Podcast Transcript: Where Does Online Education Go From Here?

Online education expert Joe Sallustio explains to host Daniel Barwick that the pandemic will only accelerate the demolition of the theoretical, psychological, and practical barriers to online education. This transcript has been edited for length and clarity.

Joe Sallustio

Dan:    My guest today is one of our nation’s foremost online higher education experts, Dr. Joe Sallustio, who for the past two decades has led a broad range of educational institutions, including both nonprofit and for-profit online universities. Joe received his EdD in organizational leadership from North Central University. He also holds a master’s in organizational leadership from Regis University and a BS in speech communications from the State University of New York College at Oneonta. Joe, welcome to the podcast.

Joe:     Thank you. It’s an honor to be here. I appreciate it.

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Dan:    As I summarized in the intro, you’ve got an extensive background in online higher education. Please tell us about that.

Joe:     Thanks for the question. Yeah, it’s about 20 years into higher education now, and interestingly have gone all the way through both for-profit and nonprofit sectors in that 20 years working for nationally-accredited for-profit, on to a regionally-accredited for-profit institution that had 42 campuses across the US, and then now on to a small nonprofit university that’s regionally accredited. So seeing the gamut of higher education models operations, the best and worst of both worlds, and try to take all the best of all those worlds and put them all together in my new environment.

Dan:    On previous podcasts and on my YouTube channel, I’ve reviewed what we know about the current impact of the coronavirus on online enrollment, which is up, although modestly. How do you interpret the increase and where do you see it going from here?

Joe:     I think the increase is circumstantial, in that I think there are, particularly at the graduate level, institutions that are seeing an increase, a lot of them are seeing it at the graduate level. You’ve got a lot of professionals working from home who have the extra time now to invest in online education. And so I think that’s where that increase is coming from. I don’t want to say it’ll be short-lived, because I think this work-from-home environment that we’re in now will take it’s time to go away. I think people want to return to work, but I just think that it’s going to be variable, right? They’re going to see hybrid models, two days in the office, three days out, and that’s when a vaccine comes, which hasn’t even reared its head yet in a way that’s of any substance at this point. I think that there is also a void of colleges and universities really understanding the competition. I think we’ve seen enrollment go up, and it’s gone up on its own without a lot of true investment in online marketing and interest generation. It’s different now – Dan, you know this – a regional institution that relied on a 50-mile radius for students to enroll in their programs because that’s what you do in this regional area; those days are over. That student can go to XYZ university online now, on the other side of the country, and doesn’t even have to think twice about it. So I think enrollment increases, modest ones, will continue for institutions that know how to differentiate specifically when it comes to the marketing infrastructure.

Dan:    How do you think the gradual increase in online education is affecting the entire higher education sector?

Joe:     That’s a really good question. I think it’s going to take a little while to see how that shakes out. From a financial perspective and administrative perspective, I think that for institutions that have been rolling on-ground for their entirety or the majority of their institutional life up to this point, have understood the expense output with buildings and dorms and food and all those things. And now you move to an online environment and your expense structure entirely changes.

Dan:    Right, the equation seems completely different.

Joe:     It is completely different. And now you’re certainly going to have people that want to go back to an on-ground environment, but it’s going to be hard to take a CFO off of their desk and say, “Hey, look, we’re going to just incur this level of expense we’re used to, even though we’ve seen efficiency shoot up by 20%.” So I think that it’s going to be –again, it’s a variable – I think institutions who are really starting to enjoy a nicer, I’m gonna say it that way, a nicer expense structure and probably better margins on their programs. It’s going to be hard to, to just shoot that out the window and go back to a structure of heavy costs. So I think that in the long run what’s going to happen is we’re going to see institutions that are now running online programs efficiently stick with that, at least at some level. Whether it’s hybrid, it’s offering it as a choice to students, think about a student perspective. What if I want to do one class online, two classes on ground, and one half and half this semester. Shouldn’t I be able to do that if the infrastructure is there? It’s going to put institutions with a burden to offer a menu, but at the same time, giving them an opportunity to really understand a more moderate cost structure.

Dan:    If you look into your crystal ball, you know, how do you see traditional higher education being affected in the mid-term, say the next five to 10 years?

Joe:     I think the consumer is going to be the one that leads that change. And that’s the big question that I have, and the answer is, I don’t know. I don’t think anybody really, truly does. I think there’s going to be a slimming of options, elite institutions that have always operated on-ground or whatever your definition of elite is. I like to say it’s an institution that has a billion-dollar endowment or a couple of billion dollars – they’re going to be fine because the money is there. Institutions that have a primarily an online infrastructure, that don’t have a lot of fixed fees, physical costs, are probably going to be okay. It’s the middle that you’re worried about, it’s those 1,000 to 5,000 student institutions that have liberal arts, typically run on-ground, they are going to have trouble in the long-term. So when you talk to some of the folks out there that are in the MNA space, you know, consortium agreements are on the rise right now, or at least for an exploration point of view synthetic mergers, shared services, agreements, all of those financial models that allow you to have an umbrella absorb some of your costs specifically in the faculty area. Shared faculty is going to be the biggest expense. If you can do that, you have a chance to survive. But the independent institution is the one that’s in the most trouble, five to 10 years from now, without some type of meaningful partnership that allows it to survive.

Dan:    You talked about the student driving any change. I’m curious – that’s a good segue into my next question. How does marketing an online school or a program differ from what a traditional campus does to promote itself?

Dan:    Ah, there you have it – my favorite and probably the most important question for higher education, in my opinion. I think, Dan, what’s going to happen is the institution right now that has operated on-ground that has now moved online, it’s going to take them a year, year and a half, to figure out whether they can compete in the online marketing space. It is vastly different. There are some similarities, but it’s vastly different. Here’s going to be the biggest difference: If you live in Southern California, and you think about going to an on-ground institution, or you think about going to the institutions in this area, there are many, you’re thinking UCLA and USC, and there’s other ones out there that are the big brand-name universities that you would come to expect and think about. But again, let’s just say as an example the University of Florida dumps tons of money into marketing in California to try to pluck those students out of here, because they now have online programs, when they would have typically spent that money all in Florida. So first of all, you’re going to have cross-state types of competition. Two, you’re going to see really forward-thinking institutions communicate their differentiation on another level, because it’s going to be that niche marketing differentiation that is going to help survive and thrive right now. So online marketing is going to be really interesting because it is not the same. There are no bus stops advertising things when it comes to online advertising, there’s no undergraduate fairs to be had on-ground and going in and talking to somebody one-on-one. You need to get that student where they are, and where they are is at home on their screens. So it’s a totally different type of marketing.

Dan:    On the last podcast, we had Ian Bogost from Georgia Tech, who published a fascinating article in The Atlantic that was very well-received, where he basically said that there’s sort of this huge mistake going on in higher education that is actually driving everyone’s dissatisfaction during the pandemic. That mistake is that we think that the primary product offered by higher education is education, and actually, it’s this sort of “college experience” which is a much more expensive thing to provide and requires in-person access to students. I’m curious – when online schools market themselves, I assume they’re conscious of the sheer number of students that sort of envisioned themselves being physically present on a campus and having that sort of classic coming-of-age college experience. How do you overcome that? Can you overcome that?

Joe:     I don’t know if I totally agree with the statement. First of all, I think the college experience is definitely part of the sale the allure of going to college, but only for a specific part of the population. If you’re 18 years old and you’re thinking about going away to college, definitely the college experience is something you’re going to look at, but if you’re 27 or 37 or 47, which is the fastest-growing part of the college-age population, the adult student, the college experience itself is less important than the product. That’s why we hear financial language being brought in to higher education when it didn’t use to be, words like ‘consumer’ and ‘product’ and ‘return on investment’ are real because the adult student is more financially savvy and is looking for some output that isn’t experience-based. Their experience needs to be the engagement within the online classroom, not whether there’s a lazy river, a dorm. So I think that’s true for only a very, very specific part of the college-age population. I think it’s also a mistake to think about colleges and universities in the traditional eighteen-year-old context. I think it’s proven that that is changing, particularly when universities, especially those that are struggling, are putting a lot of investment dollars into growing graduate programs, because that’s where the students really are right now. We know there’s going to be a 2025, a 2026 drop-off, a15% drop-off in the college-age population, you know, so it can’t just be about the college experience. It’s not going to last.

Dan:    It’s funny that you mentioned the return on investment. Maybe a week ago, some slideshow, some online slideshow got suggested to me, on some webpage, and I think the title was something like “the 10 worst returns on investment at college and the 10 best.” And it basically, it was just 10 schools and it showed what their return on investment was if you got a degree from that school, and then the 10 best. And at the time I actually thought to myself, “I really don’t think that I was seeing these slide shows 10 years ago on the web.”

Joe:     We’ve seen these boutique-type educational infrastructures creep up on the heels of higher education for years. And it’s because there is a contingent of students out there that are looking at alternative pathways and those alternative pathways come with a more direct return than a college degree. And so now you have people out there, and you know, this, the overall value of a college degree is something that comes up all the time. Is it worth it to go to college? Are you going to get what you asked for? Are you going to get what you paid for? Don’t go into debt. All of these things that are questioning the overall value. Well, what’s value? Value is generally the output of an investment you invest in. You get some kind of value from that investment over time. And there are that question that value, and then you see Amazon and Google try to get into the game of higher ed by offering those certificates low cost and en mass, and disrupt the model.

Dan:    I’m curious, how does engaging alumni from online schools work compared to on-ground schools, without that immersive, coming-of-age, lifestyle experience that traditional schools offer? Do online alumni feel a strong connection? Not having attended an online school myself, I just don’t have a sense of how strong the difference is.

Joe:     Well, I did attend one; I got both my graduate and my doctoral degrees at online schools; one that operates very traditionally at an undergraduate level and only was offering online courses at the graduate level, and then one for my doctorate that operates a hundred percent online. That’s what they do. And of course I was a working man and had to figure that out around my schedule. So I think it’s different. Alumni engagement after an on-ground experience is probably, and this is just me being an online student, it’s probably I don’t want to say the word ‘easier,’ but certainly it’s easier to paint a picture of what you’re supporting, right? If I’m on-ground and I had a great experience at, you know, this hall and you’re running a campaign for a new hall, I can remember all the dorm experiences I had and maybe I want to give some money for a new building. For an online student, I feel a strong level of engagement with my compatriots there with online learning. The resources for engagement, whether it’s Facebook, Facebook, group chats, LinkedIn group chats, the school does a good job of facilitating those, but from a fundraising perspective, I think it it’s a little bit more difficult because there’s not as much of a tangible product of support. So I think that’s the difference. And I think you have to do extra work for an online university to fundraise. I think it takes an extra case of support to really get those dollars in from alumni. And that’s my, my guess at the undergraduate level. I remember walking down the street and getting a slice of pizza on my way to the next building. I remember the feeling and the smells, and it’s easy to pull on that emotion, if you will.

Dan:    Looking back on your online experience now, do you maintain the relationships you’ve formed? I guess what I’m trying to ask is if you reflect back on the relationships you formed during the time you were traditionally in college do you see an obvious difference? I expect there would be a difference given that one was graduate school and one was not, but what’s your feeling, looking back on your own experience?

Joe:     That’s a good question. I don’t know if I’ve given that a tremendous amount of thought. Here’s what I’ll say, just from my gut. In my undergraduate experience, I have a lot of my old college buddies that we still stay in touch, right? It’s this random text message thread where I have all the randomness you could ever imagine for six guys who went to college together. And so my networking at that level was really just friends. At the graduate level, specifically at the graduate level, I wasn’t looking for networking as an online student. I needed a program that offered me the flexibility to get my graduate degree and help me manage and understand the 200-something employees I was responsible for at that time, because I was swimming and staffing and HR things, and I was going, what the heck is this? You know, somebody is wearing too much perfume and I have an employee complaint about what do I do? So I better go back and get a graduate degree in HR, right? Something to do with HR, so I can understand these concepts. At the doctoral level. Definitely networking was a part of it, but at the same level, I have networking through other ways, and the doctoral degree for me was about flexibility. When I started, I was traveling 50% of the time for my job. I could not go to a physical location to go to school, because I wouldn’t even know if I’d be in town. So the only way I could obtain it was through online education.

Dan:    We are talking to Joe Sallustio, one of our nation’s foremost online higher education experts. You’re the first guest I’ve had on the podcast that I feel is truly steeped in the online platform, and so I think you have a unique expertise and a unique perspective. I’m curious about where you think online will go as the result of what I guess I should just call the immediate aftermath of the pandemic. That’s an optimistic statement because “the aftermath” assumes that the “after” part is within sight. Although I feel confident, I feel good that it might be, I’m curious: if you were sort of thinking about one to two years down the road, how do you see the pandemic affecting the near-term of the online environment?

Joe:     I think that’s a really important question because we’re gonna walk right into it. I would say, and this is based on me talking with a number of administrators out there, listening to what they’re doing, how they’re doing it, and what resources they’re allocating, which directions: online education isn’t going to go away. I don’t think even in the institutions that have such a traditional pedigree that the majority of people there want to go back and return to whatever normal is. Let’s say the pandemic goes away six months from now, it’s eliminated from existence on the planet earth. I think that online education is going to have a place for two major reasons: Number one, it is much more cost-efficient once you have absorbed the upfront cost of investing in technology and infrastructure to maintain and retain a student who is much different, much, much different than a traditional student. Your online students are much different than a traditional student. That’s going to be number one, your financial people are going to be sitting around an office going, we have to have some online. It makes our financial model more viable.

Number two, the student isn’t going to want it to go away. I see, In my opinion, a majority of vast majority of institutions throughout this country offering hybrid. And by hybrid, I don’t mean offering on-ground and online, so you can pick which one you want. I mean hybrid within course, right? So think of it this way. I’m in microeconomics, I’m an undergrad student, it doesn’t matter, you’re in a university, pick it. I could decide whether I want to go online today, or I could decide whether I want to go on-ground today. There could be a synchronous time, it’s a time that I’d have to attend or I could be online during that time, much like we’re seeing in virtual learning now done at the K-12 level where you’re logging on at a specific time, but you don’t physically have to be there. I think that that choice is going to be demanded by students. You have to think that there’s digital natives right now, digital natives that are online and you don’t just give up that flexibility of online easily. You want to retain some level of freedom that it offers you. And so I think we’re going to see students really demand that level of flexibility from their institution. So we’re going to see that hybrid happen within course, within program, within university, all the way through education throughout the United States, I think in the next couple of years, really, until we see schools slim out. There’s going to be some consolidations or slimming in the sector entirely.

Dan:    I think it’s fascinating that you talk about students for whom the online environment is completely familiar to them, that they’re sort of natives when it comes to that. Because what I’d like to invite you to do is to do the opposite of what I asked you a moment ago, when I said, okay, look into the near future and tell me what you see. I’ll now flip it and say, all right, let’s look 20, 30 years down the road. My belief, and I’m not sure if this is a hope or a fear or what, but I think that the idea that somehow higher education will be immune to the transformation that we’ve seen in every other part of our culture, the movement to online, whether it’s shopping or entertainment or anything else, I think the idea that a higher education won’t undergo the same transformation is naive. Even if that transformation partly takes place, it will have a profound effect. You mentioned earlier about those schools, you said that the schools that are about 5,000 enrollment, the small, private, expensive schools, these schools that have staked their existence on the idea that people will come in person. And they might be willing to do that now, but they might not be willing to do that in 20 years when it feels really weird to do that in person, just as weird as it might feel for some people to go to the mall now, which is like the mall is the last place that they think of when they want to go shopping. I’m curious, how do you see the future?

Joe:     Well, I’ll tell you how I see the future. And I want to add one thing that I think sets the stage for the future, I’ll give you an example, Tesla and the car industry, right? I think that’s an example of iterating and evolving through what we saw as normal. And then you see all the hybrid cars and new technology being integrated. And I think that’s what’s going to happen within higher education, online education. Technology’s going to open up the eyes of institutions all across the country world to what the future looks like. And the investments of dollars, instead of going into a building, start to go into things like virtual reality and artificial intelligence and new technologies, new learning methodologies. I think that college is going to look much more like – you’re going to think I’m crazy – Marriott Rewards, now Marriott Bonvoy, because I happen to be a lifetime Marriott member from all my travel. It’s going to look more like that.

Dan:    Of all the things you could have said, that was not what I was expecting. Keep going. [Laughs].

Joe:     [Laughs] Okay. Okay. It’s, I don’t call it a membership because I think that really dumbs down what it’s going to be like. We’ll call it a relationship. It’s going to be a long-term relationship that you have as a student with a university, it’s going to have more ins and outs and less continuous lengths of time. The skills will be not necessarily competency-based education, but I think the skills are going to be very clear on how you earn this skill, how you earn this credit. I think you’re going to see credits broken up into ones and twos and halves. I just think that the student is going to be paced through education at a different rate. And so when I want to upskill on podcasting, because that happens to be a part of my overall major, I’m going to go to my university and I’m going to take a class on podcasting and that class is going to satisfy this type of requirement over time. So it’s a lifelong learning model. We’ll have non-credit micro-credentials, stackable credentials. I think the go-for-four-year model will be vastly different in the next 20 to 30 years. And think about it this way. This is why I say that: think about a gap year. Gap years are a thing now because of Coronavirus, whereas students who took a gap year before were irresponsible, right? If you graduated high school and you took a gap year, you might’ve had parents or people around you that said, what the heck are you doing? You gotta go to college. You see all these millennials, I saw an article the other day, I think it was Kevin O’Leary from Shark Tank was saying, taking a year off after college, after graduating college, is a horrible idea, that you need to start your career, get some work experience. With a lot of millennials, students have taken years off and traveled and done all these things. That’s going to be more the norm not the exception. And so gap years, or gap couple of years, are going to be happening more often, which means the student comes back, gets a job, goes to school for a little while, in and out. All of a sudden it looks like a relationship model more than it does a four-year traditional university model.

Dan:    My guest today has been Dr. Joseph Sallustio, a two-decade veteran of online higher education and one of our country’s foremost experts in that area. You can connect with him on LinkedIn or at Twitter @joesallustio. Amazing perspective, Joe, thanks for appearing on the podcast with me. I really appreciate it.

Joe:     It’s been a pleasure.

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