S1:E17 Ryan Craig: Deliver what students and employers need

Tyler Jacobson  0:01 

Welcome to LabChats, a podcast from the team at LabStats. I’m Tyler Jacobson, your host for today’s episode. Each week we’ll sit down with technology leaders in higher education to get the latest buzz and insights while we discuss current events, trends, problems and solutions. Now let’s get into it. Today we are joined by Ryan Craig. He’s the author of “College Disrupted” and “A New U: Faster + Cheaper Alternatives to College”. Ryan, give us a little bit more background on your experience, as well as introduce yourself and your mission. 

Ryan Craig  0:35 

Sure, I am a[n] investor. That’s my day job. I run one of the largest private equity firms in the education space and increasingly at the intersection of education and workforce, helping make the connection between people and jobs. My background is in higher education. I started my career working at Columbia University and went from there to investing full time at Warburg Pincus. [I] founded some companies and have had my own investment firm now for about a decade. So we invest in companies that are: tech companies, coding boot camps, new and different pathways to employment opportunities that involve education and training apprenticeship programs. So that’s where we’re focused.

Tyler Jacobson  1:23

With that focus on education investment, that means you’re pretty passionate about making sure that education is as good as quality of product as possible. And one of the articles that we read that you have written was about romanticizing failing colleges. So I wanted to have you kind of give an overview there, what are you using as your basis to indicate that a college is failing? As well as just give me your general premise.

Ryan Craig  1:51

Yeah, so that was an article I wrote a few months ago. The idea here is that when a company fails, then oftentimes the coverage of it is: “Oh, they had a bad product, you know, good riddance,” and the hubris of the investors who thought that they could do this. But when a college fails, and there are lots of them out there that are seeing declining enrollments, the whole attitude is really one more veiled in style, Jeff, and because you know, that college probably looks a lot like the college that you went to. And how sad is it that the college is failing? But let me tell you, the college is failing because they’re offering a bad product. They’re offering a product that they’re either charging too much for, or that isn’t graduating enough students, and that probably isn’t helping them find good jobs as a result. So that’s why students don’t want to enroll in that college. You know, it’s true when colleges go out of business that their faculty and staff lose jobs. But that’s true with companies too, when they fail, and that’s the sort of market capitalism that we have. And so we shouldn’t be nostalgic about romanticizing failing colleges. Failing colleges are failing for a reason and they should fail. And we should build better post secondary pathways and new alternatives, new pathways to employment on top of them and make those available to students. Last thing you want to do for a young person or an older worker who is seeking upskilling, or retraining is to send them to a failing column.

Tyler Jacobson  3:29

Is that primarily the metric that you’re basing the word failure on is the ability to get a job? And is that the primary endpoint that you think we should be [focusing on]?

Ryan Craig  3:38

Yeah, that is the single biggest change in American higher education. When I went to college, if you’d surveyed those of us who were entering college in 1990, probably about half of us would have said, “Well, we’re enrolling in college, and the main reason is to get a job or get a good job or get a better job.” The other half would say the whole wide range of reasons why you were doing it. [Then] 30 years later: huge tuition increases, student loan debt, the Great Recession, the digital transformation of the economy, and the fact that colleges have not come close to keeping up with the digital transformation of the economy. Today, if you survey young people who are matriculating into a college or university or older workers who are going to try to go back to school and you ask them why they’re doing it, north of 90% say, “It’s about the job. I’m literally trying to do this for the job.” And so that’s the challenge. If you talk to colleges and universities, though, most of them don’t recognize that. You talk to the department chairs and faculty who decide what courses and programs to run. That’s not what they’re focused on there. They want to continue to teach what they’re interested in and where their area of research is, which is nice, but it’s hard to do that and continue to charge $40,000, $50,000, $60,000 in tuition a year and ask students to take on in some cases six figures of student loan debt in order to get a degree. The job that you’re going to get with that degree just is not going to support that level of debt. And that means that students are not going to enroll in that school and the schools will fail. So, yeah, it is about the job. And then let me add one thing, colleges and universities will say, “Well, we prepare students for their fifth job, not their first job,” right? Meaning that if you prepare them with the cognitive skills and critical thinking skills, they’re going to need to be successful in the long run. But we know now, this is from research that you know, two years ago from Strada Education Network and Burning Glass [Technologies], we know now if you don’t get a good first job, you’re underemployed in your first job. Two-thirds of the time, you’ll be underemployed five years later, half the time you’ll be underemployed a decade later. Which makes sense, right? Because careers are path dependent. Your second, your third employer, they’re gonna care a lot about what your first job was, probably more about that than where you went to college, or what you studied, or even whether you went to college, in many cases. So that’s sort of what we’re dealing with; colleges and universities haven’t caught up with what I call the ’employment imperative’, which now governs American higher education. At all but, you know, again, you can exempt the top 50 schools, which is 5% of the all students, right, if you’re going to a brand name school, that Ivy League school, or UCLA, or Berkeley, or University of Chicago or Northwestern, this doesn’t apply. But that’s 5% of the market. So I’m talking about the other 95% you’re enrolling in the schools because they want to get a good job, or they want to get a better job.

Tyler Jacobson

So how do we hold them accountable to making that more of a focus of preparing them for the workforce, and there’s accountability? And the second part is what do they need to change to adjust? 

Ryan Craig

Well, they’re not going to be accountable until they see their enrollment declining, and enrollments not going to decline, in my view, until we have a large supply of faster and cheaper pathways to good jobs. Which is what our firm is trying to build; we’re trying to launch apprenticeship programs across the economy, in areas like cybersecurity and software development, and Salesforce and healthcare IT and so forth, where, you can imagine as a high school graduate, presented with the option of taking on six figures of student loan debt for a shot of getting a degree and a shot at getting a job versus a paid apprenticeship pathway from day one, where in six months, you’ll be actually doing real work for a real company and being paid. At the same time recognizing that that’s not all she wrote, in terms of your post secondary education, you are going to need to develop those critical thinking skills, cognitive skills, communication skills, but you’ll have your first foot on the first rung of a career ladder [with] no student loan debt. And after a couple years, we’ll be able to look around and ascertain what secondary or tertiary pathway you’ll want to pursue in order to gain those skills. That’s a much better place to be. And if you think about it, that’s sort of the way we do things now across the broader economy, right? For example, companies don’t buy huge enterprise software licenses to install them. We kind of buy what we need when we need it, using SaaS platforms. And the same is gonna happen in post secondary education. We’re gonna get what we need when we need it. And given that most good jobs now are digital jobs. And most digital jobs, your entry