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Welcome to the podcast. We call it TWICV. It is our effort to provide a fast-paced, entertaining, and alternative voice to the propaganda and hype flowing out of colleges in America today.
This week in College Viability is a proud affilate of The EdUP Experience podcast network.
Gary (00:01.568)
Welcome to another special episode of this week in college viability. Hi, my name is Gary Stocker. Today we're looking at financial aid kind of sorted. We have Robert Heil, who is a CEO of Financial Aid Services. Robert, welcome.
Robert Heil (00:18.646)
Good morning, Gary. Thank you. It's great to be here. Thanks for having me on.
Gary (00:22.556)
It's my pleasure and I love these conversations because we get a nice diverse look at higher education. Your business has its own nice little niche and really it's your business helps colleges remove the financial friction from student enrollment. Tell us about what Financial Aid Services does.
Robert Heil (00:39.936)
Yeah, friction's a great word for it. The colleges and universities that we work with are the ones that are making financial aid a strategic arm of their campus. And they're partnering with us usually to solve one of these four problems, maybe multiple of the four. The first is they're wanting to create a better enrollment management model. Use financial aid not just to drive more students, but to drive more graduates.
Students are going to be successful in retention and all the way through to graduation. Other clients, they're working with us because they're trying to create a better operating model. They're bringing their cost structures down. They're leveraging technology, streamlining processes. The third big challenge sometimes is creating a better student experience. And this is where I love your word friction because when you take today's generation of digital natives,
and you drop them into what can feel like a pretty antiquated financial aid process, you're going to get some friction. And so we're working with those clients to help remove the friction, create a much better student experience. And then the fourth big challenge is around compliance. 51 % of financial aid offices cite that they've got serious concerns being able to keep up with the constantly changing regulatory environment.
Gary (01:42.912)
Ha ha ha.
Robert Heil (02:05.196)
So we're working with them to give them that better peace of mind. So oftentimes it's a consulting relationship. In many cases, we come alongside them as a full operating partner, helping them solve one or all of those four challenges.
Gary (02:21.152)
So I noted with interest that the first thing you talked about was not just getting students into these colleges, but your focus was on driving more through to graduation. And I don't hear that very much from colleges in a functional sense. I both know, Robert, students pay a lot of money to get that college degree, yet data shows, sadly, data shows that fewer than 50 % get their degree in four years or less.
From your perspective, is it fair to compare graduation rates among colleges?
Robert Heil (02:57.31)
It's a good question. And I think this also gets to the heart of why we're watching these declining statistics, this declining perception in the public about the value of higher education. Because you do see students and parents looking around and they see a lot of former students that have not successfully completed college, but they're carrying an awful lot of student debt from it.
Gary (03:21.664)
Yeah.
Robert Heil (03:22.54)
And I think that is a contributing factor of why we're seeing that decline and the perceived value of higher education. You know, another example of this, and I think I learned about this from you on a previous conversation or an episode, but there was a report to the Federal Reserve, I think last summer, 2023. And that report from the economists to the Federal Reserve pointed out that college dropouts that also have student loan debt
Gary (03:40.236)
Yeah.
Robert Heil (03:51.584)
they were considered to be in the worst shape economically of any group, including those that never went to college in the first place. So that's where I feel like, Gary, for us as an industry to have a real meaningful conversation around college costs and student debt, we have to be also talking about graduation rates. And as your question points out, yes, those four year and six year graduation rates can vary quite a bit from institution to institution.
Gary (03:55.542)
Yeah.
Gary (04:20.741)
yeah.
Robert Heil (04:21.29)
So I think you can compare, but it also does require some context around the socioeconomic and the demographic characteristics of each of those colleges populations. within the same city, you may have one university that serves that traditional out of high school residential experience. And four miles down the road, there's another college that serves a very different profile. They are more of a commuter-based
Gary (04:46.762)
All
Robert Heil (04:48.95)
campus, maybe they excel at flexibility. And so you've got people going full time and then part time and it takes a little bit longer to graduate. So comparisons can have some value if there's also some context around that. then, you know, I would probably take it even one step further and say, you know, it's one thing to look at graduation rates from one campus to the next. But what may be more important is the specific graduation rate.
Gary (05:01.866)
Yeah, good point.
Robert Heil (05:17.942)
for the particular academic program that the student is interested in. And even within the same college or university, I'm sure you see this in your data, Gary, the graduation rates by program can vary an awful lot. so, students on the front end, I know are very concerned about acceptance rates. My advice often is, okay, once you get admitted though, put the same rigor to understanding graduation rates for the particular program.
Gary (05:22.475)
Yeah.
Robert Heil (05:46.348)
programs that you're considering and be able to ask questions. Is there a real viable path for me to graduate in four years? Because sometimes that's viable. There are some degree programs to where that's extremely difficult to pull off in four years and understand what kind of support services are available and what's the typical income levels for graduates. So students getting visibility and awareness around graduation rates at the program level, I think are particularly valuable.
Gary (06:15.372)
I know, of course, the work I do at College Viability focuses on financial health and viability for the most part. We have started looking and developed a prototype app this year for program completion. Now it's not graduation rate, it's number of programs. So if you have a low number of students taking journalism, you want to be careful about choosing that college. But it doesn't really get to the point of graduation rates by major. Take a look at that. That's a good point. So going back to finances.
Robert Heil (06:25.75)
Yeah.
Gary (06:40.452)
And you and your organization works with a lot of colleges, both public and private, I presume. How much of a college's low graduation rate, Robert, do you think, do you believe, is a result of weak financial position?
Robert Heil (06:46.294)
Yes.
Robert Heil (06:56.178)
It can be a contributing factor. I don't think it's inevitable that there has to be this foregone conclusion between well-resourced institutions and weaker financial institutions. And I guess I would come back. I'm a very pragmatic leader, but this is kind of one topic where I do get a little bit aspirational in that, Gary, isn't this the goal of higher education? To be able to take students from a wide variety of backgrounds.
Some have excellent starting points, others have more of an average starting point, but isn't that the goal of higher education is to be able to take students from all sorts of different starting points and be able to put them in an environment that's conducive to student success and ultimately graduation. So to say that those graduation rates just have to be inevitable based off the financial strength of the university, I think runs counter to what the whole goal of higher education should be now.
I'm saying that also realizing it's a complex challenge. There's a lot of different dimensions to it. So and, you know, from your data, Gary, you may know as better than anyone, you know, the kind of statistical correlation that exists between the financial health of the university and graduation rates. I would think there would be a fairly strong correlation between those two because the stronger financial institutions can certainly spend more per student around tutoring and
Gary (08:00.46)
For sure. For sure.
Robert Heil (08:25.982)
advising models, they can often provide more financial aid per student and the institutions that are under more financial strain, that's going to be more difficult to do. But there are a lot of examples that I see. There are examples within our client base of campuses that are innovating and they're breaking the mold on this. And a lot of those institutions have decided, you know what, Robert, we're going to divest in some other areas and get really focused again on our core.
which is all about students and all about helping students graduate. And I think that's where data can kind of be the great equalizer here. I know one of the former administrators at Georgia State here locally where I'm at, and they've had a tremendous track record of success being able to lift retention and graduation rates by leveraging big data and simply identifying the students that are most at risk, Pell eligible students, first gen students.
other high financial needs students, and before there's ever a problem, being very, very proactive in providing additional support services. So while the overall financial strength, I'm sure, is a factor and there's a correlation, I do think with a very deliberate focus and the right strategic investments, universities can break the mold, they can break the trend and see some noticeable improvements in graduation rates.
Gary (09:52.62)
Yeah, and yet we know Robert that those colleges whose students come in with high ACT or SAT scores, they're going to have a lot higher propensity to graduate just because they bring in that intellect across the board. If not, the graduation rates will be lower. So you and I can sit here and look at ACT scores, SAT scores, and somewhat predict which colleges are going to graduate 70 % and which colleges are going to graduate 40 % just based on those scores. But you just made a good point.
Students don't, in theory and in practice, students don't go to college to take courses. At the end of the day, they want that piece of paper that says, got 120 credits in whatever that case may be. And I agree, colleges have an obligation to do that whether I'm the student with modest ACT scores and you're the student with high ACT scores. We both want that piece of paper. And we in large part pay colleges, both of us pay whatever we pay.
Robert Heil (10:48.46)
Correct.
Gary (10:52.524)
To get the diploma, not the courses. I think you and I talked when we were preparing for the show, colleges focus each fall on how good their enrollment is. Those that have good enrollment, that's a small number. But rarely, Robert, do we see colleges with a 37 % four-year graduation rate on graduation day in mid-May.
shout from the mountaintops, we have a 37 percent graduation rate. And that's in part why I'm here. And I know you listen to some of my stuff and I'm grateful for that. But I am on that constantly. We're not paying for the courses. We're paying for the diplomas. If you can't get me a diploma, maybe I should go somewhere else. So I'll get off my soapbox now.
Robert Heil (11:36.662)
Ha ha.
Gary (11:39.02)
the expectations, the accountability for colleges. What are your thoughts on holding colleges more accountable in terms of Title IV funds to graduation rate percentages? Should there be an absolute minimum four-year graduation rate minimum threshold to get all or some percentage of those Title IV funds that most colleges rely on?
Robert Heil (12:02.944)
Yeah. I'll let the pundits and the policymakers debate that one. That will be a very fierce debate. I will say, Gary, to that question. I do think it's important for all of us in higher education to realize the climate is changing. And if you will, the compass is beginning to point a little bit more to where your question leads of that kind of level of accountability. I spent a lot of time in D.C. with policymakers, with
the major influencers in higher education. And it's interesting the conversations that I'm a part of because we all know, all your listeners know that, you know, we're in such a polarized political environment right now that the two parties can rarely agree on anything. But interestingly enough, the one rare area where there is beginning to be some general consensus is around college costs and the accountability around it.
Gary (12:48.684)
You
Robert Heil (13:02.048)
So it's both cost and the accountability. Now, both parties want to approach it in different ways, but both parties feel like something needs to be done and both parties seem to feel like they need to get directly involved. So it's interesting to me in this hyper polarized environment, higher education costs and accountability is a one rare issue where there's some consensus building. you know, I really...
Gary (13:20.266)
Yeah.
Robert Heil (13:28.958)
Real-time example of that is the way colleges and universities right now literally are preparing for the gainful employment and financial value transparency reporting that's due to the government January 15th. I got consultants all over the company working with colleges and universities figuring out how to prepare those reports because it's so new to colleges right now. But the primary goal is to protect students and the taxpayers from ensuring that these academic programs that students enroll in
Gary (13:48.34)
Yeah.
Robert Heil (13:58.878)
really do lead to graduation and a gainful employment. And it justifies the use of federal financial aid, like your question alludes to. So, you know, there's a debt to earnings ratio that they're going to calculate on each program. There's an earnings premium that they're going to evaluate. But, you know, for your listeners, I think the two major takeaways from that example are, first of all, the data is going to be made publicly available on a website.
Gary (14:27.244)
All right, bye.
Robert Heil (14:27.456)
So in addition to like what your organization provides, this will be another area of visibility. But then secondly, academic programs that don't meet the threshold, those universities will have to give warnings to their students. And if there's repeated misses on those thresholds, the Department of Education has said it may jeopardize or create a possible pause in the disbursement of their federal funds. So all that to say, the environment is shifting.
Gary (14:52.64)
Yeah.
Robert Heil (14:56.649)
And I do think higher ed leaders need to acknowledge that that climate is shifting, that students and families are expecting more transparency and accountability. But there's also some consensus building in DC that more needs to be done around accountability as well.
Gary (15:12.554)
Yeah, and even on the student part of that, I have a pay it forward effort I have with one of the private colleges here in the St. Louis area. And I work with two of the athletic teams. And in fact, I do podcasts for each of the coaches and each of their teams each week and they have an athlete on. And when they share with me, they want to major, or they are majoring in something of which I know the lifetime income will be modest.
there's really very little opportunity to say, well, be careful because exercise science. mean, if you don't know exercise science, God bless you, go get them. But recognize up front that your lifetime income earning from that major is going to be limited compared to something like web development or cybersecurity or nursing or medical laboratory science, those kinds of things. And that's a cultural hurdle because folks, you and I were 18, I can't remember that, but...
When we were 18, we made decisions that got us in the chairs that we're sitting in today. And neither of us, bet Robert, knew what kind of chair we would be sitting in those decades after we went to high school. But yeah, it's tough. was probably tough for us. And I know it's tough for the current 18, 19, 20 year olds for them to look ahead when they're 40, 50 years old and see and realize the decisions they're making now and the impact, the financial impact that we'll have in the future.
Robert Heil (16:30.571)
Mm-hmm.
Gary (16:33.844)
And I guess speaking of financial impact, again, that's what I focus on. And I've had this conversation, I've had this question with others and all public businesses, the stock market exists on this, all public businesses post quarterly financial statements. What are your thoughts on this evolving to be something that private and public colleges are required to do? And here's why, because if there is a company in trouble, the stockholders want to know.
whether to invest more to get out to change the board where the case may be. And I can make the argument the same thing exists for colleges. If a college is in financial trouble, the public, its stakeholders, its students, its faculty need to know what if there were in the coming years a requirement for a quarterly or bi-annual even, a financial statement to be posted to a website.
Robert Heil (17:25.292)
Yeah, that would spark another fierce debate, wouldn't it? Especially with some of the nonprofit status that colleges have and would they or should they be required to post that? Yeah, that larger issue of transparency really is an important theme, you know, and belongs in this conversation. So, you know, I talking about some of the shifting landscape in D.C. Students, parents.
Gary (17:28.328)
Hahaha
Robert Heil (17:53.024)
financial contributors to their education. Everyone seems to want more transparency around tuition pricing and how that tuition dollars are being allocated and endowment usage and the spending on student services and graduation rates. I guess I am encouraged that there are some mechanisms evolving that are creating a lot more transparency for students. I like what the group is doing called College Cost Transparency Initiative.
There's about 600 colleges that have joined this initiative and they're taking steps to provide what I would consider more radical transparency around the college costs, how they present their financial offers to students and parents. know, 600 is no number to take lightly, although I would encourage and challenge all my colleagues in higher education. Why wouldn't every college want to be on a list like that?
and be part of this kind of an initiative. But this is a nice start to the wave. One of my board members here at the company last week sent me a report from the American Enterprise Institute that I wasn't familiar with, but it was an interesting tool to where it stack ranks all the college presidents in the U.S. and during their presidential tenure, it tracks the improvement that they've made over access affordability.
and student success. And interestingly enough, the student success metric is calculated based off retention rates and graduation rates, like we're talking a lot about. So in addition to that, gainful employment, financial value transparency, regulations that we talked about, there are other movements in the industry that are shining a spotlight more on transparency around college costs, some of the viability that connects with that.
And I think anytime an industry or a business or an organization is facing an uphill battle, it has to start with transparency. know, once you shine a spotlight on the problem, then you can get down to root cause. Then you can have a meaningful conversation that helps come up with the solution. So whether posting their financial statements is the right mechanism or not, I guess I'm always going to be an advocate of transparency.
Robert Heil (20:19.54)
And I am more encouraged with what I've seen over the last 18 to 24 months of more mechanisms that create that kind of transparency.
Gary (20:26.932)
Yeah, interesting. Interesting, because even with whatever increased transparency exists, one of the challenges I find, and this may, you my children have long been through, long since been through college, but when families start to look at college, when their children are 17, 18 years old, they don't even take financial health into consideration. It's the same thing I looked at when I went to college, I looked at with my kids when they went to college, I'm guessing the same thing for you. It looks like the campus, the sports, the amenities, the majors, tuition, the faculty,
those kind of things. So even with the transparency initiatives or whatever they are, that I don't know yet, although I wonder, ponder about it all the time, when that trickles down to students so that they will look at a transparency report that says, be careful going to Stocker University because they have issues. You're okay to go out to Hile University because their finances are fine.
Robert Heil (21:20.468)
Right, right. Yeah, I think it's got to be a two way street. mean, I like mechanisms that provide this transparency, but maybe kind of where your comment takes us is I do think colleges and universities have a responsibility in this. And so even at our company at financial aid services, you know, a lot of where we're trying to help a financial aid office streamline their operations is to free up their staff to be able to have more of these kind of conversations with new and returning students.
of let's say, hey, let's fast forward. Let's look at, know, are you on track to graduate on time? Let's look at the incomes that you can expect after graduation. Let's compare and contrast that to the student loan debt that you're looking at. And I think colleges have to do our part in being intentional and proactive about having those kinds of conversations with students and parents. And that's talking their language.
I mean, that's the narrative. Those are the discussions I think we want to be having with more students and parents. And I'm a firm believer, Gary, that, again, I see it often. The colleges that will be a front runner on that and will step into that space, the market will reward them. And I'm not just talking with new students. That may be one way it manifests itself. But the market will reward not only that kind of transparency,
that colleges and universities that are putting that hyper focus on student success.
Gary (22:49.5)
Interesting, interesting. Well, let's wrap up the conversation with, I guess, a bigger topic on leadership. It kind of ties into a lot of things we've already talked about. I know, Robert, you have written and posted a lot about higher education leadership. And right off the top, the qualification is being a college president is a tough gig. You we used to tease about not letting your children grow up to be cowboys.
You gotta wonder if we should think about not letting your children grow up to be college presidents, because it's a tough gig. It's a ridiculously tough gig. We won't get into that. Are we getting to the point in your mind where talented leaders from whatever industry, from whatever spectrum may hesitate to take their skills and experience into the higher education industry?
Robert Heil (23:14.028)
You
Robert Heil (23:37.376)
Yeah, first of all, as a native Texan and as a son of a real cowboy, I appreciate the country Western music metaphor. Secondly, it's a very important conversation. I do think about this a lot. I want to have a voice in this part of the conversation. I don't know if we're talking about it enough in higher education. I agree with you wholeheartedly. I think leading a college or university may be the most complicated job in
Gary (23:46.688)
Ha ha.
Robert Heil (24:07.732)
And the reason I believe that is I don't know of any other entity that combines three organizations into one. Meaning a college and university has every facet of being a school and a business. And in many cases, they're the size of a small city feeding and providing housing for hundreds, if not thousands of students, faculty, staff that live there. So combining those three organizations into one creates enormous complexity.
There's going to be naturally conflicting goals and competing priorities. And we absolutely need our best thinkers. We need our best problem solvers and the most talented leaders taking on those challenges and stepping into those presidencies to tackle the challenges head on. On the flip side of this, unfortunately, you you and I both see the tenure of college presidents is on the decline.
I think we're just barely as six years now on average. It used to be a lot longer than that. And I would contend it's hard to drive major transformative change across so many areas of campus in a six year period of time. Now, I'm not saying higher education couldn't move a little faster than we do sometimes, but to drive transformational change across enrollment and fundraising and technology and
Gary (25:04.874)
Yeah. Yeah. Yeah.
Robert Heil (25:33.94)
academic excellence and research and learning outcomes, financial health. This is not something that just happens in a couple of short semesters. And I think unfortunately, sometimes boards, donors, other really influential stakeholders, you know, are often expecting that kind of transformation to happen in a pretty short window of time. And I've worked with enough presidents and boards to understand and I think better appreciate
Gary (25:54.784)
Yeah.
Robert Heil (26:03.798)
to really align all the strategies that this requires, to line up the financial investments. I think sometimes leaders underestimate the sequence that all this has to have in. And if you get the sequence off track, it can have some really negative cascading consequences. That takes some time to get it done right. I mean, college viability is your sweet spot. You would know this better than I do, but.
You know, it stands to reason if you get this sequencing that I'm talking about out of order, it only takes one or two missteps and you can quickly start negatively impacting college viability in a hurry. So, you know, I guess I am concerned about this next generation of leaders. You've got these declining presidential tenures, more presidents are outspoken about the pressures and the toll that it took on them. And you've got emerging leaders that are listening to all this.
Gary (26:42.676)
Yeah, yeah.
Robert Heil (26:59.54)
So I do hope, you know, boards, you know, can be very deliberate about creating environments that are conducive to success and the amount of runway that's needed for presidents to create transformational change. Because there's a lot of headwinds higher education faces and we do need our best leaders and problem solvers and the most talented leaders stepping into that space and taking on those challenges.
Gary (27:25.524)
And there are so, so many different stakeholders. I won't get into how many there are, but the number of stakeholders is just all over the place for college leaders to have to deal with. Well, let's do a wrap with this. Robert Heil, the CEO of Financial Aid Services, has been my guest today. Robert, interesting and fascinating perspectives. Your thoughts on college leadership in particular are interesting and make some good points. I appreciate you making time to join me today.
Robert Heil (27:50.272)
Yeah, glad to be part of the conversation. Thanks for having me on, Gary.
Gary (27:53.548)
And this is Gary Stocker with College Viability and we'll be back with our regular Monday podcast this week in College Viability next week. Thanks to all for listening. We are grateful.