics behind that we haven't been used to.
SPEAKER_02:I certainly agree with that. Let's continue talking about federal policy and the most recent rulemaking regarding things like graduate student loans. Based upon what you've seen in the marketplace, well, and let me take a step back. I mean, I'll I'll put my bias on the table. Having spent a lot of time either on the UC Board of Regents or watching the whole debt crisis come about, whether my time in DC or in other roles that I've had, this has definitely been a point of frustration for many people on both sides of the aisle. My experience on the UC Board of Regents was that year after year we kept seeing more and more graduate programs come to the board to seek professional status because that allowed them to then charge what in the UC what we call professional fees, fees on top of the usual tuition. So they were more expensive. But I've seen a proliferation over the years of what some call or try to call professional graduate degree programs and thus charge a premium for them. We saw that in the example that you just mentioned, social work, which clearly, if you look at the earnings of a social worker or a person employed in a county or a city here in California, it's virtually impossible to pay back that loan based on the earnings that you're going to make over your your lifetime, particularly if you're getting into that field of study, that field of work in your late 20s, early 30s, some of them in their 40s. So I understand the deep frustration that people have with the amount of debt that was being accumulated and the lack of economic return for that debt for graduate programs. Based on what you're seeing, how do you think that this is going to impact colleges and universities that offer graduate programs and particularly professional programs?
SPEAKER_00:I think it's going well, cross-subsidies. That's what's going to take a hit. Yeah. Is if you look at it on a program-by-program basis and argue about professional status, I think that's missing the big story. I mean, it's important. But the reason these programs are proliferating is these universities want to have that money and they use a lot of it for cross-subsidizing other university operations. So I think the biggest impact is going to be on universities at large, not just on individual programs. You'll see things like Santa Clara University, which is private, but you know, you notice they just changed, they created a grant or a guaranteed grant of some type. That put them right at the limit of the new loan limits. And I think we're going to see more of that, where schools are saying, we recognize the importance of we better not go above this dollar amount, or else we're going to have a real problem. So I think you'll see more of that, but the bigger impact will be university-wide. And you can criticize, or my biggest criticism is how is theology in there as one of the professional programs right now, yet airline pilots, where there's a clear path to payback, it's not in there. So I think that's an example, the biggest example of why is this considered professional instead of this?
SPEAKER_02:I don't know. It should make you scratch your head. And that that's where this this industry, my industry, has had too many of these moments where you're doing things and the rest of the American public sit there and scratch their head.
SPEAKER_00:Yeah, exactly. So there's that. But the overall impact, it is going to force these graduate programs, whether they got professional status or not, to start actively managing it. And what that's going to lead to, I think, along with the accountability, the combination, is now at the leadership level, presidents, their board, their board, their C-suite, the provost, at that university leadership level, the CFOs, they're going to need to start doing portfolio management instead of just handing off so much of that to individual colleges, deans, and department chairs. So it's going to raise portfolio management up. And a big topic will be wait, why are we charging this much? That's going to cause this problem. You know, what's going to happen to our cross subsidies? So and overall, I mean, from a personal standpoint, that's a good thing. I think we should be having these conversations.
SPEAKER_02:We should be having these conversations. And my fear, although it's wouldn't characterize it a fear, it's it's going to be a natural reaction in addition to the things that you just mentioned. I think one, there'll be more pressure on deans to fundraise outside of, you know, charging tuition to maintain their programs. Two, there's already a lot of discussion about coming up with private financing mechanisms for some of these programs. I I hear this a lot coming up in law programs these days. And the concern that the CAP will restrict the amount of low-income learners that can access top-tier law programs. Although I'm not sure that top-tier and having to charge that much always goes together, but apparently in the legal industry it does. Do you have similar concerns? Are we going to see a lot more private financing schemes come up?
SPEAKER_00:Well, concerns on how it's managed. Will it be like it was in the 2000s? And some of the loans were exorbitant and such high interest rates that even if you get people into this, they're going to have a lifetime of debt, even worse than going through the federal program. Yeah, so I'm concerned about that. I've talked to a few schools, and maybe this is Pollyanna, that is hoping that part of what will happen is universities will get creative on, okay, I as a university will find a way to back a loan. So the loan's from the private source, but because the university is backing it, it could be a lower interest rate and a better way to help students who need to have it. That's what I hope we see, as opposed to just a return to what we were seeing in the 2000. So do I have a concern? Yes. But to be quite honest, I have a bigger concern if we did nothing about it. So not trying to be heartless, but yeah, I it's a secondary concern. I think the bigger problem is I think there should be downward pressure on the prices of these programs. Agree. In the end, that's what's going to actually help lower income students more than the near-term pain that we're going to see.
SPEAKER_02:So I hope that this sort of is a reckoning, and to your point, that it drives down the cost of these programs. Yes, they will always be expensive programs, but I think if we relook at the way that we deliver the teaching and learning in programs, particularly as archaic as law, rethink what good quality is and find ways to lower the cost. I think that's a good conversation for academia to have right now. Let's jump into one last topic before we wrap up. You spent a lot of time looking at the ed tech marketplace, you spent a lot of time looking at online programs, and while some of this other news has sort of has drowned out some of the other things that have been going on for quite some time. I I want to focus a little bit of attention on what's happening with OPMs, online program management companies. There was sort of this shakeout uh about a year or two ago, you know, all the concerns about the you know 2U and and some of the other OPMs. There was a lot of pressure put on them. I think there was a bit of a shake out. Where do you see the OPM marketplace right now? And do you see that it's still under pressure from consumer advocacy groups?
SPEAKER_00:Well, I'll answer the second question. Yes, they're still under pressure from advocacy groups, but it's mostly now at the state level and not at the federal level. But we can get into that. Where do I see it? It's it's a it's a market in that's in the middle of an inflection point. And keep in mind, 2U did not go bankrupt because of advocacy groups. They went bankrupt because of their debt management and their acquisition of edX. That's what led to them going bankrupt. Now they're out of bankruptcy and they've done a great job with that. But I'm waiting for them to actually say, well, here's the revised strategy, here's who we are today. I know they're trying to evaluate it, but my goodness, it's more than a year after bankruptcy, and there's no new messaging coming out of that. You have Coursera, who basically said, our OPM business, we're not pulling out of it, but it we're not even going to separately report it, and we know that the revenues go down, and we don't care. So Coursera has effectively pulled out of a lot of the OPM market. Wiley sold to academic partnerships, became Rise Point, and now they're the big player, which is pretty interesting that they're the dominant. That's not who I would have predicted 10 years ago. No offense to the leadership there, but I wouldn't have predicted that. So where you are now is a whole new market leader that has sort of flown under the radar from a political standpoint for a long time, and I think they're doing fairly well. They're getting attacked more at the state level. The most recent state with action is likely Illinois, but definitely the Minnesota law. There was some action in California, but the Senate bill got defeated that would have partially impacted them. So it's state-level issues they have to manage. But the bigger issue for the OPM market is you can't run your business the way you did 2015. That's right. Colleges and universities are different. They have a different set of needs now, particularly after COVID. So the market needs a reset, not necessarily from policy issues, but from market issues. I've been disappointed thus far on seeing revised strategies and models and strong bets. You know who I do see that from and who seems to be doing well are the ones that we used to consider partial OPMs or on the fringe, you know, like collegiate, Everspring, Education Dynamics, Archer, sort of the second-tier type of players. They seem to be the more nimble companies in doing better now. Now, I don't know how that changes the big players like Risepoint, but I've seen more innovation there than I've seen in the mainline OPM space. So what am I watching? There is state level policy, but a bigger question to me is market demand. And when and how will they actually strategically change their offerings to be ready for the next 10 to 15 years and not just living on what they used to do. So it's a market that has not made the changes it needs to make yet, is the way I would characterize it.
SPEAKER_02:I would agree with that. Clearly, in my view at least, there still is demand for the services of OPM offer. I just think about the California State University system, it's in a huge hole right now, has enrollment challenges, and it really needs to find its footing in being able to reach learners outside of the brick and mortar. So there is still a need, there is still demand, but I agree that the the formula needs to change in order to keep up with the changes in the type of demand and the marketplace. And I think once and for all, they need to solve this issue that keeps coming up around transparency in terms of who the learner interacts with and do they know what's what's happening.
SPEAKER_00:Well, that then look at the state level. In Ohio, you should be happy then because the initial bill produced in Ohio was a draconian ideological, let's kill OPM. Right. There's no two ways about it. That's how it was introduced. The Ohio Senate really, it was almost like the adults came in the room and said, no, we're going to take what you're what's really needed and come up with a more effective bill. And the centerpiece relating to OPMs is transparency. Let's make sure it's obvious who you're talking to. Do they work for the university? Do they work for a third-party company? So I I assume you like the way the Ohio built.
SPEAKER_02:I I do. I think my my biggest issue is just it's the transparency. Just answer the fundamental questions. The learner should know who they're interacting with, and you know, the public should know who's paying for what. Uh particularly if it's a public institution. If it's a private institution, well, that's that's a different ballgame. But any public institution, it there just should be clarity and transparency, both for the sake of the of the college or the university, but also for the sake of the of the vendor, the partner. I I just think it's it's just a cleaner transaction. There is a need, there is demand, there is expertise. Colleges and universities contract for expertise all the time, every day. So this is not something unique. Just be transparent about how it's working and make sure the learner knows who they're interacting with and and where they they can get support. So those are my only issues, and and I hope that this is something we can resolve because many, particularly public regional universities and a lot of the privates, the small privates, are really suffering right now. And they they need a different strategy. They need to figure out different revenue.
SPEAKER_00:I'll add one at the risk of I know we don't have time to go down this rabbit hole, but it's a big rabbit hole. Gen AI. You don't want to rely on individual schools having to figure out what's changed in the past month and how does that impact the ability to do an online program. So I'm seeing an increasing demand for OPMs or related companies who can help say, here's where Gen AI is going, and we're going to help you take advantage of it and not get hurt by it, ideally. But my point is, I actually agree there's demand, and I'm even seeing increasing demand once you throw Gen AI in the mix. The question is, well, policy transparency that you mentioned. But the other question is, these companies need to update their models so that they can meet this new demand.
SPEAKER_02:Agreed. And maybe we will come back at another time when we give you your robe that has the number four on it, just like Saturday Night Live does for their hosts. Yes, um, and we can talk about Gen AI, but that's for another episode. Maybe after we survive the ASUGSV summit, we'll come back and talk more about that. Yeah, good. And I look forward to seeing you there. All right. Well, Phil, thank you for being with us again. And as always, thanks for your insights and for just leaning into these issues every single week. I enjoy reading all your pieces and your newsletter.
SPEAKER_00:Well, thank you very much. As always, I have fun talking to you, and it's great to jump into meaningful, deep conversations right away. So thank you.
SPEAKER_02:All right. Well, thanks for joining us, folks. You've been listening to my conversation with Phil Hill. Phil's a higher education consultant. He's also the editor of the Phil on EdTech newsletter, which everyone should be reading. I'll put a link to where you can access the newsletter in the notes section of this podcast. If you're watching us on YouTube, please hit subscribe, continue to follow us, and if you're listening to us on your favorite podcast platform, download our episodes and continue to follow us. Take care, everybody, and we'll see you all soon.
