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Rep. Speier and Sen. Carper attack GI BIll Benefits

On February 15, 2012, Rep. Speier (D-California), and Sen. Carper (D-Delaware) introduced a bill that would rework how GI BIll benefits would be counted under the 90/10 rules within the for-profit sector.

The 90/10 rule was meant to limit for-profit schools from getting all of their income from the Federal government in the form of Title IV loans. The unfortunate outcome was that some schools signed on a lot of students who didn’t do well academically and dropped out. Since they took federal student loans they were not able to default on the loan and became saddled with debt and no degree.

The 90/10 rule was aimed at making sure the for-profit sector would raise academic standards and become less reliant on federal student loans. One of the ways to help that 90/10 ratio was to bring on more military students with GI Bill benefits.

With this new bill by Rep. Speier and Sen. Carper, the GI Bill Benefits would be lumped in with the Federal student loan amounts. This has some unfortunate side effects for the education industry and for the the schools themselves.

  1. The for-profit growth rates will be further cut due to a loss of a very strong audience. This will negatively affect the stock prices for the publicly traded schools long term.
  2. The veterans themselves may not be accepted to certain schools depending on their financial situation. This limits the veteran’s educational choices. Online education is a great path for military members since their curriculum can be delivered anywhere. The curriculum is also flexible for members who are on active duty or have to go for deployment. Veterans need these options.
  3. GI Bill benefits are earned through military service. They do not have to be paid back and are not considered to be “loans.” Lumping them into the loan category is misleading. Are they federal funds? Yes, but we gained valuable protection for our country from these individuals. We owe it to them to give them as many educational choices as possible.

If you oppose this bill, please write to your local representative or senator. If you want to contact Rep. Speier directly, you can call her at (202) 225-3531. You can contact Sen. Carper at 202-224-2441.

Apples iBooks2 impact on online education

Apple announced on January 18th that the are introducing iBooks2 for the iPad.

This announcement albeit small in nature has massive impacts for several reasons.

1) It attacks a traditional industry – book publishing head on. People have been reading books on e-readers for a while now but the content has just been migrated from paper. Very few books have taken advantage of the processor features which can play video, sound, and be interactive. The only books which have really taken advantage of this are children’s books and they have been massively successful as learning tools.

The impact on the publishing industry is going to be swift. You may see publishers go out of business within 2-5 years and some will try to refocus on other types of content. For the authors, I fear that their profits may suffer short term, but long term if books are cheaper, people should buy more of them, unless piracy comes into play.

2) The lines between “app” and web are starting to be blurred through the use of HTML5. I am excited to see how the use of iBooks will actually boost the usage of HTML5 on the web and make content faster, more interactive and easier to build. Once this starts bleeding over into the TV realm, you are going to see some amazingly interactive TV shows with a much higher level of stickiness. Overall, this should increase ad rates long term.

3) A new audience for learning will be opened up. iPads and tablets have a certain magic about them with older adults and young kids. They are easy to approach and use. As tablet sales go up, you will see more and more seniors online and more baby boomers come online.  This new audience will open up a whole new realm of teachers and learners for both the traditional schools and for profit universities.  In reality everyone loves to learn things they are passionate about. I can see millions of life long learners coming online and sharing their learnings with other learners via the iPad or any tablet for that matter.  Think of it like a socially interactive Wikipedia or the laymens version of a MOOC.

From a marketing perspective, this new platform will be a massive lead generation environment. Imagine a user reading a book about psychology and all of a sudden, you have the ability to show them that there are 2 schools teaching this exact book within 25 miles and 1 school teaching this book online. If I were the reader, I would be pretty interested in finding out if I should make my interest a real degree.

However, as much as I would like to see this as a marketing platform, there is reason to believe that people will have voracious appetites for free content but stay away from environments that require testing or loans. Time will tell…

4) Keep an eye out for the mad rush to create books – even if they are 5 pages long, as teasers.

5) Now this iBooks platform may have a negative impact on online schools in the short term. Even though most of the schools offer a curriculum that is designed to be taken on a computer, few have optimized their learning for iPads and the on-the-go lifestyle of many folks. I would love to see schools start to create tablet based learning environments and use that as a marketing tool. EG – Learn Psychology on your iPad and get a degree from X school. That would have an awesome Click Through Rate.

If I had to make a recommendation to folks reading this, I would say do the following:

a) Try a children’s iBook to understand the potential of this platform.  Give it to a kid and see how effortlessly they adapt and interact with it. Then give the same kid a newspaper and see what happens. Key thing to measure is how much time they interact with each and the amount they retain from each.

b) Learn more about HTML5! It is tremendously important! Just knowing what it is capable of helps you understand how vast this platform can be.

c) Take a look at your own content – what can be made into an iBook? Remember, books are not books anymore. They are full on 3 sense experiences. Seeing, hearing, touching.

Schools not working leads?

Leads360 recently published a white paper entitled “Failing grades: Evaluating admissions processes at for-profit schools.”

The data in the report is shocking. It states most of the schools in the for profit sector are just not working their leads efficiently at all.

Here are some key findings:

  • Most schools did not follow best practices when sending out emails or calling back in a timely fashion
  • Some schools called leads too often, up to 82 times.
  • Some schools took too long to make first contact, allowing for the lead to become cold.
  • Optimizing process can greatly reduce waste.
Being a vendor in the education space for many years I often wondered what really happened to all of the leads that were being sent into the schools. These days all you hear are stories about the leads being over marketed to, when the real story is that most leads are not being marketed to enough.
How does this affect the industry from an economic perspective?
If you look at this from a macro perspective. If leads are universally being worked inefficiently, lead prices will remain low since the overall quality is always low.
Even though EDU has been hit hard with regulation, new competition continues to come into the market, continually pushing media prices higher. This in essence means that the vendor side of the industry is being squeezed on margin because the costs are going up and revenue is staying stable if not declining.
For the schools, several of them have cited lower growth in their quarterly reports due to massive changes in how they handle leads and the enrollment process. They changed compensation plans, and they also changed scripts to make them more compliant with the DOE regulations. What this has lead to is a focus on the process after a student is on the phone and perhaps taken a bit of attention away from actually getting the user on the phone first.
If enrollment rates and growth forecasts are dropping, it seems to make sense to look at the entire process rather than isolate one component.  I think there are lots of things that can be done to optimize the process flow at the for-profit schools. One of them is using better lead management and routing tools like Leads360. Outside of a technology solution, I think it makes sense to also have new funnel metrics for the vendors to help them enhance leads by setting expectations. I for one know a lot of vendors would love to have insight into how their leads are being worked and if they can enhance the process. For the most part the vendors do want to help or better understand the process. A more collaborative environment will make marketing more efficient but also more ethical in the long run.
There are a few considerations one should take into account when reading the Leads360 report too. They mentioned a school like AIU does not send out any emails. This could simply be part of their strategy. I suspect this was highly analytics driven a while ago and needs to be re-evaluated since the market has changed so much in the past 18 months.
The other part of this equation is that, we should ask more about what the consumer wants. Email and phone are somewhat old mediums of communication these days. Perhaps people want to be contacted on Facebook, Twitter or through IM? The Millenial generation is going to start demanding these new paths. It will be up to the advertisers to keep pace with their audience and develop new best practices. EG – what is the optimal number of times you can SMS a person before getting them on a phone call? What is the social etiquette about contacting someone on Facebook or Linkedin and how does that relate to advertising? How does a brand get invited into a user’s inner circle online?