Beyond the Metric: Why Accountability Requires Institutional Leadership

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I recently had the pleasure of returning to Eloy Ortiz Oakley’s The Rant Podcast for my third appearance, where we dove deep into the nuances of federal accountability policy, specifically the Earnings Premium framework emerging from the OB3 (One Big Beautiful Bill Act).

While my work (and the work of organizations like the Postsecondary Value Commission and its researchers) has focused heavily on the fundamental flaw of the chosen federal accountability metric, my conversation with Eloy underscored a larger point: accountability as a concept is an important part of improving higher education outcomes, and institutions must wake up to the implications of this new bipartisan reality. Some of the key topics we explored:

Unintended Consequences

I am a supporter of the concept that programs should be held accountable and may lose access to federal financial aid if they fail to provide an economic return. However, the current Earnings Premium metric is poorly designed because it uses only one metric (ignoring debt and cost), and it relies on a flawed data comparison group. This comparison aggregates data across an entire state, ignoring major demographic differences (like gender) and huge variations in sub-state regional income levels. This approach disproportionately penalizes public, open-access institutions in low-income or rural areas, even when their graduates see real income gains. For instance, the new PVC report confirmed that using a local metric (like commuting zones) might lead to 754 institutions (about 16% of all US colleges) to pass ROI metrics they would otherwise fail under the state-level comparison. No school should get a sympathy pass, but it is bad public policy to discourage colleges and universities because they operate in low-income areas.

The Disingenuous Debt Argument

The conversation about accountability often reveals arguments that prioritize institutional revenue over student financial health. We touched on the concerning arguments made in favor of increasing borrowing limits for certain graduate programs.

I find it "quite honest disingenuous" that some people argued for including the Masters of Social Work program in the definition of a professional degree so that students could borrow up to $200,000. The core argument became: Could we please let social workers run up more than $100,000 in debt?. As Eloy noted, given the typical earnings of a social worker in a county or city setting in California, it is "virtually impossible to pay back that loan" based on expected lifetime earnings. This resistance to accountability suggests some leaders must be forced to find a new way to operate.

Cross-Subsidies and the Need for Portfolio Management

The new cap on federal student loans for graduate programs—a direction that had clear bipartisan support—will significantly impact university finances, particularly concerning cross-subsidies. Many graduate programs, especially those that have proliferated and charged a premium (often through "professional fees"), have used this revenue to cross-subsidize other university operations.

The combination of loan caps and earnings accountability will force universities to confront this model. At the leadership level (presidents, CFOs, provosts, and boards), universities will need to start executing portfolio management. They can no longer simply hand off decisions to individual deans. This raises essential questions: "Why are we charging this much that's going to cause this problem?" and "What's going to happen to our cross subsidies?". Ultimately, this pressure is a positive development, driving a necessary downward pressure on program prices.

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I encourage you to listen to the full episode as we also touch on the complexities of OPMs and the state of the edtech marketplace.

You can watch the full interview here: [Link to YouTube Video] I have included a full transcript below.

Lightly Edited Transcript

• 00:00 Welcome to The RANT Podcast

• 00:23 Introducing Phil Hill and Today's Topic

• 01:00 Federal Accountability Framework Discussion

• 03:20 Concerns and Challenges with the New Metrics

• 27:16 Graduate Student Loan Cap and Its Implications

• 34:42 The State of the OPM Marketplace

• 42:35 Conclusion and Final Thoughts

Eloy: Hi, this is Eloy Ortiz Oakley, and welcome back to the Rant Podcast, the podcast where we pull back the curtain and break down the people, the policies, and the politics of our higher education system. In this episode, I welcome back Phil Hill. This will be Phil's third appearance here on the Rant 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. Phil does an excellent job of digging into the education technology marketplace and most recently digging into federal accountability policy. 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 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. The federal policy framework, the new accountability framework, takes into consideration earnings for programs of study. For those programs of study that don't, over a five-year period, have earnings premiums that are above and beyond what you would have otherwise earned right out of high school, those programs are susceptible to losing the ability to get federally subsidized loans. 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. 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. 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 four-year 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. 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. 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. With that backdrop, please join me in welcoming back for the third time on the Rant Podcast, Phil Hill.

Eloy: Phil, welcome back to the Rant Podcast.

Phil: Thank you. So I'm really looking forward to. By the way, I have to check how many other three-time guests have you had before? I'm checking for bragging rights.

Eloy: Well, I believe I've only had one other three-time guest. It might be Michael Crow. So you are definitely up there in the rarified air, Phil.

Phil: Well, tell Michael I'm coming for him next year.

Eloy: Well, as hard as he is to 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. I just want to begin with, I appreciate you always digging into issues surrounding the higher education marketplace, and in particular some of the most recent issues regarding the higher education accountability framework that recently got signed into law. But before we get started, how are you doing? What's keeping you up at night these days?

Phil: 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. With the negotiated rulemaking in just a couple weeks, it's interesting that there's a lot of interest now. There's a piece of me saying, "You should have been interested a while ago," but that is keeping me up. I also had written about the accessibility. Yeah, those issues are looming, and so the general thing that I think about a lot is: Are colleges and universities really ready for what's going to be hitting them in 2026? The general answer is no. So then the followup is: What progress are they going to make? Yeah, those are the big topics right now.

Eloy: Yes, it's definitely a big topic, and just hearing you talk about 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 referenced the Postsecondary Value Commission work.

And some of the other work that's been going on for a long time. This conversation about economic mobility, about adding another metric to what we would consider success at the post-secondary level, has been going on for quite some time. My hair was a lot darker when I served on the Postsecondary Value Commission. Thank you for this report that came out. Even back then, there were conversations about increasing the value, being concerned about the erosion and confidence in the value of a degree. This was at least 10 years ago; I lose track of time these days, but it feels like a million years ago that conversation was getting started. But I also reflect and think about how it felt in the early or mid-2000s—I'd say 2006, 2007, 2008—when conversations around completion were creeping into the conversation 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 be held accountable to one specific metric of completion. 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.

Phil: Sure, and I'll start out with the general concept. I'm in agreement that we've been talking about outcomes, completion, 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. Having said that, most of my criticisms have been on the chosen metrics, the way that we're planning to implement them. 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. 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 aged 25 through 34 within one state. That same metric, the Earnings Premium, got implemented by law with the OB3, One Big Beautiful Bill, and so now everybody's going to have to live with it. The difference is it's four years versus three, some minor differences. So what is 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. 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 going to have tons of unintended consequences. What I've written more about is the fact that the chosen metric, in the way it aggregates data, it might seem 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.

Eloy: You're always welcome in California, Phil.

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) or 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 MacAllen, Texas, and you see a program. My nominal income as a high school graduate, I'm going to make $20,000 somewhere, right? 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 median. The program I'm taking 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: 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, 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.

Eloy: Yeah, no, and I've certainly heard that argument in other circles. Part of the problem is the data that the federal government has to do this calculation. I think that's another part of this: 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? Is this college scorecard going to be there? 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 would fundamentally agree that the data is not great. Like you, I'm hopeful that this conversation can be had in negotiated rulemaking. I'm not going to hold my breath the way that rule....

Phil: Game. Right? Actually, if you don't mind me jumping in, there's a fundamental difference: Data available versus the chosen data for a metric. For example, on the geographic substate regions, capturing the income differences within a state, that data is available. It's actually available within the same datasets that the government's already accessing. So, the geographic area is simply a matter of they chose not to define it in a very sophisticated way. It's not a data availability issue. 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. 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 perfect) Data available and chosen data within the metric. There's a big gap. That's more what I'm interested in.

Eloy: I completely agree with that point. In my mind, it even goes one step further, which we're not at that step yet. 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 eventually get. When we did similar analysis in California, as you well know, we partnered with Michael Iskowitz from HA 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 on 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 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) are not designed to maximize Pell uptake for their low-income learners. 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. 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 us some thought.

Phil: Sure, and if you don't mind me adding just one other point, that's 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. 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 the definition of a professional degree so that students could borrow up to $200,000. And I heard that argument. 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.

Eloy: 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. Most people figured that out. Yes. But no, 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 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. This is part of what you're saying, and don't assume that it's caught up in polarization because it's a bipartisan move towards building. We'll jump into 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 the Big Beautiful Bill came about—I think the cool kids call it OB3.

Phil: OB3.

Eloy: Yes, yes, and that's why I don't call it OB3. But yes. But one thing that became clear was that this frustration with graduate student loan borrowing was bipartisan, cross-aisle. 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? 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. Nevertheless, based on what you're seeing, there are reports that come out every week about economic mobility, return on investment, programs of pay. The Georgetown Center on Education in the Workforce recently has come out with a few reports, most recently Baloria 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?

Phil: Well, I mean, I think 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 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 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, 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. I would point them out. And then also, going 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. Those are a couple that I would point out. 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. 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, "We better pay attention". That's part of the reason I'm really harping on the importance of what's about to happen. The long-term work you're mentioning that you've been involved in, I think it really changes next year.

Eloy: 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, we're in an era of negotiated rulemaking that's a little different than what it was in the past. 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. Institutions and their advocacy organizations better speak up now. I'd also point out I think there's something unique in that this was the Rise Committee that just concluded two weeks ago. That was only the second negotiated rulemaking in 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. 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, well, they definitely did, to strong-arm into a consensus. They used 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". 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 that we haven't been used to.

Phil: I certainly agree with that. Let's continue talking about federal policy and the most recent rulemaking regarding things graduate student loans, based upon what you've seen in the marketplace.

Eloy: Well, and let me take a step back. 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 we call professional fees on top of the usual tuition, so they were more expenses. 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 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?

Phil: I think it's going... well, cross-subsidies. That's what's going to take a hit. If you look at it on a program-by-program basis and argue about professional status, I think that's missing the big story. 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 noticed 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. 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, is not in there. So I think that's an example, the biggest example, why is this considered professional instead of this. 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, the board, their C-suite, the provost, 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? What's going to happen to our cross-subsidies?" Overall, from a personal standpoint, that's a good thing. We should be having these conversations.

Eloy: We should be having these conversations, and my fear—although I wouldn't characterize it a fear—it's going to be a natural reaction in addition to the things that you just mentioned. One, I think there'll be more pressure on deans to fundraise outside of 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 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, or are we going to see a lot more private financing schemes come up?

Phil: Concerns on how it's managed. Will it be like it was in the 2000s when 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, but I'm 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 is from the private source, but because the university is backing it, it can 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 2000s. Do I have a concern? Yes. But to be quite honest, I have a bigger concern if we did nothing about it. Not trying to be heartless, but it's a secondary concern. I think the bigger problem is, I think there should be downward pressure on the prices of these programs.

Eloy: Agree.

Phil: 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.

Eloy: I agree. I think if we rethink 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 EdTech marketplace. You spent a lot of time looking at online programs. While some of this other news has drowned out some of the other things that have been going on for quite some time, I want to focus a little bit of attention on what's happening with OPMs, Online Program Management companies. There was a shakeout about a year or two ago, all the concerns about 2U and some of the other OPMs. There was a lot of pressure put on them. I think there was a bit of a shakeout. Where do you see the OPM marketplace right now, and do you see that it's still under pressure from consumer advocacy groups?

Phil: 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 a market that's in the middle of an inflection point. 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 it. You have Coursera, who basically said, "Our OPM business, we're not pulling out of it, but we're not even going to separately report it, and we know that the revenue is going 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 one. That's not who I would have predicted 10 years ago—no offense to the leadership there—but I wouldn't have predicted that. Where you are now is a whole new market leader that has 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 in 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. And I'm waiting to see. I've been disappointed thus far on seeing revised strategies and models and strong bets. Who I do see that from, and who seems to be doing well, are the ones that we used to consider partial OPMs, on the fringe, like Collegus, Everspring, Education Dynamics, Archer—second-tier players. They seem to be the more nimble companies and doing better now. I don't know how that changes the big players like Rise Point, but I've seen more innovation there than I've seen in the mainline OPM space. So what I'm 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? It's a market that has not made the changes it needs to make yet, right? That is the way I would characterize it.

Eloy: Yeah, no, I would agree with that. Clearly, in my view, there still is demand for the services that OPMs 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 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 happening?

Phil: Well, 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". There's no two ways about it; that's how it was introduced. The Ohio Senate, it was almost like the adults came in the room and said, "No, we're going to take 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? I assume you like the way the Ohio bill was built?

Eloy: I do. My biggest issue is just the transparency. Just answer the fundamental questions. The learner should know who they're interacting with, and the public should know who's paying for what, particularly if it's a public institution. If it's a private institution, well, that's a different ballgame. But any public institution, there should be clarity and transparency, both for the sake of the college or the university, but also for the sake of the vendor, the partner. Those are my only issues, and I hope that this is something we can resolve because many, particularly public regional universities and a lot of the small privates, are really suffering right now, and they need a different strategy.

Phil: 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 agree there's demand, and I'm even seeing increasing demand once you throw Gen AI in the mix, right? 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.

Eloy: Agreed. 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, and we can talk about Gen AI. But that's for another episode, maybe after we survive the ASU GSV Summit, we'll come back and talk more about that.

Phil: Yeah, good, and I look forward to seeing you there.

Eloy: 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.

Phil: 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.

Eloy: All right, well, thanks for joining us, folks. You've been listening to my conversation with Phil Hill. Phil is 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.

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