922: LIVE From the 2024 ⁠Career Education Convention⁠ - with Billy Clark, President, Delta College of Arts & Technology

Dr. Joe Sallustio: Welcome back, everybody. It's your time to EdUp on the EdUp Experience podcast where we make education your business. This is Dr. Joe Salustio back with you on the final day of the Career Education College and University annual education conference in Indianapolis, Indiana. Always with me by my side for this conference is the one and only Douglas Carlson. He is head of partnerships at Lead Squared. Of course, Lead Squared is the reason that we're here. They sponsored this whole bit. Douglas, thanks for bringing us.

Douglas Carlson: Absolutely my pleasure. I'm looking forward to our guests and rounding it out. For the listeners, this is a really good podcast group to listen to as a set because it gives a really cross-functional view of everything that is proprietary education. Some of the really important things are the legislation, so we're going to round it out with that piece as well.

Dr. Joe Sallustio: That's actually a really good point. When we create the link with all of these episodes, it is almost like a journey that we took right through each part of the operations of career colleges, the institutions, the support, the technology, the students, the regulatory environment, law. That's a key insight, Douglas. Thanks for bringing one key insight here today.

Douglas Carlson: I'm trying. If we missed anything, I'd be impressed, but I'd love for any of our listeners to let us know what they would want to hear that we missed.

Dr. Joe Sallustio: Let's round it out. Let's bring in our guest right now. Here he is. He is Billy Clark. He is the president at Delta College of Arts and Technology. Welcome to the experience. Billy, how are you?

Billy Clark: I am great. Thank you. How are you?

Dr. Joe Sallustio: I'm doing great, man. Tell us first about Delta College of Arts and Technology. Where are you? What do you do? Who do you serve?

Billy Clark: We're in Baton Rouge, Louisiana. We actually have several campuses all in South Louisiana. We started in 1973 and we've been around in one form or fashion since then. Our major focus is allied health and nursing. Last year, between our four small campuses that offer the LPN program, we graduated 17.7% of all of the LPNs in the state of Louisiana.

Dr. Joe Sallustio: That's incredible.

Billy Clark: It is. That's a heck of a stat. Especially considering all the burdensome regulatory things we have to deal with.

Dr. Joe Sallustio: Speaking of which, Billy, what might you be referring to?

Billy Clark: I think one of the things we'll talk about today is the 90-10 regulation. In summary, the 90-10 rule requires only proprietary schools, that's privately owned for-profit institutions, to garner no more than 90% of their tuition revenue from federal funds. Now federal funds include Pell grants, student loans, veterans benefits, Workforce Investment Opportunity Act, foster grant, CHAFEE programs, anything the federal government touches is now considered federal funds.

It's a difficult obstacle to overcome when Bill Gates' kids can get student loans. Anybody can get student loans. It's just how you qualify for those loans that's different, which means now that the 10% has to be cash, essentially.

Dr. Joe Sallustio: Or state grants.

Billy Clark: Or state grants. But if it's state grants, lucky you. If it's cash, you have to think way outside the box on how you're going to generate some kind of cash business or cash difference to make up that 10%.

Dr. Joe Sallustio: That is correct. And that was doable up until this year.

Billy Clark: The Department of Education changed the definition and the parameters with which you could generate cash towards tuition and pretty much shut it all down. I think the next step will be, "Hey, you can only count towards tuition revenue anything you receive in Title IV, and you have to only have 90 percent of that." I think that's coming next. We're really close to that now, but we haven't made it there.

Douglas Carlson: I think the big change too recently is the fact that they moved the veteran benefit from the 10. So if you had Chapter 31, Chapter 33 funds, you could count that towards your cash or your 10. And so if you were recruiting veteran students, that would help you meet your 90-10. They moved that below the line, so to speak, so that became part of the 90. So now schools that have been recruiting veterans still will recruit veterans, but it actually makes them have to hoof it to make up that difference.

Billy Clark: We serve maybe five to six percent of our student body as veterans, depending on the campus. We're proud to serve them. We're happy to do so. In fact, they tend to be our better students. They're a little more disciplined. They know what they want and they're ready to go. However, I've had the opportunity to have a couple of VA audits after this rule. I let the auditors know, "You do understand that me serving veterans is now a liability to my institution." And none of them understand that.

I spoke to a chairman of the Armed Services Committee in Washington, told him the same thing and he had no idea. He said, "We gotta change that." I said, "Well, you gotta change what's going on over there. That was the problem, you just changed it."

This rule started way back in 1992. Just to summarize what 90-10 has done, I think it's probably the most immoral rule that's ever come out of the Department of Education. It has done more harm to students than any policy that rogue institution has ever come out with. When I mean harm, it has increased price, increased student debt more than any other thing they could have done. It eliminated competition. It artificially drove up tuition prices.

Dr. Joe Sallustio: Let's give an example here, Billy. I worked for a for-profit proprietary school for 15 years. We would look at tuition and say, "Okay, where should we price this program? We think it's $18,000. That's what we think the price is." But wait a minute, we have a 90-10. So in order to meet our 10, we would price it at $20,000. Because the 90 would be the 18,000 and then the 10 would be the 2,000 on top of that. That was the gap, right? And then we would finance, the student would finance that gap with loan servicers.

That's how it can drive up prices because schools would overprice their degrees to make up for that 10. If they did anything else, then they were really hurting margin, they can't invest in their programs and so on.

Billy Clark: We took a little bit different approach. Our approach is iffy. It depends on students being able to take advantage of it and seeing the advantage of it. In federal student loans, there are two types of loans. There's a subsidized loan where the federal government pays interest on that loan while you're in school. So it's basically a no-interest loan while you're in school. However, there's a second loan program called the unsubsidized loan program. And that program is just like a bank loan. As soon as you get money disbursed for your tuition, you start paying interest. Most students don't even know that, but it does happen.

One of the things we did is we just created an institutional payment plan. No interest, and so whatever you would normally have to get with the unsub loan, we would give you a no-interest payment plan, and that allowed us to collect cash and keep our tuition affordable without sticking so much debt onto the student.

Douglas Carlson: You did have to plan for default rates for internal payment. You now became a bank.

Billy Clark: There's a lot of truth in lending and there's a lot of consumer protection laws around that kind of stuff. So when you take something like that on, you're taking on even more work.

Dr. Joe Sallustio: You have to be really passionate because we make it really hard for operators and presidents to operate these institutions.

Billy Clark: What really resonated with our state guys is the students we serve. In Louisiana, 70% of the students that attend proprietary schools have attended another form of post-secondary education before they come to us. And I get a chance to talk to them, I ask them the question, "So what happened? Why are you still, why are you here as opposed to there?" And so what, didn't work out, I couldn't do the grades, all these prerequisites. I couldn't even figure out how to register a second time. And so, but not only do we take those students, we graduate them at a much higher rate than do our public counterparts.

Douglas Carlson: Well and the other really important step as well is you employ them and that is a huge piece of it. I'm curious to hear about what you are seeing in the space as far as being able to place students. You've been in the industry a long time, you've seen a lot of things. My impression is it's gone from you kind of, it was a little bit harder to place students, sometimes you had to really go out and hustle a bit. To now, there's so much demand, folks are pulling students out of school almost. Are you seeing that as well in your programs?

Billy Clark: We are. Our nursing program, at least half of it is clinical experience. So they go through a dozen sites before they graduate. And so they're shopping and the sites are shopping. So many of them have job opportunities before they ever even take their licensure exam. And on the allied health side, every program we have has an externship. So we're going to throw you out there for six weeks at the end of your program. To number one, prove that you can do it. Prove to yourself you can do it. Number two, we look for sites that are hiring, just like you said. And number three, if they don't hire, you've got a good reference. Well, most of them are getting hired now on their externship.

Douglas Carlson: And I think there's a similar dynamic, but maybe a little bit different messaging with the healthcare space. For instance, healthcare has always been an important space. But with COVID, people really looked at it as like, wow, these are people that are really risking their lives and putting themselves on the line. It's like, you know, a little bit more of the hero commentary. Is that still coming through? Are people excited about those roles? Because we just desperately need them. So I guess my actual question is, what is the perception of students about the degrees and how has maybe that changed over the past four or five years?

Billy Clark: COVID shut it down, and a lot of people were scared to get into healthcare, as you said. It's coming back. People are realizing that diseases are always going to be around, always have them, and enrollment is starting to come back. That's one of the things that created the ultra demand that we have today. You had a lot of professionals, nurses, whatever, forced out of the profession due to their age, their refusal to get the jab, and whatever else. So even if you lost 10% of that workforce, it was already short. And so now there's a huge gap and a need and you know, we're doing our best to fill it. Louisiana's done some great things to make us able to do that.

Dr. Joe Sallustio: I'd love to hear you kind of talk more about that then. Obviously, there's a lot of good work that happens in state houses, good work that happens kind of at the state level. Would love to hear more about what's going on in Louisiana specifically.

Billy Clark: So our legislators got together and looked at the targeted professions that we needed. So they put a program together to really encourage folks to get into two-year and less training for the five most needed professions or industries like construction, the trades, healthcare. And so it's a good program.

Dr. Joe Sallustio: What else do you want to say about 90-10, about Delta College of Arts and Technology?

Billy Clark: So really about 90-10, it needs to go away. It is one of the greatest evils ever perpetrated on students that attend any college, but especially proprietary colleges. However, if 90-10 goes away without any accountability metrics, it's going to be what it was back when they wanted it. And so that can't happen. So I'm all about accountability. I'm all for gainful employment, not the one we have right now. But there has to be some accountability metrics.

In fact, all students need to know before they go to school: How long is it gonna take me to graduate from this program? How much will it cost me to graduate from this program? That's not just tuition, books, supplies, everything. What are my chances of graduating from this program? How many schools do you know that have a 12% graduation rate? I know a couple in my state. They need to know.

Once I complete this program, what are my chances of getting a job in this profession? And of course, what all of us are interested in as career colleges, what are you going to earn when you get out? They need to know that. That ought to be standard fare before you ever sign the dotted line to register for your first class.

Dr. Joe Sallustio: I think that's for any program. That should be for any program, any school, any program.

Billy Clark: That's why it keeps getting shot down. Bill Cassidy does this every session. He'll put in this bill that's just about like that. And the powers that be go, "No, that would mean like my history bachelor's degree has to disclose like that. We're not doing that."

Dr. Joe Sallustio: Hopefully the industry moves that way because I think the consumer is demanding it. It doesn't matter what the type of institution is. The consumer is very smart. The student, the families are getting smarter about what they spend. They're getting smarter about debt. They want to know what the outcomes are going to be. And they measure those statistics in their choice and their selection process. And the sooner we get on board with that, the easier it is to recruit students.

Billy Clark: One of the cool things is not many people know it. You guys probably know this. You probably visited the college scorecard website.

Dr. Joe Sallustio: Free to the public.

Billy Clark: I can't tell you how many of my elected officials have said, "How did you get this data that we've been asking for for years?" So you got a computer, watch this. It's been there for years. And when they see that and then again, they see what we do as a career school, it's like, "Wow, we want more of you guys."

If you look at real graduation rates, and you have to compare apples to apples in a lot of ways, you look at a community college versus a proprietary college, the graduation rates of a proprietary college are significantly better, and they're usually not measured on a four to six year basis.

Dr. Joe Sallustio: Anything else you want to say, Billy, about the Delta College of Arts and Technology?

Billy Clark: We're good at what we do. We're not all things to all people, but we're everything to the students that come to us. We're not going to be a community college. It's not my ball game. But we're going to be career training forever. We're going to do that well.

Dr. Joe Sallustio: There you have it, everybody. Another amazing episode of the EdUp Experience podcast sponsored by Lead Squared, our amazing partner here to bring us here with my guest co-host, Douglas Carlson, head of partnerships at Lead Squared. And this is his final foray into podcasting this trip. Douglas, what are your final thoughts here after almost 20 episodes, I think?

Douglas Carlson: This conversation was wonderful. So Billy, thank you for that. And I think it also really illustrated and helped round out for me how dynamic this space is and most importantly, where the puck is going. The puck is going to where the consumer's driving it. And for whatever part of the space you sit in, whether it's for-profit, not-for-profit, four-year, two-year, community college, healthcare, trades, et cetera, all of it is going where the student is driving it, and the student is asking for exactly the things that Billy was just talking about. They want to know how much it's going to cost, how long it's going to take me, what are my opportunities, what is that initial job opportunity looking like?

If you go to Harvard and you want to go be an investment banker, it's a high-end career track, but that's not any different than going to a career school that you're looking to get a job in a specific thing. Those are actually the same concepts. Delivery methods, obviously. But I love that consumers are being more and more informed. And I actually think that just gives private education a lot of tailwinds that are really, really important to hopefully actually address some of these things that just structurally don't make sense.

Dr. Joe Sallustio: Well said Douglas. And thank you to our amazing guest who listened to you soapbox because you did a great job doing it. He's Billy Clark. Billy, it's been an honor having you here. Thank you for coming and giving us some insight.

Billy Clark: Hey man, thank you for the opportunity. I always like to tell our stories. And there are a lot of things that we can do to make it better. I often say if I was king for a day, this is what I would do. Nobody's taking me up on it. Maybe we will.

Dr. Joe Sallustio: Everybody contact Billy Clark for the magic wand.

Billy Clark: That's right. I don't want to run for office. Make me king. I'll do that.

Dr. Joe Sallustio: Fair enough. And this is a final sign off here. The EdUp Experience podcast brought to you by our amazing friends at Lead Squared at the Career Education College and University annual Education Convention. Ladies and gentlemen, you've just EdUpped.