EdTech News Roundup - Week of 10/4
Oodles for Noodle
I’m spending next weekend with an awesome group of EdTech entrepreneurs, organized by Ray Batra, Jake Weissbourd, and Grant Schroll. This means that by Sunday’s flight home I will A) have more energy than I know what to do with, B) be completely exhausted and in need of a superhero movie, or C) both.
Given I’ll be away from my computer most of the weekend, my plan is to forego the typical newsletter and focus on the tweet thread.
On to the news!
Funding / M&A / IPOs
The Mom Project raises $80M: led by Leeds Illuminate, a growth equity shop focused on education, who has had a busy | summer! The Mom Project focuses on finding jobs for mothers — both those who are already working and those who are re-entering the workforce. They have 500K+ active users and revenue north of $50M this year
Noodle Partners raises $50M: led by Blackrock. Noodle was one of the first fee-for-service Online Program Managers (OPMs) and focuses on creating sustainable degree programs that schools can subsequently manage themselves. This round of funding will be deployed toward continued growth and the development of their recently announced lifelong learning product
Medley raises $3.7M: led by A16Z. Medley is working on a problem I think about constantly — “adulting.” We’re all accustomed to this term being a punchline, so “adulting” doesn’t do justice to the magnitude of the problem. In an increasingly complex world, who are the people and services that help individuals navigate their careers and lives in a satisfying way? Medley would like to be the answer to that!
Note: I haven’t read or seen any write-ups of Udemy’s S1 yet - if you see one, please pass it on!
This article talks about the growth in advertising spending in the Higher ed sector. They call out several universities, including Southern New Hampshire University, Western Governors University, and University of Maryland’s Global Campus for spending $100M+ per year on advertising. They cite one school, Kean University, for spending $250K per year to be the official education sponsor of the New York Jets football team.
The Hechinger report argues that these dollars would be better spent on student support services. While I’m sympathetic to their argument, they provide no evidence that these dollars are being misused. We can debate individual examples, like a regional public university sponsoring an NFL team, but an industry that takes in $672B in revenues and only spends $2.2B on advertising would generally be considered to be acting responsibly!
There is a more interesting story here though - why universities are feeling a more acute need to advertise. My (unconfirmed) hypothesis is that more universities are attempting to (1) compete on a national level and (2) optimize their internet presences. In the process, colleges at every level of the prestige hierarchy are finding the need to supplement their current reputations with additional advertising. `
The details of the changes coming to the PSLF program are pretty great:
22,000 borrowers with $1.75B in student debt will immediately become eligible for debt forgiveness
An additional 28,000 borrowers with $2.82B in student debt should qualify for relief with a minimal amount of paperwork certifying their employment history
50,000 borrowers and $4.5B in collective relief, what could possibly be wrong about that? Nothing! Especially given the vast majority of this relief is due to the challenge of understanding which jobs qualify for PSLF, which is faced by not only borrowers, but also loan servicers and the department of education itself.
However…total student debt in the US currently extends to 43,000,000 borrowers with an outstanding portfolio of $1.7T. For the history majors like me, that means the PSLF changes impact .1% of borrowers and .3% of outstanding student debt.
And so, I struggle with announcements like this. I’m happy for the borrowers affected by this and other public | and | private | loan | forgiveness | initiatives. But I have a lot of angst for the millions of current and former students left muddling through.1
“This place sucks so bad, I don’t know how anyone can stand it” - Lt. Gen. Robert L. Caslen Jr., former president of the University of South Carolina, in an email to a friend regarding his resignation
Wash U goes need-blind: on the heels of their endowment’s 65% return last year, Washington University in St. Louis has joined the ranks of the colleges and universities that admit students regardless of need
How the US pays for childcare: in short, we don’t. At least not publicly, which has led to highly stratified outcomes between those who can afford high-end private solutions and those who can’t. The NYT describes several European models, though I wish there was more coverage of how this is done well elsewhere in the world
The future of venture capital: …is, apparently, monopoly money. People will gamble on anything :shrug-emoji:
Liked this post? Share it with a friend!
I work hard to stay neutral here, but it’s important to me that you all know my potential biases!
If you really want to go down the rabbit hole, student loan payments have been paused for almost two years now. The initial decision to pause made sense given the uncertainty of the pandemic, but loans tend to underperform when borrowers miss payments (this is a footnote because I need a good source on this topic!). The financial consequences for the student loan portfolio are potentially huge.