Why Online Education Is Still a State-by-State Market

Transcript

Wes Smith (00:00.12)
Joining us today is Phil Hill from On Ed Tech. Phil, great to have you back.

Phil Hill (00:06.847)
Yep.

Phil Hill (00:18.345)
Yeah, it’s great to see you again. Always enjoy these conversations.

Wes Smith (00:22.146)
Yeah, these are interesting. This one’s a really interesting conversation to me. You’ve you’ve done some in-depth analysis on some NC SERA data. I kind of feel like a a a serious nerd right now saying that this is very interesting to me. And the the interesting thing is your in-depth analysis on NC SERA data. But forgive me for that. we there are there are there are dozens of dozens of us out there. So what what’s the key key takeaway to this data?

Phil Hill (00:46.571)
Hey guys.

Phil Hill (00:51.253)
Well, the key takeaway is first of all, this is a valuable resource. I mean, the fact that you have this state authorization reciprocity agreement and then the group collects this data and shares it, it’s a great community service. And as you look at it, you it makes it even more clear you don’t have an a single national online market. You have a bunch of state and regional markets.

And only a handful of players really span across all of the states. So the big takeaway is the fact that it’s valuable. And for any school that really wants to understand its position and where students are coming from and which states and who are you competing against, you can’t do better than this, than this data. And it’s important to think about your market. The second thing I would say, if you don’t mind me going on a little bit of a

Mini rant. California, for political reasons, never joined the reciprocity agreement. They did that. They wanted to maintain different consumer protection approaches. But one of the downsides of that is it’s a downside for the California institutions. California is not a member. Therefore, their institutions do not report data to NC SERA.

Wes Smith (01:48.81)
Yeah, please do. No, please do.

Phil Hill (02:15.561)
Yet their students, if they go to another school that’s out of state, that is reported. But that creates a blind spot. So one of the frustrating things is California institutions, public and private, would really benefit if that state would join. I don’t think they’re going to, but there’s it’s just ridiculous. And it does the opposite of helping consumer protection based on how they do it.

Wes Smith (03:32.877)
We have some we have some indicating data on students from California that go to other institutions that are out of state, but we don’t have the same richness of data for those California students who stay in state. Is that right?

Phil Hill (03:50.42)
Yeah, that’s correct. And so what I did is I didn’t want to have a complete blind spot for California institutions because they are so important. So in the case for those institutions, I substituted the iPads distance enrollment data. The problem is for out of state students taking online programs in California institutions, we don’t know which state they came from. All we can say is they’re out of state.

Wes Smith (04:16.392)
yeah. Yeah, okay.

Phil Hill (04:19.955)
So it’s a partial blind spot by the way that I combine the data.

Wes Smith (04:25.409)
You’ve done your best to overcome it, but there’s still some data that’s lacking there. Got it, got it. Okay, that makes sense. especially for our California listeners. If they’re if they want to listen and evaluate your analysis, they’ve gotta remember it’s a caveat that that’s the one thing you can’t tell.

Phil Hill (04:29.183)
That’s that’s correct. Yeah.

Phil Hill (04:39.517)
Yeah, and I th I’m the only one that I know of who’s sort of combined these two approaches so it’s not an either or, so hopefully it’s valuable for them.

Wes Smith (04:47.339)
Right, right. Okay. Well, so describe the the three categories of states that that you’ve put together. I I know that I know that you’ve done a lot of work on that, and you have strategic out-of-state targets, you’ve got retention states, and you’ve got leakage states, but explain to our audience what that means and how you’ve how how you’ve categorized them.

Phil Hill (05:08.879)
And I should probably describe it the way I’ve categorized it is sort of a public policy type of view, where that a lot of state policymakers and schools in states, you don’t like to see your students going to programs out of state, at least too much. Why aren’t we serving our own residents? You take that argument. So that’s sort of the basis of it.

And if you do that, you get one group who in Arizona, where I live, is a good example. Is you have multiple in-state institutions who offer online programs, you know, the Arizona State, the University of Phoenix, all of these, but you’re serving your own residents. They have plenty of online options within that state. You have big states, California, Florida, Texas in particular.

That are so big and concentrated, that’s the target states. So if you have an online program, you would love to get California students and Texas students because it’s just such a big source. That makes those states quite competitive or the competition for those students. And then a third is the other side of it saying leakage states.

Wes Smith (06:23.351)
Okay.

Phil Hill (06:28.415)
These are states that for public policy or various reasons, they just don’t have a whole lot of online programs available for their own residents. And therefore a large percentage go out of state. And the one that I had in the original post that you referred to was the state of Washington. So look at just how big Western governors is within the state of Washington.

Now there’s historical reasons for that. That was one of the earliest universities using Western governors, and it was almost like a flagship state presence for them. But so you have different types of states, and it very much points back to state policy and the schools and how competitive they are within there. So you have different markets, but you have different types of state policies as well.

Wes Smith (07:23.799)
Well, at the president’s forum, we just have s you know, a lot of institutions who who have, you know, this online capability. And they’re operating in multiple states. Some of them are, you know, we have California based that that have a lot of you know in state possibilities, but also national. you know, you mentioned WGU and SNHU out there with national presence. What this this

Phil Hill (07:33.472)
Yes.

Wes Smith (07:53.632)
analysis that you’ve done, what kind of of an impact do you think it should be having on these institutions? What what should presence form institutions be looking for in this data?

Phil Hill (08:07.871)
Well, hopefully I’ve made the data digestible and more easily available. So it’s not just individual business analysts within your institutions who get what’s happening. So you have a wider ability to see the data. And you start seeing things such as if we want to be competitive for this mention Washington, well then which schools are already serving Washington State students? Where are they already going? So who is our

Actual competition. Texas, highly competitive as well. So if you’re trying to serve Texas students as a target market, whether you’re in state or out of state, the biggest thing to say is how am I doing? Who are my I use the word competitors, but where are students already choosing to go? And therefore, try to better understand the decisions that students have.

Wes Smith (08:57.708)
Mm-hmm.

Phil Hill (09:04.117)
Who are they trying to think of when they for those who want an online program? What are my choices? And quickly realize it’s not going to be the same answer in Arkansas that it’s going to be in Michigan or Arizona or somewhere else. It’s very localized. So you need to be able to, if this is our market and here’s where we’re going, for these students who are, what are their choices really? That’s what I’m trying to make it easier to understand.

With this analysis.

Wes Smith (09:35.82)
Right. Well, okay. So now flip it to a state policymaker. So we clearly there’s a reason that institutions want to understand what’s going on in each state, especially the states that that they have a where they have a lot of students or they seek to have a lot of students. But for a policymaker from any given state, what does this information help them do?

Phil Hill (10:02.229)
Hopefully it gets out of get them past the initial shallow level of understanding. And maybe that doesn’t sound right, but what I hear so often at state policy level is we can’t keep sending our students to southern New Hampshire. We need to serve our own residents and some of our investments. Well, you need to go beyond that. You know, is it really southern New Hampshire? Is it Liberty Is it, you know.

University of Maryland Global Campus, how many students are doing this. So it’s basically for state policy. It’s again to go past the surface level understanding, but it’s true, it it should sort of inform do we need to invest more? That’s where I’ve heard people using this already. Hey, I love these charts. I want to take it to the legislature when we’re arguing for money.

And here’s why should we should be serving these students. We shouldn’t just be quote unquote sending them out of states. So it’s in that debate about how much do you invest and try to serve these residents where that type of where the data should be valuable.

Wes Smith (11:13.677)
So, Phil, I know you’ve been around this for a long time in this ed tech world. And so now I’ve got a question. it’s it’s I think sophisticated state policymakers would probably ask this question, and that is it takes a lot to create an in-state option that could compete with some of these programs who have been working on this for decades now. it is is that

Phil Hill (11:37.866)
Yes.

Wes Smith (11:40.894)
Does your would your data show that that is accurate? Number one. And number two, is it worth the investment for a state to have an option to compete with with other options that are have been at this for a really long time and have have kind of, you know, they’ve they smoothed out the process for students? Tell me what you think about that.

Phil Hill (12:06.011)
well, the data does go back to 2015. So you have a historical basis and you could look at any institution and say, when did they start? And yes, the big national brands, you’re going to find the answer was in the 2000s, most likely, or early 2010s, or with some of them back in the 1990s. But what would I do as a state policy maker? I would say the choice is not a binary, do we go for.

online students nationwide. You probably miss that bus just from a if you build it, they will come mentality. What you have the opportunity is to say, we know our local workforce. We know this specialization is what we really need for not only our students, but also for our local workforce. And we can serve our students better because we know them and and we’re right here. So specialization

And you know, thinking of what makes us unique, and part of that uniqueness is your local workforce and how to how to serve them. That’s where the opportunity is. So can you still get into the national market, if you will? Yes, you better be patient. Yes, it’s possible, but there’s a lot more opportunity to target specific programs and specific strengths of your college or university.

system, if you will.

Wes Smith (13:36.632)
So I I mean one of the big takeaways for me in in this conversation and based on, you know, your analysis is it it really is it’s not as clear cut of a national conversation as most people believe. It it is very much driven by regional markets or even state level markets.

And if you’re not playing at the state level and understanding the dynamics there, you’re probably missing a lot on this. Is that is that what you ended up with?

Phil Hill (14:10.571)
Yeah, I yes, that that is definitely the way to interpret it. And it is interesting looking at the data. Although you’ve self-identified, you’re a data nerd, so you naturally look at this, but there’s a pretty rich story about each of the individual states and where students are, and usually when you look at it.

You’re able to start saying, look at that school in this position. I remember that was a decision that was made in 2012. And so it starts to tie in historical decisions as well as you look at it. but yeah, as I said, it’s not a binary decision, it’s which students.

Wes Smith (14:52.951)
Phil, give us an example of that, of of something that you can look back to and see the history and that’s why this th these numbers look the way they do.

Phil Hill (15:02.761)
Well, I mentioned state of Washington. Early on, they didn’t it’s not just that Western governors set up an online presence in Washington. The state encouraged it. This is our approach to online education. And that really ramped up Western governors in that state. So so that’s one example. You have states such as Arkansas, where they, you know, combining their e versity and then they acquired Grantham University and

Wes Smith (15:22.111)
in Washington. Okay.

Phil Hill (15:32.572)
The state system is really trying to serve students more. That’s another decision that you start to see in the data. Now that’s more recent, but you definitely see that in the data as well. And I guess another one, the global campuses like UMass Global, they now the that was an example where they came out saying we can’t keep sending our students to southern New Hampshire. And I think initially they might have been.

too much of a it’s us versus them. But as the programs developed, I think they’re starting to see some changes in how the students are actually getting served. But it’s those types of decisions that you see. One other that I’ll mention, again, coming from Arizona, there’s an HR component to it. This is almost Silicon Valley for online education. So you have so many people who work in this area, that’s where you’ve had

A Arizona State, University of Phoenix, Grand Canyon University, Rio Salado, now University of Arizona Global Campus, which is now University of Arizona, but they’re all co located. And so this is a unique state because you have so many providers here right in the same area. And you get a unique thing.

Wes Smith (16:50.507)
That’s one thing that popped when I was looking at the data is that Arizona is, you know, just I mean, it’s the national leader with regard to online education. There’s it’s it’s hard to debate that any other state has an you know, anywhere near the type of influence that that Arizona does.

Phil Hill (17:06.983)
And the range of providers offering different programs coming from Arizona. Yeah, that is quite unique.

Wes Smith (17:14.463)
Right. You know, New Hampshire has one and Utah has one. And so you get you get the idea that Arizona has you know half a dozen that are come that have come together to provide this and it shows up in the data.

Phil Hill (17:18.227)
Yes.

Phil Hill (17:28.393)
Yeah. And and this goes, by the way, it goes back to my mini rant about California. California institutions, I bet they would love to be able to see this which state students are going where and how do we stack up. So that’s part of the reason there’s a lot of schools in California who are doing online. They would do a lot better if they had better visibility into this.

Wes Smith (17:51.125)
Yeah. Yeah, absolutely. Well, Phil, this has been very interesting, super clear and useful data. We appreciate you taking the time to come and talk to us about it. We’ll we’ll of course link your article in the show notes. Where can our listeners find more information about this if they’re just, you know, looking for it?

Phil Hill (18:10.751)
Well, the on ed tech newsletter is a short answer, but I will point out that I’ve actually recently for premium subscribers to the on ed tech newsletter, on ed tech plus, I’ve actually created a enrollment an enrollment data tool that’s interactive that’s available. So the NC SERA data, the iPads distance enrollment data, you can do your own filtering and sorting and even pick.

Let me look at my school and my peers and see how they compare. So it’s on ed tech, but in particular, the pr there’s now a premium version that’s a data explorer that you could get a lot more out of this.

Wes Smith (18:52.481)
Fantastic. Fantastic. Okay. Well we’ll we’ll send our our listeners to on ed tech to to check this out. And Phil, we look forward to having you back on the show very shortly, I’m sure.

Phil Hill (19:04.841)
Yeah. Well great. I enjoyed this as always.

Wes Smith (19:07.714)
Thanks, Phil.