919: LIVE From the 2024 ⁠Career Education Convention⁠ - with Bill Ojile, Partner, Snell & Wilmer

Dr. Joe Sallustio: Welcome back everybody. It's your time to ed up on the EdUp Experience Podcast where we make education your business. If you don't know by now, my name is Dr. Joe Sallustio and I've recorded nearly 900, actually probably more than that because we've got a bunch in the hopper of these podcast episodes over the last four years. I think we're on number 15 or 16 here in Indianapolis, Indiana live at the Career Education Conference in, Career Education Conference, Career Education Colleges and Universities.

Annual education conference as you can tell I've done a number of these today. In fact for my next episode I'm going to ask my co-host Douglas Carlson to say all that stuff. There he is everybody Douglas Carlson head of partnerships at Lead Squared. Douglas welcome back again.

Douglas Carlson: Yeah it's been a great day and I've said this a couple times but I'm looking forward to this one because we have gotten a lot of different views around higher education. And we're gonna give you a really critical view from a subject matter expert. So I won't steal his thunder. I'll let Joe introduce him, but I'm looking forward to it.

Dr. Joe Sallustio: Welcome to the microphone Bill. How are you?

Bill Ojile: Thanks, Joe.

Dr. Joe Sallustio: I'm making good on this promise that I made you nearly three years ago that I said, Bill, come on my podcast. You'd be a great guest. And you said, sure, Joe, I'll come on your podcast. And then I think I forgot to call you back or never called. Now I forgot to email you. Perhaps I had kids hanging around my legs or I had a full basket of laundry. But, you know, sometimes you don't get back to people. And it only took three years for us to get here. But, Bill, I want you to know how much I love you, my friend.

And I am glad to have you here and as Douglas said we haven't really talked about the legal realm around career education, colleges and universities. Before we do, tell us a little bit about Snell and Wilmer and your recent transition.

Bill Ojile: Yes, so I've been in private practice for nine years and before that I was the general counsel for a school group for nine years, did their legal, HR, regulatory and compliance work. And I made a transition about two weeks ago to Snell & Wilmer to grow my education and continue my education practice. Snell & Wilmer is a Western U.S. law firm, historically based in Phoenix, that has about 500 lawyers and 16 offices, again mostly all in the West except for one in Washington DC. And they have a broad base of services they offer and a broad base of educational clients they do a lot of different things for. And I'm excited to add my regulatory litigation compliance expertise to that group.

Dr. Joe Sallustio: Yeah, they got so about 500 attorneys, 499 mediocre ones and one amazing one. Amazing. No, they have great attorneys. I might get fired for that.

Amazing attorneys at Snell & Wilmer all across the country and you know taking your higher education practice there. You've been around the block a few times here in higher education with the number of schools number for-profits, nonprofits, publics, privates, community colleges really helped them all. Give us the lay of the landscape that you see because you get to operate at a different level than most of us regular folk that aren't attorneys. You get to see how government regulations—

Well, first of all, you have to interpret what the heck they mean. And sometimes that's the hardest part. Like, what the heck does this mean for us? Literally, you'll hold webinars to explain to us what they mean. And then we have to go execute on these roles that are fuzzy sometimes. What do you see in this industry and career education? What's going on?

Bill Ojile: Well, I would say it's... confused. And primarily it's because I think career education has become a political football starting with the Obama administration in 2008. Yikes! Trying to roll back what they viewed as the excesses of the George W. Bush era where at that time you started to see publicly traded schools, you started to see private equity enter into the mix and there became this concern that revenues or a drive for revenues would create, you know, potentially the situation where people would go out and get unqualified enrollments.

I think that the department under the Obama administration and that has continued now under the Biden administration has internalized that narrative that people are going to be abusing students and they don't believe that anyone, quite honestly, can make an informed decision to go to a lot of different career schools. And so they approach it from that premise. They drive.

they have regulations designed to prove that premise and they've really worked hard through regulation and enforcement action to get rid of who they perceived as bad actors.

Dr. Joe Sallustio: Go ahead man Douglas I know you've got lots of questions.

Douglas Carlson: Man so almost like where do we start but let's start at the macro and go to the micro. What are the big pieces of legislation that people need to know about today that are currently in effect? And what's potentially coming down the pipe that would change that?

Bill Ojile: Okay, Douglas, I am going to throw you a curveball on that question.

Douglas Carlson: What?

Bill Ojile: Because obviously the Higher Education Act is the piece of legislation that governs higher education.

Douglas Carlson: Yeah. Self-evident.

Bill Ojile: Thank you for your great attorneying. Right. This is part of what you get. It's fuzzy math. Okay. So the department has adopted regulations under the Higher Education Act. And what you've seen over the last fifty-some, sixty years since the Higher Education Act was adopted is a real sea change in exactly what happens in Congress. Before, Congress used to pass laws and they would be directive to administrative agencies to implement the law that they passed. In the early 70s, early 80s, there was a seminal Supreme Court decision called Chevron that was...

adopted by the court a decision that gave deference to what they called expert agencies and that deference allowed a higher standard of review and appeal with respect to whether a decision of an administrative agency or an administrative rule was consistent with the statutes that enabled those regulations. That has produced what some people might call the administrative state other people might give it other terms that that you know where congress is essentially ceded its authority to pass laws and sent now to administrative agencies very broad directives to adopt a law or adopt a regulation on X. And instead of saying, here's the law on X, and now adopt regulations to implement it and make it work. The Supreme Court is hearing a case.

heard a case this term and there is anticipation in the next couple weeks a decision will be out on that case and that there is strong belief that chevron will be overturned really yes and that will create a fundamentally different landscape for regulation in general in particular regulation in higher education we will see that there cannot be a lot of the imagination, let's call it, that have gone into the rules by the department. And gainful employment is a great example. There was a word, a phrase, gainful employment in the original Higher Ed Act. It wasn't explained. The department, through its gainful employment regulations, without any enabling legislation, defined and developed and came up with this whole regime of what gainful employment means before chevron that couldn't have happened wouldn't have happened there would have been legislation that says you know this is what gainful employment means and here's what we need to do about it congress saying that our elected officials so it will turn you know it will i hope try to hold more honesty in the process

And it also will try to, it will also lend itself to having the Department of Education, hopefully, be a more honest broker in terms of some of the investigations and enforcement actions that they do where they make, let's say, you know, extreme findings and decisions that may not be supported by the evidence.

Douglas Carlson: Did that answer your question, Douglas?

Bill Ojile: Yeah, very thoroughly. So I appreciate it. And maybe build on that or clarify for things like gainful employment and 90-10 and the 150% rule in those pieces, assuming this legislation gets overturned, does that automatically make anything happen to those? Or is there still kind of an incremental process where those need to be challenged? How does that play out?

Bill Ojile: But there will still need to be challenges. And 90-10 is a great example. The statute says 90 and 10. it would then there was there was some legislation for 85 and 15 yep and then it went back to 90 and 10 and there are there's been some legislation about as to what you can include in 90 and what you can conclude in 10 that's a great example of the legislative process the department couldn't adopt regulations that went beyond what the higher ed act prescribed yeah now and on the other side something like gainful employment you can anticipate that gainful employment, borrower of defense, potentially state authorization, rules developed in those areas may be challenged.

when you challenge them, it's not like they're immediately deficient. But you have to, the department is not held to some higher standard where their decision is given preference or deference. It's now, okay, what's the law say? You know, you agency are saying this. The regulated entities are saying that. we're gonna just decide you know jump ball here we're not giving you a leg up you can't stand on your own and playing to take the jump ball

Douglas Carlson: Is there anything that schools need to be aware of that's coming to them soon? That whether they're for profit or nonprofit that they just need to be aware of, it's maybe not on somebody's radar right now or should be on somebody's radar or are we in the clear for a little while? Regulatory speaking?

Bill Ojile: Regulatory? Here's a... I don't know. You're looking at the wrong guy here for that.

Dr. Joe Sallustio: Regulatory is I think fine.

Douglas Carlson: Yeah, I think that's fine too. I mean, I have the EDD. You're the doctor.

Dr. Joe Sallustio: Yeah, regulatory lies. I mean, if we're going to keep going. Yeah, well, like my father used to tell me, a JD is still a doc, you're sorry you have an MBA, son.

Bill Ojile: So I would say that one that we were talking about before we got on the air was the transcript issue. And I think about my college experience where if you had a parking ticket or you had a book that you didn't return to the library or any other number of things that you owed the school, they would not give you your transcript or your diploma until you paid them. And that's been kind of a... I think part of the playbook of schools forever. It's been a best practice. And so now, starting July 1, you're not going to be able to do that anymore. You're not going to be able to hold up people's diploma or their transcript if they owe you money.

Dr. Joe Sallustio: I think the nuance, right? So this is the part that when I say at the beginning that you have to translate these regulations, I feel like this is a good example because you're gonna, please correct me if I'm wrong, but the last time I read it, it said something like, if the credit is tied to Title IV funding, you have to release the transcript or you have to release that credit on a transcript. If the credit is cash funded and not tied to government funds, you could still hold it.

Which means you would have to have a technology that was sophisticated enough to pull apart credits that were either funded by Title Four or not. issue a partial transcript with just the cash-funded credits and Hold back the title for credits. It's it's almost a pot and no school is gonna be able to do that now and they're not going to yeah It's it's not practical. It's just administratively. It's burdensome And that's the only hook the department has is title for so if you're a title for school You're subject to the department's regulation. So they have to hook it to title for and the

Bill Ojile: And you know, I think that there is a... What drove this is more of gap funding or private student loans, which were big balances potentially for students when they left. So they owed Title IV to the government and they may have owed a gap amount to their school or to a lender or to a loan processor that the school used to manage their private loans. And those could be four figures, potentially five figure numbers.

I don't know that they were fully thinking about parking tickets, but a traditional school is going to have to change its practices.

Dr. Joe Sallustio: It's crazy complicated and I think the intent though is that it's better for the student who might be interested in transferring out of your school instead of holding them hostage. You can release that student's transcripts. They can go to, assuming the student's going to do this, go to another school, enroll there. That school's going to take all their transcript credit and they're going to continue on in their education. Probably not likely. Those students who are looking for their transcript or just looking for their transcript could be for a job, it could be for anything that they're looking for the transfer, they just want to have a copy. The likelihood that they're just trying to grab it and go enroll somewhere else tomorrow, maybe some will do that, but you know, the idea I think is that it would be better for the student to be able to complete their education, right? That's the original intent.

Bill Ojile: I mean, you know, I mean it would be fairly cynical if the department said it was for transferring credits. Yeah credits don't transfer that all that easily right but I think for the the latter point you make is actually right I mean somebody comes back and they need a transcript for their job and they owe money to the school and school won't give it to them Yeah, so they can't get a job and if they can't get a job they can't pay their loans And so there's some logic to it But there's also this notion of you know schools

Dr. Joe Sallustio: They have to have some leverage over students. AR departments, they're freaking out. Like, are accounts receivable? Are we going to be sticking out there? We have no way to collect. Are we going to put more students in collections now? Right? So there's always a consequence. If you're going to put more students in collections, you're going to hurt their credit, or potentially hurt their credit, right? So then they're going to have less of a chance to get a loan on their house. They might have the job, but not a loan on that. So there's always unintended consequences to something like that. But...

on the common sense of they've taken credits they should have a piece of paper that says they took the credits now as an institution what we do next to be able to to to operationalize accounts receivable so that we can still collect the money from students who bail out with a five thousand dollar balance in their transcript I mean it's gonna be one thing that we're not ready to tackle I don't think as an industry well and I think it's going to be exceedingly hard

Bill Ojile: and harder going forward to get people to pay their loans. I think those loans were not necessarily paid by a majority of people anyway. But this notion that you're going to that student loans are getting forgiven makes people not think they're real. And so I signed a loan document and I owe my school $5,000. But who cares? Yeah. You know, and at that point,

Dr. Joe Sallustio: You almost want to say, OK, maybe you need to experience the consequence of that decision. Yeah. Because, you know, if you say that to your mortgage or your car payment in the future, you're not going to like the outcome. Yeah, I am.

You know, it's funny because I've interviewed so many people and I've had jobs while I've done this podcast. So I never really give my true opinions on some of these issues. One of them I will, though, is loan forgiveness. I think it is a huge mistake. Loan forgiveness. Now, I would say for those schools that had closures that where you had actors that closed their school fast and those students were left with with loans and maybe didn't transfer, I would say, OK, there's an argument there.

But a general student who leaves there, who makes a choice to go to college and leaves college has debt and tries to get it forgiven. It's like buying a car, leaving it on the side of the road and saying, I'm not paying that anymore. And somehow it's been okay for us to do that with education, but not anything else. And as somebody who just literally two months ago paid off my bachelor's degree loans, because I've been carrying them forever. There is some moment of, I don't know, accomplishment.

to pay off those loans that you took on, you decided to take them on. There's accountability in decisions like that. Do you see accountability coming back to the student loan process in any way? You think it's just gonna remain like it is?

Bill Ojile: I don't think there is gonna be. And I would tell you that one of the things that I found... most surprising when I came into the higher ed sector is how little control schools have over the amount of money that students can take out. Yes. And how you know you can't

Dr. Joe Sallustio: You know, they don't want - They used to have more control though. They used to, but not recently. I mean, you can't tell a student that's not a good choice. Right. You can't tell a student you don't need $10,000 for living expenses this semester. You can't limit the amount they're going to take. I just find it to be really an odd setup. And then I show my seniority a little bit.

When I say that, you know, the notion that we've somehow, a bachelor's degree has gone from four years, somehow it's okay now it's been five years and maybe it's six years. And it's not because people are working and it's not because they were interrupted to go off to war or anything else. It's just, you know, it's easy money and they like being in school. I used to tell my sons, you know, we're not on the Tommy boy plan here. But...

Bill Ojile: who took seven years to get through. But now the Tommy Boyd plan seems relatively accepted. The other piece that I really, you know, again, showing my seniority is the idea that, you know, people go off to obscure places to get obscure degrees and then they wonder why they can't get a job.

Dr. Joe Sallustio: It's true. You know, it used to be fairly straightforward that, hey, you know, if you want a job in Indianapolis, let's go to the University of Indiana or somewhere proximate where people know that school and, you know, they'll value the degree. And if you go to a school no one's heard of in Maine and you want to live in Denver.

I mean, why do you think that's gonna help you? That's a really good point. We do identify regionally or geographically still. We all do, right? That's why, God, I don't remember what the percentage is, but there's like 60% of students go within a school that's 100 miles close to home because that's just what they know.

Douglas Carlson: Yeah, well it's funny, even just basic commentary from, I live in Denver and Colorado has a huge hometown bias for University of Colorado and University of Denver law schools. And if you're coming from a school for a firm that's based in Denver, you want to go to one of those schools or you want to go to an IV or a really good school because there's a hometown bias. And there's plenty of great lawyers that come out of there.

Bill Ojile: Exactly at your point. There's a little bit of strategy there if you want to be a lawyer in Colorado Not a bad idea to take a look at the University of Colorado or DU So I grew up and went to school in Nebraska. yeah, and I went to University of Nebraska law school Go Huskers. You still have a good football team. Let's not go there. They shall rise again But I wanted to go I didn't wanted to I wanted to venture out of Nebraska. It was hard I got a job in Minneapolis with one of the larger firms there

But when I was coming out to, you know, go to work in the legal profession, you know, if you went to a top 20 law school, you know, that you could basically take that degree anywhere in the country.

sure people would be you know thrilled to have you now if you were in new york you know they've probably focused on part of the yell but but in the other places they they would you know except in michigan or chicago or whatever now I mean pretty much as i'm looking on the recruiting side having now been in law firm harvard yale in stanford are about the only three national

degrees and you're not going to see any any big leg up over a DU or CU law grad in Denver if you went to Michigan or if you went to the University of Chicago or if you went to Northwestern you're not going to see that same leg up because it's you know there's a lot of interest in coming into a lot of places and but Denver's turn Colorado's turning out good lawyers. Yeah interesting.

Douglas Carlson: Yeah, well so and so this is also where you I'm gonna show my ignorance a little bit but hoping to educate myself So it's not the only time today. That is true. That is very very true. I gotta make fun of a little bit. Yeah, we're having fun now Bill can you educate me and maybe this guy over here a little bit a little bit on what reauthorization is what it is reauthorizing and what might likely happen

from that. 

Bill Ojile: Okay, so you're talking about reauthorization of the Higher Ed Act? 

Douglas Carlson: Exactly, yeah. 

Bill Ojile: So they've been trying to reauthorize the Higher Ed Act since I think 2009 was the last time they did it and you know legislation has some shelf life. Sure. But you know there's got to be a will to do something and there's got to be compromise and there's got to be give and take.

And I think that there are certainly some people who are, you know, the chairmen of the committees in the House and the Senate who are interested in, you know, we're due to reauthorize this. We've been due for the last five or six years to reauthorize the Higher Ed Act. What do we want to do here? They cannot come up with a plan that they can sell to enough of their members. You've got, on one side, you have...

you know, a skepticism of do we really need? federal oversight on education, shouldn't it be to the states? Do we need the bureaucracy of a department of ed? And on the other side, you've got, well, what about the for-profit colleges? We need to continue to step on them. What about all these other issues where they want more regulation and more prescription and so forth? And then you add in stuff like the protests.

on campus and how it becomes politicized. Everybody takes a different position and then you can't get anything done. 

Dr. Joe Sallustio: Right, every, and that's a great point Joe. Every year there's going to be a new issue. Last year it was DEI, this year it's going to be campus protests. Who knows what it'll be next year. But those things get in the way because now everyone wants to, you always want to solve the last problem. And you know, instead of thinking forward, there are people in Congress that

I would believe have a forward look, but most people are trying to fix the last problem. And that ends up getting you stuck a lot of times. 

Dr. Joe Sallustio: How do we get in touch with Bill O'Gile to get us unstuck at our institutions if we're looking for higher ed advice, legal counsel?

Bill Ojile: Sure. So go to Snell and Wilmer.com S-N-E-L-L Wilmer W-I-L-M-E-R dot com and go down to the O's and you'll find Ojile and click on it and you will have all of my contact info, my background and I would love to hear from you if I can help you. 

Dr. Joe Sallustio: If anybody out there is wondering should they, if you're looking for legal counsel, should you hire Bill? I'll give my personal recommendation here, which I don't do very often here on the podcast, but I have personally worked with Bill a bunch of times on a number of projects, including state authorization. And we've had some legal advice conversations on different employee issues and so on that have happened in campuses that I've worked out in the past, and he is above board. And the advice he provides has been amazing. And I've always had a pleasure working with you. So if there's anybody out there wondering.

If Bill's a good guy to work with, I will tell you absolutely 100% contact him if you need that advice. Douglas, do you have anything you want to ask to close us out?

Douglas Carlson: No, I think you've done an amazing job explaining pretty complicated subjects in a way that even I can understand. So I appreciate that. 

Dr. Joe Sallustio: Douglas even messing with himself now at the end of the day. There he is, my guest co-host. I don't think so. that's not the right one is it, Douglas? We're all messing up today. We're all messing up. Let's get it right here. There we are.

It's been a long day. Douglas Carlson, head of partnerships at Lead Squared and our esteemed legal guest, the one and only legal guest that we have here planned for this week. I don't remember how I got him on the first time, but this is what he gets. He's Bill Ojile. He is a partner at Snell and Wilmer. Bill, thanks for being on the podcast. 

Bill Ojile: Thanks, Joe. Thanks, Douglas. 

Dr. Joe Sallustio: Yeah, appreciate you. Thanks. Ladies and gentlemen, you've just ed-uped.