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Regulations Affecting Rationale and Revenue

November 11, 2010 1 comment

I love education sales. There is nothing more gratifying than speaking with someone who genuinely is looking to better their life, having them “paint the picture” of their future, and knowing that by referring them to a degree program, you are ‘bettering’ the chances that they will get a job in the future.

For a decade I’ve been doing this, whether it be directly selling, building education businesses, call centers, training, or marketing programs. The past week I launched another business and I’ve been “back on the phones” as I don’t believe in “starting” a business without knowing your consumer. The students that I’ve spoken to have been of the highest quality and caliber I’ve ever driven to a call center; direct from television, no incentives, no discussion about money. Prospective students calling in solely because they are trying to better themselves.

And having a database of thousands of schools to refer students to used to be fantastic. I know the schools, how they work, and I know they do help people. That said, this week something has been different. While I know I am doing the ‘right’ thing by referring students to certain schools – there has been a hesitation to refer many of them. So, instead of turning them into revenue, whether it be by referring them to a school or even enrolling them myself, I’ve been searching for them. When a student calls in and says they want to go back to school online – I end up googling for community colleges near the students that have “distance learning” or “online programs” in their area. I’ve been explaining to students that there are numerous options, giving them the info about the for profit online universities, and then also giving them the information about the community colleges in their area…along with a recommendation that if the community colleges do offer the programs they are looking for, this is the “way to go” as it is less expensive and can be transferred into a bachelors degree program.

As I am fully aware of the value and quality of the online for profit programs; typically the teacher quality and curriculum is ‘better’ than a community college, I’m also flashing back on the loan repayment rates; or I should say, the lack of loan repayment rates. Over 80% of students going to school online are now in debt and about 50% of them are in default. I can’t get the picture out of my head of the spreadsheet I was given with those numbers.

While I have been perturbed with the increasing bad publicity surrounding the for profit universities; I’m seeing how it can affect those of us who believe in and support online for profit higher education. Data is data; numbers are numbers; and if someone like myself, a revenue driver to the core, is making the decision to send students to community college (if available), what will happen everywhere else?

I was lucky enough to be trained at the for profit university and I was trained to do “what is in the best interest of the student”. I was taught, “Enroll the ‘right student’, in the ‘right program’, at the ‘right time'”. We always asked if a student had a local community college that offered online education if the student needed their Associate degree. I wonder…if the online for profit colleges partnered and shared their model with the for profits for Associate degrees; and offered the matriculation into the Bachelors programs at their universities – would this be sustainable? I believe so and I believe it would be a “win/win”.

Less Revenue for the for profit school in the short term, but a higher net tuition revenue per student in the long term. Students enrolling with associate degrees AND students that have had online education experience have a higher likelihood of graduation – therefor decreasing the default rate and increasing loan repayment numbers.

Is it that simple? Or are these regulations just affecting my rationale?

“Live to Work” or “Work to Live”?

September 17, 2010 6 comments

I’ve always believed in the companies I’ve worked for. Similarly, I’ve always believed in the bosses I’ve worked for. I’m unsure if this was “luck” or me seeking out people who inspire me and business models I take pride in working for, but regardless, I realized this past week I wouldn’t except anything less.

I never understood how people could work 9 AM – 5 PM, take a lunch hour, and go home feeling fulfilled at the end of the day. Perhaps it goes back to the age old verbiage, some people “live to work” while others “work to live”. I’m more of a “live to work” person. I had never really ‘discussed’ my career / career options with anyone except my husband and friends, and as I’m at what I believe to be a pivotal point in my career; I decided maybe it was time to speak with an expert. No, not a ‘shrink’, but a career counselor.

While I’m consulting right now; owning my own business, I do want to go back into the ‘working world’; I miss having a team and definitely miss having people around I can learn from. As the higher education industry is booming right now (perhaps not in a good way), jobs in the industry for innovators are aplenty. Every time I interview or speak to a prospective company about a future relationship, I get excited. I can’t help it; I love building things from the ground up. That said, I couldn’t figure out why I was always excited (at first) and the more I learned about each company, the less excited I became. I loved the people, love the ‘start up’, but my gut was repeatedly telling me, “STOP”. I couldn’t figure out why, but after reviewing my notes from the career counseling session I had, it was clear; it’s because I’m not passionate about anything I’ve been offered. There is nothing truly innovative, nothing new, and certainly nothing that will address the issues the for profit education sector is dealing with right now.

This is an interesting paradox for someone who owns their own consulting business as the way I make money is by working with companies and teaching them how to do things that I’ve done successfully in the past. The problem is; I don’t believe most of what the for profits have done in the past will be useful for the future. Certainly, the skill sets and experiences will help to be successful, but innovation is going to ‘win’ in this industry. So, for the past 8 months I’ve been working, doing what a ‘consultant’ does, made more money than I’ve ever made before; and I have a fiduciary responsibility to continue running this business until I do find something full time that I am passionate about. But I wonder, from a psychological standpoint, how one can continuously work on projects that I don’t believe have a solid chance of long term success?

Short term success? Certainly. Can I bring a business to profitability? Can I teach them best practices? Can I education them about marketing, call centers, operations, and give the best recommendations in TODAY’s world – Absolutely. But in this industry, ‘today’s world’ is rapidly changing.

So the question for me is – how long am I willing to work for businesses I’m not passionate about? I’m delivering for the companies; but not delivering for myself. I am not fulfilled. I hate working from 9 AM – 5 PM. I hate not waking up at 2 AM with a great idea that I can draw up and execute on as I rush into the office at 7 am the next day. I hate not feeling the ‘fire in the belly’. But, I guess this is the life of a consultant. People pay you for your expertise, but you’re not necessarily building something that matters. I originally thought they money would outweigh the need to be passionate about a business. When the money didn’t excite me anymore, I told myself that the executives I was learning from would motivate me to feel passionate about what I was doing. Turns out, that hasn’t worked either. So, I continue in my quest for a meaningful role in a company I believe in and whose model I am passionate about. And I’m left with the question: Would life be easier if I could ‘teach’ myself to “work to live” instead of “living to work”?

For Profit Edu Sector – Embrace Your Innovators

September 9, 2010 8 comments

Approximately 1.5 years ago, I left the innovative company I had helped build, Education Connection. I had found a new innovative company whose mission I loved, and I wanted the experience of working with the “state university” side of the online higher education industry; so I left my comfort zone and moved across the country to Dallas, Texas. I also wanted to “prove” to myself that I could be successful without my two mentors; I felt it was time for me to “grow” on my own.

This turned out to be a necessary part of my ‘journey’ as I was able to grow, learn how to interact with a different group of executives, board members, and cultures and also afforded me to opportunity to see how different working with state universities was vs. for profit universities. I was able to ‘prove to myself’ that I could be successful without my mentors, which was good and bad. Good because it made me more confident…bad because I certainly didn’t need anymore “ego feed”.

By adding this new subset of an industry and connecting with myriads of new individuals, I was able to see one thing: I had been working for (Education Connection) the most innovative and forward thinking group in the education space.

Based on the number of consulting and job inquiries I was recieving while at the second company (post working at Education Connection), I chose to start my own company. I believed this was a way for me to work with multiple companies, multiple executives, and would provide me with an unbelievable learning experience; the ability to interact and learn from the top executives in the higher education industry.

At this juncture, I’ve worked with about ten different higher education service companies, ranging from lead generation to call centers to enrollment management companies; and multiple schools. I have learned a lot, but my biggest learning was this: The only companies that will survive the new for profit education regulations would be the ones that invested heavily and believed in their innovators. In speaking with one of the executives I enjoy working with the most, a brilliant man named John Goodwin, he made a comment I use all the time now. He said, “The companies that come out of this education congressional hearings successful will be the companies that not only listen to their innovators, but more so will be the companies that have the ability to adapt the most quickly to a changing environment.” We were going back to Darwinism.

Having worked with all of these schools and companies, there is only one company that has come forth and displayed a pro-active understanding as well as comprehensive product offering to aid the for profit schools in their quest for higher graduation rates and higher re-payback rates on their loan; that company was Education Connection.

About 5 years ago, my prior CEO and mentor Richard Capezzalli said to me, “What will happen to the for profit education industry in the next several years is going to be cataclysmic.” I vividly remember this as 1) I didn’t know the exact meaning of cataclysmic and had to run and look it up. 2) We had recently started a lead generation company, Education Connection. I thought to myself, ‘why would we have started a lead generation company if the for profit industry is going to be shaken up so badly?’

In the subsequent four years and and 11 months, I learned the reasoning behind our ‘lead generation’ company; we were building a lead gen ‘model’ to learn the best ways to market to students, but the end goal was different. We were looking for students that yielded the highest graduation rates, or net tuition revenue; not solely the lowest cost per acquisition or cost per enrollment.

So after about two years of introducing ‘innovative break through’ #1 (we were the first lead generation company) that had employed prior admissions advisors and were warm transferring leads to the for profit schools at over 10% lead to start conversions; Richard, the innovator, introduced the true reason he was confident that EdConnect could take over the industry; at first, he called it “Future Scholars” (It is now called Test Drive College).

With the goal of advising and working with students who would yield the highest graduation rate, Richard quickly went back to his days of owning and running schools. He explained to his EC management team that 2 of the main reasons students did not stay in school were 1) They were not prepared for the rigors and discipline needed for online learning and 2) Across the entirety of the ‘edu lead generation industry’, we were marketing to people who were not “academically ready”. So, logically – if we were able to find a way to ensure that the students were 1) Academically ready 2) Had the ability to experience online learning (and not just a demo, a true class), the retention and graduation rates would rise dramatically. This would not only effect graduation rates in a positive manner, but would also positively effect loan re-payback rates and minimize loan default rates. There is a direct correlation between students graduating and having a higher payback rate.

The model went live with a large test utilizing two of the large for profit universities as ‘partners’ and while it took a year to get the student retention rates back, the test was wildly successful. “What is the model?” you ask. In it’s simplest form, students take an online accredited course (they can transfer into a school) for free; hence the word, “TEST DRIVE”. In order to be one of the chosen for this free course, the student first must pass a short test (SAT questions – I believe there are 20 of them), which demonstrates the student can sustain the academic climate in a college. Once the test has been passed, the student speaks with an advisor or “gatekeeper” as we liked to call them during the testing phase; whose job is to ensure that IF the student does “adapt” and is a “fit for online learning”, they will enroll in a school post taking the free online course. The goal was to ‘weed’ students out in this free course that did not like online learning. We only worked with students who were serious and who understood the value of the degree, the financial aid process, etc.

The tests were wildly successful. The hypothesis that these students would retain and have higher graduation rates was proven (patience was certainly a virtue as it took over a year for these retention numbers to come back). The company that had been the first to see these regulations would be coming (about five years before they came), the company that quickly executed on their innovative plan, the company whose tests were successful prior to any regulatory discussion taking place – this is the company that is positioned to aid the for profits in their quest to continue to help the students who have nowhere else to go. The company that was the first to embrace their innovator was Education Connection. Will you be next?

Why I’m Thankful For “For Profit Education”

August 11, 2010 4 comments

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A decade ago I started my first job. While I cannot recall all of the two week training, I vividly remember the President and Chief Operating Officer coming in and making a speech. Andrew Rosen, now CEO of Kaplan Inc. said, “Congratulations on working in a company that changes lives. Neither myself nor anyone else in this organization will ever ask you to do anything that you cannot go home and brag to your grandparents about. You will go home everyday proud of the job that you do – because what you are doing is changing people’s lives”.

Over my six years with the Kaplan Inc. conglomerate – he was right. My initial training was engrained in me and still is; “Enroll the right student, in the right program, at the right time.” Those of us in the for profit education industry that live and work by that Kaplan motto go home everyday and say to ourselves, “I changed a life today.”

With all of the negative light shining on the for profit education industry, recently I’ve been feeling angry and a bit jaded. Certainly, there are one or two ‘bad apples’ and everyone makes mistakes; but what was not shown are the thousands of lives that have been changed for the better because of for profit education. The government chooses to neglect to mention that for profit education came about based on a need. There were (and still are) thousands of people who were unable to get into a community college or state universities because the classes were too small, not offered at the right time, and sometimes – too expensive. The pioneers in the for profit education industry have helped better hundreds of lives and supplied thousands of degrees to those who would have otherwise not had an option.

Certainly, I am against any fraudulent behavior, and I don’t think setting regulations is a negative. However, the public slamming of an industry is not just hurting the businessmen; more importantly, it degrades the names of the institutions and devalues its education; this affects the students. Graduates of these programs not only took courses that met the same academic standards as any other regionally accredited institution, but they were also extremely disciplined and determined. They should be applauded for their degree; not meant to feel bad about it.

I go back to the statement Andrew Rosen made eight years ago and look at what he, as well as some of the other leaders in the for profit industry have said and done; and I’m proud to be a part of bettering people’s lives. I’m thankful that educators were innovative enough to allow for the growth in the for profit and non profit education world; and I hope that we remember, as we are reviewing and revising the regulations, that these men are brilliant businessmen. The CEOs in these companies could have gone anywhere and done anything; but they chose to help people. They did not choose to short stocks or to bet against the mortgage industry; they chose to better people’s lives. The government needs to remember that before defaming these schools and their names.

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Bill Gates: Proponent of Higher Education Online

August 8, 2010 2 comments

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At the recent Technonomy Conference, Bill Gates talks about the need for more online education. He states there “will be” five times more college courses online and that this is the only way for the schools to provide education to everyone who wants and needs it. The first minute of the video speaks more to the younger scholar; K-9, however the other 2 minutes of the video show his support for bringing our traditional schools online.

While very short, what I like about what Bill Gates stated, is that he obviously knows that online education is NOT for everyone and makes this clear. He states that college courses online are for the ‘self motivated’ learner.’ This is an important point that many of those outside of the online higher education industry miss; in order to succeed online, students must be self motivated and certainly disciplined.

Bill Gates said what everyone is saying and only a handful of state schools are acting on: We need to take tuition that’s $50,000 / year and figure out how to provide it to everyone who wants it at a lesser price – even stating that placed based activity will be five times less important than it is today.

Not only do I agree with Mr. Gates in his projection, but also in his open admittance that online education is not for everyone.

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NY Times says, “For profit schools mislead students”…I say, “NY Times misleads the public”

August 3, 2010 8 comments

The NY Times article on for profit education published today spoke of the reported findings that we will read about tomorrow when the government issues it’s investigative research on the for profit schools. As I read through the article, I was trying to find what was ‘different’ that was told at a for profit school and what is told at a State University or Public Institution. I’ve worked with both, and certainly do not ‘like’ one more than the other; however I do have an issue when 1) The Time write clearly has not done their research 2) The article is clearly one sided.

The article gives lines and lines of examples of colleges ‘misleading’ students, but it only has 2 lines that say anything positive and gives no examples:

But in some instances, the report said, the applicants were given accurate and helpful information, about likely salaries and not taking out more loans than they needed.

Furthermore, instead of singling out the for profits; has the government investigated public institutions this way? I would be interested to see a comparison study as I do not believe there will be much of a difference.

In the review below, I try and play “both sides of the coin”.

Let’s look at what the Times claims this misleading information to be:

Example 1:

” At one college in Texas, a recruiter encouraged the undercover investigator not to report $250,000 in savings, saying it was “not the government’s business.” At a Pennsylvania college, the financial representative told an undercover applicant who had reported a $250,000 inheritance that he should have answered “zero” when asked about money he had in savings — and then told him she would “correct” his form by reducing the reported assets to zero, a change she later confirmed by e-mail and voicemail.”

What the Times does not follow up with is any review of the FAFSA and what is / is not required to be filled out. It is “optional” for a student to input how much they have in savings because the FAFSA is NOT BASED on what is in savings. Hence, it is not the government’s business. The only thing done wrong here is that the recruiter spoke to the student about financial aid AT ALL.

In the second sentence, the financial representative was correct. An inheritance should not be reported as such in the savings column as it would fall under a different category on the FAFSA.

Example 2:

In addition to the colleges that encouraged fraud, all the colleges made some deceptive statements. At one certificate program in Washington, for example, the admissions representative told the undercover applicant that barbers could earn $150,000 to $250,000 a year, when the vast majority earn less than $50,000 a year

Let’s note the word, “could” in this sentence. “could earn”…not “will earn”. Granted, the recruiter should have told the student to go to the BLS and look up the stats or looked up the stats for the prospective student, but the recruiter did not site where she received this information either.

Example 3:

And at an associate degree program in Florida, the report said, a prospective student was falsely told that the college was accredited by the same organization that accredits Harvard and the University of Florida.

Again – this is a true statement by the recruiter. All of these schools ARE regionally accredited.

In these two instances that the Times sites below, the actions taken by the for profit colleges are exactly the same as would be taken at a traditional public university:

Six colleges in four states told the undercover applicants that they could not speak with financial aid representatives or find out what grants and loans they were eligible for until they completed enrollment forms agreeing to become a student and paid a small application fee.

I went to the University of Florida. I was able to fill out my FAFSA prior to admissions. I was also able to enter the school code so my FAFSA went to the right universities. I was not able to find out how much financial aid I was awarded SPECIFICALLY at the University of Florida; however like anyone else in the world, I could have called up FAFSA and asked how much financial help I would be getting. I had to pay my application fee and get my documents on file like everyone else. This way, when my FAFSA was sent through to the college, they were able to match it with an applicant (*or prospective student).

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Don’t Blame For Profit’s Innovation! Blame State School’s LACK OF

July 4, 2010 7 comments

Am I one of the only people who want to say “thank you” to the for profit schools? To the online higher education market? Thank you University of Phoenix and Kaplan University and all of the other universities who had the courage almost a decade ago to take a risk. A risk that has not only provided individuals the opportunity to get their degrees even while working and taking care of families, but also paved the way and built the models that now allows state universities to offer these degrees online as well.

As congressional talks surrounding the negative impact online education has had on graduation rates and specifically loan default rates; what we are not hearing are long term solutions. We are hearing suggestions of band aids. Do I like the idea of the gainful employment laws? Yes! That said, if we are going to implement them, it should be done across the board and it needs government support to get started. What these lawmakers are failing to recognize is that it took guts, innovation, large investments; and a lot of time NOT being profitable for these for profit online education companies to get where they are today…and the model is less than TEN YEARS OLD. How can the for profit schools be expected to figure out HOW to raise their graduation rates and how to lower their default rates when most of them just recently figured out how to get students to graduate?

The disservice that has been committed in the higher education industry is not from the for profits; but rather – I blame the state universities; specifically, the marketing departments at these state universities. There are hundreds of state universities offering online programs at low to medium prices. We have seen everything from $7,000 M.Ed Programs all the way through $13,000 nursing programs. Not only are these programs far less expensive, but their graduation rates are higher. Again, as these state universities online degrees have only been around for about five years; perhaps there is not enough statistically significant data here, but it does look promising.

So instead of attempting to shut down an industry that has opened the doors for people to better their lives; why not work with the state universities to offer more of these programs that have displayed high graduation rates, low cohort default rates, and other positive statistics. The marketing teams at these schools are to blame; they are the ones not fighting for the budget or not taking the risks. If all of the for profits can run television, why can’t the state schools? It’s relatively inexpensive to run remnant television and these days, television can be run on a cost per inquiry basis. If the state universities and enrollment management companies are too “fearful” to go into the red for a couple years – maybe the government should be forcing them to hand over a portion of their revenue and allow the marketing geniuses at the for profit schools take a stab at branding and developing them.

It’s not the for profit schools that are the problem; it’s the state schools lack of motivation and understanding of how online education will better the lives of millions. The disservice is that of our state schools poor marketing, slow admissions, and fear of investment. The online for profits gave you a model to follow and then MAKE BETTER. Do it already.

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