Lisa W. Wardell, the new president and chief executive officer of the DeVry Education Group, talks about changes in the regulatory environment she expects under the Trump administration, what she, as an education outsider, is still learning about “the complexities around learning science,” and why DeVry University recently settled several legal issues with federal enforcement bodies. “We wanted to get that behind us,” she says.
GOLDIE BLUMENSTYK: Hi, I'm Goldie Blumenstyk, senior writer with The Chronicle of Higher Education. And I'm here today with Lisa Wardell, president and CEO of the DeVry Education Group. Lisa, thanks for joining us.
LISA WARDELL: Thanks for having me.
GOLDIE BLUMENSTYK: First off, I wanted — I'd be interested in your background. You come as the CEO of DeVry without really a lot of experience in higher education, none in a leadership role. How has that been any kind of advantage and also a disadvantage to you as you've taken on this job?
LISA WARDELL: Sure, I came from two other industries, primarily hotel and retail, commercial real estate, and then also automotive industry. It's been an advantage because I have a new lens. I'm very passionate about education, and I recognize that our students come first in everything we do. But I'm also able to think about what are new ways that we can do things in this industry and as thought leaders for education. Think from a disadvantaged perspective, I have to rely very heavily on my academics of my faculty. But that's good because we get good communication.
GOLDIE BLUMENSTYK: Have there been some things that you've learned right from the start in that process?
LISA WARDELL: Yes, I would say the biggest learning for me from an academic and student perspective is just really all the complexities around learning science and how people learn. I really think of things — or did think of things — as what people learn. But a lot of it is how people learn, especially for adult learners. A lot of who we have at our institutions.
GOLDIE BLUMENSTYK: Since you've come on to DeVry, it's been about a year and a half or so, is that right?
LISA WARDELL: Nine months.
GOLDIE BLUMENSTYK: Nine months, time does fly. That DeVry's been spending a lot of time settling complaints against the company. I know you've settled some issues with the FTC, with the Department of Education, with the New York State attorney general. I'm frankly — in one case at this point DeVry has probably made the biggest settlement of any for-profit-college company in the country. What should we take from that? I mean that was a $100-million settlement with the FTC.
LISA WARDELL: The takeaway there is we want to get that behind us. Because DeVry has been educating for over 80 years. We have seven different institutions. DeVry University is one of them. We educate nurses, doctors, allied health professionals, and so forth. It was important to get that in the past, resolve it, and be able to move forward with some credibility and authenticity as a higher-education leader.
GOLDIE BLUMENSTYK: And you've also made some pledges for the company that you're going to affirmatively reduce the levels of federal student money that you get to fund the university.
LISA WARDELL: Yes.
GOLDIE BLUMENSTYK: How is that going? You set yourself a goal for this June, I think —
LISA WARDELL: Yes.
GOLDIE BLUMENSTYK: — to get below a certain level. Are you going to hit it?
LISA WARDELL: Yes, we are absolutely going to hit it. We're going to be committed to that. The importance of 85-15 and taking 85 percent as a voluntary level for federal funding for us is that we want to demonstrate — and we know that the market values the education that we're bringing to corporate employers and others. And so to change our payer mix and have payers outside of the federal government — and that includes, by the way, VA and military benefits. It was a way for us to say, We're valuable, we know that our mission and our academics are valuable to our students. And we want to make sure that that message comes across to everybody involved.
GOLDIE BLUMENSTYK: So you're saying your 85 percent will include the VA money and the military-benefits money?
LISA WARDELL: Yes.
GOLDIE BLUMENSTYK: That's a very big difference.
LISA WARDELL: Which is significant.
GOLDIE BLUMENSTYK: Right, that's a very big difference for most of the other big for-profit-college companies.
LISA WARDELL: Yes.
GOLDIE BLUMENSTYK: Is it paying off at all? Are you feeling anything — you're getting any response in the market from that?
LISA WARDELL: Yes, for example, our corporate-employer relationships. We're really working hard because ultimately what we want to be is a part of the solution for the work-force skills gap. That is where the benefit for education in general and for for-profits, that's where we can serve our students best. And so we've been able to go into a lot of corporations — some we had already, some new — and really customize programs and make sure that they're getting future employees that have the skills that they need. So it's a win-win for us.
GOLDIE BLUMENSTYK: A lot of people have noticed that the stocks of for-profit-college companies shot up after the election of Donald Trump. I think your stock went up about 40 percent. And that was because people were anticipating, I think, that there would be a wave of deregulation of colleges in general and for-profit colleges in particular. From your point of view, from DeVry's point view, what deregulation would you like to see?
LISA WARDELL: Sure, I think, and our position has been quite clear on this, it's anything that benefits the student. Whether that's disclosure, whether that's to your point, the 85-15 federal funding, etc., we are in favor of. Because we want to make sure that our students know that this is an investment they're making. And that they get the payoff from the investment. We measure ourselves with persistence, completion, and then placement or graduate employment. That's how we want to be measured. I think for us, the most important thing is making sure that those student protections, in whatever regulation, don't end up with unintended consequences. And we feel that there are some places where that is the case.
GOLDIE BLUMENSTYK: Specifically what?
LISA WARDELL: Yeah, so for example, gainful employment. I would start by saying the premise, obviously, is education is an investment. So if you're paying for education, you should be able to get the benefit that over a lifetime of career and promotion and your work. In fact, we had a couple of programs that we modified because of gainful employment. And I think that's beneficial to —
GOLDIE BLUMENSTYK: You say measured over a lifetime, not measured over two years after graduation?
LISA WARDELL: Sure, absolutely, you're always building on that education. But we understand the premise of that cost balance with education costs and employment. But to give you an example, our vet school Ross Vet. It is AVMA-accredited. It happens to be located in the Caribbean, although it produces U.S. vets, many of whom are from underserved or minority communities. In fact, we have the most vet students that graduate and come back and practice. And our vet school would be in the zone as gainful employment —
GOLDIE BLUMENSTYK: Meaning it would be subject to a lot of the conditions of the gainful-employment rule?
LISA WARDELL: Exactly, as it currently stands. But if you would've looked at our cohort default rate there, it is less than 1 percent. In fact, it's 0.01 percent. So our vets are paying back their loans. And people who pay back their loans typically do so because they have employment and they're happy with their education. There's a few things that I think need to be addressed so that the students aren't hurt. We have thousands of Ross Vet graduates who are very proud of being Ross Vets, who make great livings back here in the U.S. practicing as vets. And we don't want their degrees to be tarnished.
GOLDIE BLUMENSTYK: It's an interesting mix. I think a lot of people aren't even that aware of where DeVry is. People may know of DeVry University from the commercials or maybe even the Keller business school —
LISA WARDELL: Yes.
GOLDIE BLUMENSTYK: But DeVry University itself has seen a pretty sharp decline in enrollment. I think when I looked at the numbers the other day, it's down from 70,000 to about 25,000 in six years. What does DeVry Inc. look like now? DeVry University is only about a third of the revenues, is that about right?
LISA WARDELL: That's exactly right. And DeVry University, let me start there, some of that is purposeful decline in students because we are focusing our programs. We are going through all of our programs. And we've been doing this for some time, but with a greater sense of urgency since I came on board to make sure that those programs have the right outcomes for students. So some of that is planned. Some of it, of course, is in general the decline in student populations, not only in for-profit but in not-for-profit schools. But DeVry Education Group has two medical schools: It has American University of the Caribbean medical school, in St. Martin, Ross University School of Medicine, in Dominica. All of those doctors come back and get U.S. residencies and practice here in the U.S., primarily serving underserved communities that need doctors. We're very proud of that. The Ross Vet school that I mentioned, Chamberlain College of Nursing has over 25,000 nursing students. And as you know, there's a complete nursing shortage.
GOLDIE BLUMENSTYK: No, actually nursing is as big right now as the traditional DeVry business and tech programs used to be.
LISA WARDELL: I would say that when we look at our segments, it is medical and health care, professional education and technology, and business. And that's where all of our institutions fall.
GOLDIE BLUMENSTYK: You've also been following the path of a bunch of your competitors, getting into the boot-camp space, creating a coding academy. So you don't see this as a fad? Do you think this is a big thing?
LISA WARDELL: I think it speaks to the work-force skills gap. And I think that coding and the boot camps there — and you're right, we did start there as many others did — is one place, and there's going to continue to be a need for that skill. But really I think the differentiation comes when you broaden that to, What are the other things employers are looking for? So for example, we just started a boot camp on the internet of things. Because that's what our employees are telling us they want our students to be able to know and be experts in when they graduate. So really trying to move with the corporate market.
GOLDIE BLUMENSTYK: And I noticed specifically, some of the other for-profit-college companies and even some of the nonprofits that have started boot camps, they've done it under a different name. You've gone whole hog, using the DeVry name. What should that tell us?
LISA WARDELL: Sure, it should tell you that we're proud of our legacy. DeVry University and now DeVry Tech, which is what you're referring to, are our campaign here as we think about pulling boot camps and other technology — we're proud of that legacy. That's where we started. We educated the first vets when they came back from World War II through the program to get vets to work. That was DeVry, at that time Technical institute. And so this is just a going back to our roots, and we're really excited about it.
GOLDIE BLUMENSTYK: DeVry was one of the colleges that was invited to a meeting that was organized by some White House advisers. Did you get any sense of the mood of the White House right now? What might we be seeing from them?
LISA WARDELL: Yeah, so this was the Trump transition team. But many of them are now on the education team. This was prior to January 20. But you know — look, there's a bunch of things that the people in the room agreed to, or I would say are agreed on. Such as year-round Pell Grants, for example. There were schools represented, as you know, not-for-profits were primarily represented there. And so we talked about those issues. It really was a listening session. It wasn't so much what they were giving input in terms of where the White House is. But I think certainly —
GOLDIE BLUMENSTYK: They didn't give anything away?
LISA WARDELL: No, they did not give anything away. But I did get the sense that they are going to have all different stakeholders at the table when we discuss these really important issues.
GOLDIE BLUMENSTYK: Great, all right. Lisa, thanks very much for coming in.
LISA WARDELL: Thank you for having me.
Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her new book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at email@example.com.