Hybrid learning 'is the way of the future': Cengage CEO
Michael Hansen, Cengage CEO, joined Yahoo Finance Live to talk the future of education and Biden's talks about canceling student debt.
Video transcript
ADAM SHAPIRO: Welcome back to Yahoo Finance Live. We want to talk about student debt. I'm going to put this into perspective for a lot of people. My four years at Syracuse University, back before electricity had been invented, the four years cost less than what people are paying for one year at some colleges today. That's why a lot of people are in debt.
But there are other issues and other ways to maybe help them. Let's talk about this with Michael Hansen. He is Cengage CEO. And we want to talk about-- I mean, you've got Elizabeth Warren talking about if we were to cancel $50,000 in student loan debt, it would wipe out the burden for 36 million borrowers. What do you think of this idea? Because there are pros and cons to it.
MICHAEL HANSEN: There are absolutely pros and cons. And Adam, thanks for having me. Absolutely pros and cons to this. The biggest con in my mind is, it's a Band-Aid to a problem that is fundamental, the problem that you articulated, which is the higher ed system needs to provide students with a better return on investment. It's gotten too expensive. And they don't have a return on investment. Frankly, 43% of students that are coming out of the higher ed system are underemployed. So we're not teaching the right skill sets. And that's what we fundamentally have to address.
SEANA SMITH: Well, Michael, talk a little bit more about the ways to address this. Because we've been talking about this for a while, how we need to make higher ed more accessible. We need to make it more affordable. Yet, we can't really get a grasp on exactly how to do that. Can you unpack some of those thoughts there?
MICHAEL HANSEN: Absolutely. I think that first of all, we have to recognize a two and a four-year degree is not for everybody. In other words, there are people that want something that is more affordable, shorter in duration. And what we are offering them through our [INAUDIBLE] business is essentially courses that cost, say, $2,500 and that give them a very tangible skillset to, for instance, to become a pharm tech or to become a medical coder.
And I think as a system, we have to think about what is the need of the individual student at this point in their life, rather than saying we've got this beautiful system with two-year degrees, four-year degrees, and they cost, on average, $30,000 in debt that we put people into, where that is not what they might need at the time. So flexibilization is, and I think what the Biden administration is doing right now is actually recognizing that and funding it appropriately.
ADAM SHAPIRO: So let's talk about what Cengage does because you don't have the pressures of having to attract students who can get the government loans that then allow the university to build the [INAUDIBLE] loans. You break that cycle. What else does Cengage do?
MICHAEL HANSEN: Well, we have essentially-- think of us as two businesses. One is we are serving courses to the traditional two-year and four-year degree institutions around the country and around the world. But the second business that we have is we give those much more focused skills, online skills businesses, to people, which allows them for a much lower cost to actually get a skillset that gets them a better job and a more well-paying job than they had before. So we are, as it were, serving millions of students around the globe with both those modality-- degree conferring and jobs that just require a certificate or a license. And we do both.
SEANA SMITH: Michael, talk to us about some of the trends that you've noticed over the past year, as students have been stuck home because of the pandemic, more and more people taking classes online. Explain to us just the type of behavior that you've seen and what trends you expect to stick as a result.
MICHAEL HANSEN: So what we have seen is that students are very comfortable with an online learning environment, provided that it's not only online. In other words, we are moving into a world where the hybrid model is the norm. In other words, there are certain things that I want to do online that I could do in the comfort of my own home and I can progress my education that way. But then there are certain moments that I need to be with a teacher, I need to be with my classmates, and I really want to have that interaction. So hybrid is the way of the future. The pandemic has demonstrated that we could do it. And I think this is something that's here to stay, Seana.
ADAM SHAPIRO: Let me just ask you one last question. Do you think we're going to see college campuses closing?
MICHAEL HANSEN: I think we will see colleges' campuses closing where the institution does not recognize that they need to provide a better return on investment. And I do think that as a result of the pandemic, we will see some existential threat to some institutions. But we will also see other institutions rising and growing, particularly if they are focused on skills that are tangible in the marketplace and that will give people a better employment opportunity and a better return on their investment.
