Applying portfolio reforms to postsecondary problems

I just got back from a trip to New Orleans, which continues to be a well of friendship and inspiration.

I. Where should you spend the next philanthropic dollar? 

In a few conversations, the following questions came up:

  1. Are the kids we serve going to succeed in life after high school? What will their lives be like when they are 30? Will they be living meaningful and happy lives?
  2. Is the marginal dollar of philanthropy best spent on making the K-12 system better (after 10 years of improvements) or trying to overhaul the post-secondary landscape?
  3. If you wanted to radically improve post-secondary, what would you do?

II. Post-Secondy portfolio 

The K-12 portfolio mindset entails viewing an educational system in terms of operators (running schools) and seats (how many students are served).

This mindset could also be applied to post-secondary.

By 2020 or so, New Orleans will be graduating around 3,000 students a year.

Let’s say that about 1,500 of them will be prepared to succeed in a four year college; 1,000 of them will be prepared to succeed in a 1 to 2 year credentialing program; and 500 of them will need deep support to enter the workforce and exit crisis situations.

Of the four year college students, you might need 500 to 1,000 “KIPP to College” type supports to ensure students make it through.

For the credentialing programs, you’d need 1,000 seats that can reliably produce students with employable credentials.

For the crisis students, you’d need employment and social service operators that could transition students into jobs.

III. Post-Secondary investment intermediaries 

Instead of assuming this will naturally happen in New Orleans (or any other city), you could capitalize a new or existing non-profit intermediary to launch, recruit, and support post-secondary providers.

At the outset, the intermediary would create a business plan where it laid out how money it would need to get X% coverage on the aforementioned 3,000 seats.

High-Quality existing local providers (like the coding bootcamp Operation Spark) could cover some of the seats, and national providers like Match Beyond could be recruited in.

Overtime, you’d expand what was working, close what wasn’t, and support new entrepreneurs to keep innovation going.

IV. Getting funding streams right

Most states subsidize mediocre public universities; the federal government tops this off with Pell grants.

To make the 3,000 seat post-secondary strategy viable, you’d need to blend a mixture of public support and tuition to make providers sustainable.

Louisiana’s course choice provides a revenue stream for programs that started working with kids while they’re in high school.

Creating a new university that housed many of these programs could allow for the accessing of Pell grants.

Wage contigent loan programs could also be an option for programs that were consistently placing graduates in high-performing jobs.

V. Who are the entrepreneurs that will seek out the 10x play?

The early New Orleans K12 entrepreneurs felt that they could deliver something to students that was significantly better than the existing system.

They were right.

A post-secondary transformation won’t happen on its own.

It will take a set of entrepreneurs to put forth a plan, galvanize funding, and spend a decade building the new system.

Is this the right play? If so, who will step up?

2 thoughts on “Applying portfolio reforms to postsecondary problems

  1. Cozzi, John

    This is a very interesting and relevant conversation. I think I’m going to spend the majority of my time over the next five years trying to help KIPP NJ rethink and expand its KTC model, including how we fund it. I think the employer community will need to become more committed financially and through actual support (engage kids earlier to better envision the world beyond our schools). This is an intensive, heavy lift but hopefully it becomes a beta site for broader models.

    I think virtually all colleges are a travesty on almost every level. They do not think of students as customers. Frankly, it’s why for-profit colleges got started and the best were run in the same manner as charter schools. The outcomes were multiples better than any non-profit that educated similar students. While there were bad actors the principal challenges were that (1) their pricing grew to exceed their return for students AND (2) the students had to rely solely on debt. In the 1980s and 1990s the risk/return was ok but the schools followed the rising non-profit price umbrella faster than the resulting salaries increased. Of course, a rational bureaucrat would notice the better outcomes of for-profits and better financial deal on subsidized non-profits and find a way to meld the two… I realize I’m in the minority on this view but lived it more than most.

    If you are interested I actually think there are people and ways to address a customized approach to addressing our students. There likely are a wide number of interests that would coalesce around trying this out in one place.

    Thanks for all of your thoughts that come through Relinquishment. It’s extremely thoughtful and helpful. I’m happy to talk about this topic.

    Regards, John

    John F. Cozzi
    AEA Investors LP
    666 Fifth Avenue, 36th Floor
    New York, New York 10103
    (T) 212-702-0504
    (M) 908-347-1427
    jcozzi@aeainvestors.com

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