860: LIVE From Ellucian Live 2024 - with ⁠⁠David King⁠, CTO, & ⁠⁠Corey Rethage⁠, Director, Product Management, ⁠Flywire⁠

Joe Sallustio: Welcome back everybody. It's your time to up on the EdUp Experience podcast where we make education your business. This is Joe Sallustio back on another episode here at Ellucian Live 2024 in San Antonio, Texas with a deflating eclipse viewing. We were all outside with approximately 5,000 colleagues in and around higher education, all gathered out on the lawn to look up at an amazing set of clouds with absolutely no sun, eclipse, moon, or anything else for that matter. If you put the glasses on, you would see just absolute black and darkness. There was absolutely nothing to see.

So we came back in and decided to podcast instead because what else would you do after a deflating solar eclipse but come back and podcast? It's the only thing that's going to make life better. And I've got two people that are going to make life a lot better for institutions here in front of you guys.

Ladies and gentlemen, thank you. That's Elvin Freitas, everybody, co-founder of the EdUp Experience podcast, who has not yet gotten on a microphone. I've not let him get on the microphone yet. No, honestly, we're ready to talk to these gentlemen. Let's bring in David King, CTO of Flywire, and Corey Rethage, Senior Director of Product at Flywire. We got Flywire everywhere. What's up, gents? How are you?

David King: Doing well, yourself?

Joe Sallustio: I'm doing great. You know, I thought I could see an eclipse. I didn't see one, but you know what? It's no one's fault. It is what it is, right? But we're going to talk higher education. David, you're back for a second time.

David King: Yes, thanks for having me. All the way back to an EdUp microphone a year later. The demand to have me back is higher.

Joe Sallustio: I mean, I told Jess if you have one person back, it's David King. I know, seriously, I did. And here you are. You know what? Because we need to know what Flywire is doing. So set the stage for us, whoever, whichever one of you guys wants to go. Tell us what Flywire is for those that have not heard of Flywire before. What do you do and how do you help schools?

David King: Sure. At Flywire, we're an international payments company. We specialize in four verticals, higher education being one, healthcare, travel, and B2B. Obviously, we have a huge higher education presence. We help with international students that need to transfer funds internationally. So a European student coming to study in the US or a US student going to study abroad somewhere else, as well as we provide domestic solutions, traditional billing, one-time payments, payment plans for US, Canada. We're in the UK and we're also launching in Australia.

In Australia, we've acquired a couple of companies. Recently it's called StudyLink, and they specialize in helping international student applications. So everything you can talk about from a student from enrollment to endowment and helping funds flow internationally or domestically, that is what we do at Flywire.

Joe Sallustio: Alvin, you know you've got swag when you say, we got a couple of companies, just bought a couple companies in Australia. That's why David King's back on a microphone. No, honestly, you guys, Higher Ed is in a funky spot. We need technology. We need technology that works. We need technology that integrates with our SIS. I think that's the key point here is you guys are integrating with multiple SIS systems across. You're agnostic, I would say, right? SIS agnostic in a way?

David King: That is correct. So it doesn't matter the SIS. We partner. We're an Ellucian partner. And we are certified on the Banner system. And we're receiving our certification here on Colleague. We integrate to Colleague historically. But we're just going through a certification with Ellucian right now.

Joe Sallustio: Amazing!

David King: That allows our products to snap in. As we all know in higher education, everyone's working on tighter budgets, even the IT staff. So we try to make it easy for our product to implement, get up and running, and then drive affordability within the institution.

Joe Sallustio: You want to add to that? Higher-ed just, I mean, we're technology, we need it and we need money. I mean, it's typically a place that there hasn't been a ton of investment or attention to in the past.

Corey Rethage: David gave his sort of explanation of what Flywire is from the product side. We get to build software to solve problems for the bursar's office or the student accounts office, right? A place that's traditionally underserved.

Joe Sallustio: Yeah, the flow, it's interesting when you have an SIS - Banner, Colleague, anything else - a lot of times they're set up with academics in mind, right? Classes, credits, and so on. Not necessarily with dollars in mind. And so what can happen in, I'd say, this room's experience is you set up with the student in mind, which the student's at the center, but all of the academic information goes in and all of a sudden the money's not flowing right. It's not going from A to B, the financial aid isn't pulling down, the payment plans aren't showing right, and a lot of times the money departments aren't brought in until an afterthought or they're not sitting at the table when you go through this integration. How important is it to have the dollars at the table from the beginning when you're dealing with technology?

David King: It's super important. I always say the financial journey of the student is just as important as the academic journey. There's no academic journey without the financial journey. Right, you've got to make that, and you heard if you listen to the Ellucian CEO speak this morning as she went through the stresses of students that are facing, the financial stress was the second top item that is causing anxiety for students. So one of the things Flywire does focus on is removing that anxiety. Paying for tuition is expensive, it's high cost, it's stressful, and we make that easier by making it seamless and providing affordability for the students through payment plans.

The other thing that we've radically revolutionized over the past year and a half, I think we touched on this last time, is we have digitized the 529 payment process.

Joe Sallustio: Give us a, give us in layman's terms here for anybody that doesn't understand, which of course I understand what you're talking about.

David King: So a lot of people have put a ton of their life savings and saving for their student to go to school. They've had these accounts in 529 for a long time. There comes the day it's time to take that money and pay for the school. The process of getting that money to move to the school is actually pretty complicated. It's old.

Joe Sallustio: Yeah.

David King: So I have to go to my 529 provider.

Joe Sallustio: Because there's a government influence? That's why or why?

David King: It's just not been digitized. So the process is I go to my 529 provider, I log in, I have to find the school that my student is at, and I say extract X thousand of dollars. And then I have to provide an address to where a check is going to be sent for a lot of money.

Joe Sallustio: For a lot of money.

David King: Typically the family doesn't know the Student Financial Services address, right? So they're struggling. They don't deal with addresses anymore unless it's an email address. Right? So they don't know where to send the check. And then usually people are also very last minute to do this. And keep in mind that these funds are held in an investment account. So when I ask as a parent to have the funds pulled, my 529 provider has to go through a process of unraveling those funds. It takes two or three or four days.

And then they have to get the check printed and mailed. And usually I'm doing this right before the tuition due date. So the check's late and then holds get hit on the kid.

Joe Sallustio: Nailed it. Right.

David King: And then if the check gets to the right place, usually we did a survey, checks end up at like the athletics office, at the alumni office. They're chasing checks.

Joe Sallustio: At the wrong school.

David King: Oh my gosh. They're chasing checks everywhere. And so then someone has to manually post it. So what we have done is we've solved that. We've partnered with a variety of 529 providers. They can just select the school that is in our payment network of where they want the funds to go, the amount they want to withdraw, and then we take it over. And once the investment account's liquidated, we move all those funds electronically, and then we post automatically into the student system. So the funds get to where they need to go, and they're there in two to three days.

Corey Rethage: That's important. In the past year and roughly a year and a half, we've moved $2.5 billion and reduced 240,000 checks from being printed and mailed. Bursars and you all, they no longer have those giant white mail bins full of checks coming into their office, right? Where they've got to figure out, you know, classes are getting ready to start, our bills are getting ready to go out, and we need to figure out how we're gonna go post.

Joe Sallustio: I love that you paint the picture so nicely. This used to be me. That was your bin?

Corey Rethage: It was my bin.

Joe Sallustio: That's funny. And you know what? You're on the younger side, Corey. Me, it like me, of course. We're very young gentlemen. Have you written a check lately?

Corey Rethage: I have had to write some checks for some like school outfits for my kids for dance.

Joe Sallustio: It's weird, right? Like typically when somebody says check or, you know, you want to - it's like cash or check, two of the things that nobody wants to do anymore. Carry cash or write a check. So unless I'm swiping or tapping or something like that, you know, typically, at least digital natives today that are coming up, there's not going to be checks at some point, right? So this entire process, what you're talking about needs to be revolutionized.

David King: Snail mail is not good when you're putting something in the mail. Funny enough, Elvin and I have a business credit card account. We've had to order his credit card twice because it's snail mail and never gets to them. So, you know, it is, it can be confusing.

Joe Sallustio: We have to watch where the money goes. You know, student debt is a real problem. This is something that can't be messed around with. Talk about the ease, the user experience, whether we see it, we the student, do I see it as this user experience? Are you behind the scenes and I'm interacting with some interface somehow and you guys are powering it?

David King: So we power the interface on the school side for their whole tuition, billing, payment and payment plan system. So we've invested countless hours to make it very simple for a student to digest what they owe and then have their payment options available to them. Whether that is I want to make a one-time payment, I want to do a payment plan and what my choices are within the school's rules, as well as do I want to do a, am I a domestic student paying domestically or an international student? And then for the international student, we will render and give them options and payment methods that matter to them from their home country.

Joe Sallustio: And you're converting it, currency exchange and everything?

David King: We convert it.

Joe Sallustio: That's confusing, you know, taxes and you know, currency exchange. All of those are really complicated. How does that work in the product? Corey, senior director of product, is that you behind the scenes delivering on a product because somebody said, we need this? Or are you developing that product? How does it work in your role?

Corey Rethage: We're helping create the product.

Joe Sallustio: How do you get feedback? What kind of feedback loops do you use from schools directly or partners like Ellucian?

Corey Rethage: So all of the above, whether schools through surveys or we have what we call the Flywire Advisory Board in education and it's a group of like-minded schools who all have similar pains and problems and will take problems like the 529. Honestly, that's where we heard about the pain of 529 was from the Flywire Advisory Board who gave us feedback and showed us pictures of the bins of 529 payments. But that's where we'll get a lot of feedback on core problems from, but then we'll also get into places like this or other user group or user events that we do.

Joe Sallustio: Is there real struggle for schools to get students to pay to have the right interface? Are we serving students the way we need to be when it comes to allowing them to pay easily?

David King: If they're using Flywire, yes. If they're not, maybe not. You know, there are a lot of systems out there that are still there and antiquated. There's billing systems that have been around for years and years and they're not designed on a modern interface, not designed to interact with - you know, one of the things is, as Corey said, we interact a lot with our clients to figure out what are their challenges and where things are going. And one of the things we've been investing and doing a lot of research into is - I'm not sure if you're aware of this - Generation Alpha is coming to higher education and this is a completely different generation. We've said Gen Z's digital native, they were kind of the hybrid. They were kind of the crossover into the digital world. Generation Alpha started in 2018, supposed to end in 2025. And they are truly, they grew up with digital. They were not a transition, right? The iPhone was already out.

So they're used to anything I want is on my phone, my phone is my phone, is I can surf the internet, it is my video entertainment device, I can play games on it, right? That is all there for them. They don't know any different. They've also grown up without cords, right? They're the most interconnected relative to being interconnected to the world.

Joe Sallustio: Such a good point.

David King: Through the web, but they're also the most disconnected digitally because they're used to like just AirPods, right? So their view of everything is really different. They learn in micro trends, right? Like they like one-minute increments. So all of this is going to radically change higher education. So what's that mean? And one other interesting fact is that an average fourth grader of Gen Alpha has a kindergarten reading level. Because this generation doesn't want to read, they want one-minute micro videos to learn.

Joe Sallustio: Are you kidding me?

David King: Yeah, that's crazy.

Joe Sallustio: That's a crazy stat. That's going to impact how higher education delivers academically, right? No longer are there days of spending - That's like a tidal wave that you just described to higher ed who's adverse to change, right?

David King: So you got like 16 years to - what, 12 years to figure it out. Little less than - the oldest is basically a ninth grade. So you're down to like four years before Generation Alpha starts to come.

Joe Sallustio: So they won't want to sit in a classroom for 45 or 50 minutes and listen to a lecture, right?

David King: Because they are so connected through the world, they expect other people from other countries to be partaking in their education with them. And this is where the billing and payments and ease comes in, right? Today, they're used to an Amazon-like and even better or TikTok shop experience, which is I can immediately find what I want. I can immediately understand it, and I can make my payment, and I can do all of that in like 30 seconds. Right? So the delivery of a bill and understanding what you owe, choice on your payment options, and then moving through that payment experience as quickly as possible will matter more than ever. Because if you don't do that, they abandon.

Joe Sallustio: Right. I was just going to say you said it too - cordless, untethered, like I want to be untethered from anything that's place-bound. Or I can just be over here and I connected to Wi-Fi and I went, I forgot to pay my bill. And if I'm not ready to pay it, if the interface isn't ready to receive it right then, I'm going to move on to something else and completely forget about it forever.

Corey Rethage: As long as David mentioned, so we have some of the best payment solutions, but our software is built mobile-first, right? It is meant that you can pull it up on any device wherever you are and you can quickly go and make your payment or jump on a payment plan and you can do it in a matter of seconds, right? This idea of I should be able to do what I want to do in a minute, two minutes, put it down and go back to doing whatever it is that I was doing.

Joe Sallustio: That's a fact. That's a fact. I'm playing Fortnite. Suddenly I need to take a break because I just lost the battle. I'll be on my PS5, shut down Fortnite, jump on pay my tuition bill and go and then jump back into Fortnite and kick some ass.

David King: Very accurately said.

Joe Sallustio: David, is this a real world situation for you?

David King: Nailed it, nailed it, nailed it.

Joe Sallustio: It's true though, right? If you're not - if it's not ready when I'm ready, I'll move on because I swipe every three seconds on something. So I'm gonna swipe it right away if it's not, which brings me back to the point and I, you know, I talk about this all the time on the podcast. We can do so many things that are frictionless. Like it's the whole concept of frictionless, right? Uber is frictionless. If you guys have seen "Super Pumped" on Netflix that talks about the story of Uber. Banking, this is the one that gets me. You could move money through bank accounts with a click here and a click there, thousand bucks if you want, right? To a lot of people, thousand bucks is a lot of money. I could do that easily. And it takes three seconds, five seconds.

You go into higher ed and all the things that you think you should be able to do easily are not easy. And so the industry as a whole is not, we're trying to, but we haven't adapted to the whole frictionless experience. That's what you're talking about. It better be frictionless when it comes to paying, right? Or else you're going to have, you'd be collecting, you'd be doing old AR phone calls going, "Will you pay $5,000?" right?

Corey Rethage: That's right. If you don't make it frictionless, they're - the user will abandon and they're chasing into collections. Ultimately causing more work for the student accounts and bursar's office. Right now they've got more work to do because the interface that the payer was using wasn't intuitive or wasn't simple to use.

Joe Sallustio: Is that a big part of the value proposition when you talk to schools? It's like, "Hey guys, we're gonna make it easier for students to pay so you can do what you're supposed to be doing, which is to serve the students better instead of chasing them for something else," right? And is that part of the ROI in moving to Flywire?

David King: Yes. Yeah, we see a lot of schools that implement our solution. They see a 40 to 50 percent drop of inbound emails, inbound calls, things along those lines because the students can self-service so much better.

Joe Sallustio: Surprise!

David King: And so then what that allows the school to do is focus on those students that have a real financial need that needs a lot of help and conversation around. They may not be able to pay and so they can then focus on those students.

Joe Sallustio: On retention.

David King: Yep, and get them paid, set up a package custom for them to get them through and retain the students. So much so that we've had schools go live and they'll call us and they'll be like, "Something's not right. Is the software broken?" And then they'll go to find out, no, it's that the software was so intuitive that all of those inbound calls that they were previously receiving, that they had to hire temporary workers in order to be able to field, they no longer need to hire those people or no longer need to field those calls because now people are paying, people are getting signed up on payment plans and doing it all without needing that engagement, all being done in an automated fashion.

Joe Sallustio: You know, in higher ed, when you look on the surface, it's this product and this product you want and it's gonna help you and you've got to justify it. But so much of what you just said is retention. If I can move my resources to the students that really need the help, I'm retaining more students, I'm thereby increasing my revenue, they're gonna have an easier time paying, so my cash is gonna increase, right? It's not just a product. You're talking about an ecosystem of actions, cascading positive action pipeline, if you will.

David King: All of our products are focused on helping with affordability and the enrollment cliff that is coming as well. Like one of the things we've built out is a massive agent network. We have a whole agents platform that helps agents. Those are in-country recruiters. US doesn't use them much. I believe we'll be shifting that way with the enrollment cliff coming because they're going to have to look for how they're going to source students, right? As the domestic population decreases, where they're going to have to go, schools are going to have to go internationally more, right? And they're going to need help with that.

There are - Canada's good at it, the UK, Australia's really good at it, where they use these agents in China, India, and other countries that do the recruiting for them and get the students to the school. We've got a whole platform that ties and works with the agents, so you can follow, a school can use our platform and follow a student from where they're at with that agent all the way up to the application process, all the way up to the payment. And visibility on which agents are performing for you, where the funds are flowing, handling all of the international transfers along the way. And like the US should be able to use this when we hit the enrollment cliff and we'll be able to help drive enrollment up.

Joe Sallustio: You know, you - another good point you've made, guys making lots of great points. The advice for a lot of schools is there's more students overseas than there are here domestically. Go to international markets. When you start doing that, you have to create a new infrastructure of currency adjustment and payment. So I mean, everything you just said is so relevant because it's happening, right? There are schools that are looking overseas. They're looking for exchange students. There's a lot of schools that are putting schools in different markets now, including like Eastern Europe. I mean, it's actually happening in front of our eyes, right?

Corey Rethage: I think a piece of it too is you're gonna - as it starts to happen here more in the U.S., it's gonna get to the point where you not just want students, but you want quality students and that's where Flywire software is gonna come in. It's not gonna just help you get students. It's gonna help you get quality students to search.

Joe Sallustio: What else do you guys want to say about Flywire? We'll go to you Corey first. Take us out. What else do you want to say?

Corey Rethage: Ultimately, we build software. Most of the people just within product have come from higher education themselves. Half my product team came from higher education themselves. So we're building software to solve problems that we were looking for others to solve.

Joe Sallustio: I think that's special. It brings a sort of special flavor to Flywire that I think is a challenge to get... So you're not just an educational technology company serving higher ed. You're a higher ed through a technology company serving higher ed. That's important.

Corey Rethage: That's exactly right.

Joe Sallustio: I like that. David, final word.

David King: We make educational dreams come true and affordable for any student in the world wherever they want to go.

Joe Sallustio: Well said. Well there you have it ladies and gentlemen, another year in the books here at E! Live. Well not in the books, they're just in the books with Flywire because it's the second time in two years we've had people from Flywire on the podcast to tell you about their amazing product. And there you have it. We - I don't remember my outro, I'm supposed to change it now. So I'm just gonna say that it was a pleasure talking to you guys. Who do we have with us? We've got Davy Davy. That's a combination of your names, David and Corey from Flywire. Check them out, check out the product and you know what you have done? You've just EdUpped.