SPEAKER_01
Hello and welcome to Office Hours with EAB. Over the past year and a half, federal dollars have flooded into higher education through a series of COVID relief and economic stimulus packages. Unfortunately, colleges and universities have been slow to distribute a lot of that money.

On today's program, we'll explore why that is and also share advice for university leaders on how to move forward from here with speed and intent. Thank you for listening and enjoy.

SPEAKER_02
Hello everyone and welcome to Office Hours with EAB. My name is Danielle Yardy and I'm excited to join the podcast today to talk about a bit of an odd problem that many colleges seem to be facing. I say it odd because when you say it out loud, it sounds quite like the opposite of a problem.

In fact, it looks like a massive opportunity. I'm talking, of course, about the problem of figuring out how best to distribute and invest the huge amounts of relief funding that sound its way into higher education across the last 18 months. I'm joined today by my colleague and EAB's resident policy expert, Jackson Nell, who's going to help me dig into what's happening with higher ed funding.

Together, I'm hopeful that we can share with you a set of recommendations that will help your institution make the most of this fortuitous opportunity to build back better in the post-vaccine world. Welcome to the podcast, Jackson.

SPEAKER_00
Thanks, Danielle. It's great to be back on the pod.

SPEAKER_02
Yeah. The first thing that we need to get to, I want to be clear as we start talking about higher education emergency relief funding or HERF as it's been helpfully abridged. I think the first thing we need to know is that we're actually talking about a whole host of different things all coming together.

Perhaps, Jackson, you can kick us off on our path to wisdom here by helping get a head around a little bit of the definition of terms.

SPEAKER_00
Right. I think everyone's largely familiar with the higher education emergency relief fund or HERF at this point. Again, it's important to acknowledge that there's a little bit of a different flavor to each of the HERF iterations that have existed.

There are three now. Going back to the original CARES Act back in March of 2020, which seems like a decade ago, but that's when HERF was created. It was about $14 billion at the time, really targeted at helping institutions respond to that experience in the fall of the shift to emergency remote instruction that we were all trying to navigate and needed those dollars to help us then.

Then in December, we got HERF 2 in Carissa or SIRSA of 2020. Those dollars, about $23 billion came out and they were much more fungible and flexible for institutions, really recognizing that there was a host of disruptions to campus in the fall. Then institutions needed fiscal support really across the spectrum.

They allowed lost revenue reimbursement, for example, as being an eligible category of the dollars. They also had a lower student aid threshold. That was the primary vehicle for a while.

Then in March, not too long after that, you got the American Rescue Plan, which passed the largest of the HERFs. It's actually the combined sum of HERF 1 and 2. We creatively called it HERF 3.

Those dollars are now available, about $39 billion. That had a little bit of a different kind of flavor to it. It kept some of the HERF 2 stipulations, but added a return to that 50% of the dollars going to students' emergency financial aid.

Then imposed two new stipulations around using the dollars for public health and safety measures and conducting direct outreach to students about additional opportunities for federal financial aid using the professional judgment mechanism. That's the HERF narrative in a nutshell. Obviously, a lot of nuances and details there, but I think that's what most folks need to know.

I will hopefully set the landscape here.

SPEAKER_02
We're actually talking about a huge amount of money. Hint for them as we got into our conversation today, depending on the state, depending on the type of institution. Obviously, there are variations there, but most institutions are looking at a good chunk of change that they're looking now to allocate in a short time period.

SPEAKER_00
Yeah. I mean, this is the largest direct federal investment in history in higher ed. There's no dollarsome equivalent in that standpoint.

And there's a lot of other pass-through dollars available that are also going to higher education institutions either through state funding sources or going even back to the original CARES Act and some of the loan provisions and other grant programs that were created there too. But HERF is the primary vehicle that is getting the dollars out.

SPEAKER_02
All right. You would think, given the conversations that you and I have been part of in the last years in higher education, where folks have been on tenterhooks waiting for opportunities to invest, thinking about ways that they might want to reimagine their student experience or thinking about ways to improve the sustainability of their organizations. But they've been looking for funds to put into that.

And now we're seeing that we're so far into the opportunity to spend these funds. And there are institutions that are still 70% of these funds are on spent, at least based on my recent looking. Is that something that Universal across the US is a variation in different states? Where are you seeing folks spending these monies?

SPEAKER_00
Yeah. In total, we're talking about all of HERF dollars here. Nationally, about 32 in the low to mid 30s have been spent or at least reported to the Department of Education as of June 30.

Now, it's important to acknowledge that there's a bit of delay between the drawdown and obligation of the funds and then the reporting. So folks may have made decisions for a greater share of those dollars, but reported at least a significant amount, around 70% still outstanding in terms of spending. And a lot of variations across states.

You have everything from Delaware at the high end here at 56%. I'm sure President Biden's very happy about his home state taking the lead there down to Utah, which is around 25%. And then a lot of distinctions, I think, between publics and privates.

Publics have been significantly slower in spending the dollars. Just given that there's a lot more internal bureaucratic processes to be managed there, particularly when it comes to systems and some of the other procurement processes that we now publics have to deal with. And there's also been a large, I think, small to large school distinction as well.

So smaller schools have tended to be a little bit faster in deploying their institutional share than some of the other larger, more complicated institutions, speaking about their various budget models and organizational designs. So that's the best I can talk.

SPEAKER_02
Right, no, I'm sure there are going to be, yeah, there are definitely going to be unique circumstances that will make things more or less difficult to distribute. And I think that's a distinction that you're making there between publics and privates, and even just the decision-making processes that exist within those different institutions will give you a totally different trajectory in terms of how you're going to be able to spend these funds. So I think that's something we can definitely dig into as we keep going.

But I'm curious just at a high level, and myself coming from a tech background, I definitely have, I have theories on why this might be the case that we can also get into. But what do you think, Jackson, on some of the biggest reasons that so many schools have been so slow to spend or to allocate these funds?

SPEAKER_00
Yeah, I think we should first give schools a lot of credit with the original HIRF-1. They spent those dollars very quickly. A lot of schools spent them in spring of last year, essentially, because it was largely a liquidity shock that they were trying to solve.

And so they needed the capital infusion. Since then, I think it's taken a little bit slower for a variety of reasons. But HIRF-2 at this point is, I think, most, a majority of it at least has been allocated or at least determined internally on where to go.

But a lot of factors, I think, have converged around HIRF-3 in particular. I think first is that there's the student aid distribution that has yet to occur yet. A lot of schools are waiting for the fall for students to come back for them to do those allocations at scale.

And they're going to do multiple distribution windows money schools across the academic year. So that's going to keep those dollars out, standing for some period of time. And again, that's 50% of HIRF-3, which is huge.

The second component is the Department of Education was rather slow on getting out HIRF-3 the allocations and the guidance. The American Rescue Plan was passed in March. They didn't publish the allocations and guidance until mid-May.

So that prevented a lot of institutions from making those decisions within last fiscal year and kind of extended them out a little bit longer in terms of the decision window. It also included some added complexity, as I mentioned around HIRF-3. There are these new mandates that schools have to sort through.

So there's an administrative burden and a compliance burden that is added to the time as schools think through how do they meet that reasonable and necessary spend allocation on those required activities. And then more broadly, I think we're seeing a lot of decision fatigue across higher ed. Particularly a lot of schools basically hit the reset in June.

There was a lot of leadership transitions. People took PTO, much deserved PTO. And so that I think prevented a lot of decisions maybe from being made and deferred them to the fall.

And then finally, there's the uncertainty surrounding the Delta variant that has really spiked to the forefront of a lot of institutional leaders' minds right now. There's a little more concern about what this means from an operational and fiscal standpoint for the fall. And so some folks are thinking about using HIRF as a hedge or strategic reserve just to counter some of that uncertainty out there.

SPEAKER_02
Yeah, I know I think those are all I think feeding into what is a very, very difficult series of decisions that folks have laid out for them in the months ahead. And I think one of the things that you just touched on there that really resonates with me, Jackson, is the fact that the Department of Education was very slow to get out recommendations around this. And I think that in itself creates a lot of confusion around how some of these funds could be spent.

I know that I personally get questions on an almost daily basis as to whether or not X or Y particular purchase would fit within the remit of what someone could do with their HIRF dollars. And I think what's emerging slowly is that it really depends. There are ways to make the case for a lot of different purchases, and that's what we're seeing emerge as institutions do go through and start to allocate these funds to different kinds of purchases.

But the guidance that we have seen and that's shifted over time, what is the sort of the broad brushstrokes there that we're working within? And then maybe we can dig into some of the nuances and some of those categories that we see as the opportunities for institutions. Yeah, you're absolutely right.

SPEAKER_00
And I'm sure a lot of folks on the line can attest to just the tremendous amount of uncertainty. And part of that was you had a change in political leadership of the Department of Education in the process. So you had new priorities.

You also had the Department really trying to figure out what was happening here for the first time. I mean, this is all novel terrain for them and for all of us. And so it should give some credit to the Department, but they probably could have been faster.

There's, I think, a lot of factors at play. But generally speaking, to be eligible, the expense needs to have a clear nexus or investment thesis tied to some COVID imperative or need. That can be an indirect one.

So broad enrollment declines or something that's eligible here down to a very direct, narrowly tied, such as campus surveillance testing. So that's generally at a high level where the investment has to occur in and the expense to be eligible. And also, there are a series of prohibited categories.

And these have been consistent across all of the HURF pools, so to speak. So that's one space I think folks are very familiar with right now. But the biggest one there is a prohibition on any of the dollars going to recruitment or marketing activities.

And so that's been the biggest constraint. But generally, I think that's where we see the kind of big use categories falling. And again, it's designed to provide maximum fungibility and flexibility for campuses to recognize that no two schools have a similar experience with COVID so far.

All of the disruptions and expenses are so hyper-localized that there was no way to get a one-size-fits-all program at the federal level.

SPEAKER_02
I'm sorry, I think if what we do there is look at that policy, look at those recommendations and take a step back if we put ourselves in those decision-makers shoes. I think the first two questions that I'm hearing there that you need to be asking yourself if you're thinking, you know, is this eligible for these funds? First and foremost, is it on that prohibited list? Right? If it's listed there, then absolutely, I know you're going to be able to chuck that out immediately. But then secondarily, the next question should be how would we be able to tie this to that nexus of student imperatives? How would we be able to tie that to the student experience, to their ability to go on and complete or to go on and graduate or to go on and sort of achieve the goals that they have for engaging with our institution? And I think that's where, for me, it becomes a little bit difficult because I think in my experience working with higher education, we find it very, very difficult to even define what student success is or should look like.

And then in turn, we find it very difficult to determine what return on investment or return on experience looks like in those spaces. So as you come to then allocate funding, as you come to think about different projects that might have an impact, defining what impact looks like is very difficult when you can't determine what it is, the outcome that you're looking to drive. And so I think that's maybe something that we can start to dig into a little bit more here, Jackson, is how are institutions starting to justify that as we get into some of those more stretch use cases, right? As we start to see things like institutions funneling money into ERP upgrades, right? They're looking at changing their back end systems and being able to justify a student experience or student success angle on that.

Maybe it's helpful here to start thinking about how institutions are using it and pick apart some of those cases a little bit. Yeah, no, that's a great question.

SPEAKER_00
And I would say, it doesn't necessarily have to be student focused by any means. The guidance is broad enough to allow a host of institutional use cases, everything from keeping folks on payroll to facilitating some of the public health measures internally or making those technology upgrades that have a very clear narrative. I do see some cases that have started to get a little bit tied away from that kind of direct COVID imperative.

A lot of folks taking some of the off-the-shelf tech upgrades that they were planning to do even before COVID and now adding a COVID amplified need around it. Sometimes that can be justifiable, but it is certainly, I think, really pushing back and having a robust due diligence internally to make sure that that's a justified standpoint from a compliance need, but also to the point around the one that you raised, Danielle, of impact. Is this still going to drive the maximum amount of value that we want to create for our institution, particularly recognizing that the institution of the kind of post-vaccine era looks very different than the institution of 2019.

And so I think some of that kind of strategic thinking and those new inputs need to be updated to reflect that for sure. But I think the other challenge that comes up when it comes to justifying the uses is just a tremendous amount of competing priorities. Everyone has some sort of need right now, whether that's paying overtime expenses on campus to building out kind of de-densified facilities that have robust HVAC systems that allow for all of those measures.

So if you're a CFO or a decision maker at an institution today, you're trying to balance all of these very good and worthy ideas, but you're also trying to push the institution forward from kind of short-term immediate thinking to things that have longer term value. You can buy a bunch of masks using COVID, but the shelf life of that is very little, right, despite being essential. So the challenge that schools are trying to say is, how do you balance those kind of trade-offs and then satisfy as many stakeholders as possible? And that's tricky.

Any decision for an institution, let alone one where the federal government is essentially paying the bill.

SPEAKER_02
Yeah, no, I think that's a great point. The ability to look at these funds, yes, as a one-time influx into the education sector, and potentially something that we might see more of, but possibly not at this volume, and thinking about ways that we can meet immediate needs at the same time as laying out that roadmap for how our institution will continue to serve students, will continue to be sustainable, will continue to sort of deliver on the mission that we have. And, you know, as you were talking, Jackson, you talked about HVAC upgrades, you know, some of these things that are potentially some of the less long-term beneficial investments that we might have been making and they need to turn, but as you said, absolutely essential.

I'm curious just some of the investments that you might have seen. I know that you've been having an enormous number of conversations with partners here. What are some of the more exciting investments that you've heard about, you know, that's why you've really sort of lit up and thought, you know, that's a fabulous investment to be making at a time like this.

SPEAKER_00
Yeah, you know, I think that the first category that really stands out to me are these student equity and access initiatives, whether that is clearing all of the institutional student accounts receivable, so student debt, institutional student debt that is, that's a huge bold claim. It's also in the financial interest of the institution, right? You're getting all of those dollars as recovered lost revenue that you can then use more fungibly across the enterprise, but that's been one that I think we've seen a lot of schools publicly announce. We know of hundreds of institutions at this point exploring that in some form, whether they make that public or private, or go forward on that remains to be seen, but a lot of interest there and one that the Department of Education is very much pushing.

I think we're also seeing institutions really double down on their student support services, recognizing that they need to meet students where they are today, and that if they're going to meet their enrollment goals both for the fall, but beyond, they need to have these robust infrastructural support systems that are going to engage students in a host of modalities. And that also builds a lot of resilience into the enterprise when it comes to the recognition too, that I think a lot of folks are realizing that COVID's not going away anytime soon. And that means that we need to have that kind of optionality that many of us probably thought was just a one-time investment, but now seems to be much more of a kind of permanent norm.

And so that ranges in from putting money into mental health resources for students and some of the platforms that allow those to be scaled up quite easily, or as easily as possible, to putting dollars into kind of the success coaching, success grant, success mission more generally, I think has been really exciting to see some of those investments and bets that schools are making there. So those are, I think, what really excites me, where we do see most schools still doing though, and about 78% of CFOs have told us that this is where they're going to go, is lost revenue recovery more broadly. And again, that's when we talked about earlier those internal tensions, this is the easiest way to solve them, so to speak, right? Because you're showing a budget, you're turning restricted federal grants into a quasi capital injection that you can then make me defer a decision on later, could also use those dollars once recovered for a non-eligible expense, whether it's a capital project or doubling down in marketing recruitment.

So that is by far in a way that the space that we see a lot of folks going. The other is more broadly, as I mentioned too, is investments in technology. But to your expertise, Daniel, I'd be very curious in getting your thoughts here, is higher is not always the best at making technology investments or decisions, right? I would love to get your thoughts on why that's the case and what seems to be manifesting now that's even more challenging.

SPEAKER_02
Yeah, well, I think one of the most interesting things that I've seen here is that for a lot of institutions, COVID turned out to be a wake-up call, right? I have been working with higher education IT leaders for a very long time and they sort of see the pandemic or the onset of the pandemic as actually a pivot moment for some of the institutions that are out there where they had been burying their heads in the sand, had been trying to ignore the fact that the rest of the world was sort of moving forward with a digital approach to resiliency, with a digital approach to operations, and thinking about ways to really incorporate technology in the way that they offer services. And they have been facing a bit of an uphill battle on getting more folks on board with that. And so when it comes to sort of making decisions around technology, when it comes to sort of implementing a strategic plan there, they didn't really have the support of the rest of the cabinet.

And I think that's something that's shifted right now. So, you know, historically, higher ed has had very poor planning around digital strategy and most, I think, fewer than one in 10 right now have a holistic digital strategy for their institution. But the onset of the pandemic, the emergency move to remote operations meant that a lot of folks started to identify the gaps that they had in their plans or in their offerings that made it very difficult for them to be able to do that.

And where an institution doesn't have that longer-term plan in place already about how they want to operationalize their future, when the opportunity presents itself to do something big, it's very difficult to make a decision around it because you don't already have that sort of direction set. So if you don't have a plan for the investments that you might need to make, it's very difficult to then make those investments when the opportunity arises. So, you know, the inevitable happens.

You've already mentioned or sort of gestured towards this, I think, Jackson, a little bit, is that prioritization in higher ed investments is usually differential to the loudest voice in a cacophony, right? You talked about CFOs dealing with competing priorities, that's absolutely the case in the IT seat as well, you know, or you have the tyranny of the urgent. So with the onset of the pandemic, there were institutions who did not have functional or fully available learning management systems, right? They could not deliver online instruction without making significant investments there. And so, clearly, that rises to the top of the pile.

Is it the most effective long-term investment? They won't be able to find out, right? Because they had to take that step in a moment of urgency. So, you know, the overall thing that I would say here is, where there isn't a strategic approach to building out that future vision and where it's been done on the fly, where it's been done, you know, under the pressure of a very urgent situation, it's very difficult to make temporal strategic decisions there. And I think it's given people a bit of a bad flavor there around what it looks like to actually start making these investments.

So while it might have been a catalyst in one regard, I do think we're suffering in terms of just the change fatigue that has had to happen through this vast amount of influx of technology implementation and investment in technology that was seen in the last 18 months. So I think lots to be done here in terms of just setting those priorities, setting out even a very, very loose vision of where you want your campus to be in the next 10 years can help start to put those steps in place. But very difficult where that doesn't exist to make principal decisions in a timely fashion, I think.

SPEAKER_00
Yeah, no, so interesting, Danielle. I think you're absolutely right. You know, digital transformation went from being just kind of this buzzword to being like everyone's modus operandi in some ways, but not really understanding what that means.

And I think what has emerged over the last two years is just a recognition of how much technology really exists out there in the higher ed space and all of the flavors and formats. It's kind of an alphabet soup of confusion, I think, to make a decision on how would you help campuses really sort through what's out there. And then to your point, really develop that longer term strategy that's going to best return impact on

SPEAKER_02
the enterprise. Yeah, so as I think about it, I like to map tech investments into three different buckets. And I can give some sort of flavor around those to make them real for folks who might be listening.

But those three buckets are monolithic migrations, like huge tech shifts from old legacy systems into sort of newer versions of those systems that help update processes, adaptive digital foundations, so some of the underlying capabilities that you might need to be able to deliver on some of the projects that you have, and then more of those student centric innovations, so applications or technologies that are actually existing at the interface of your different staff and the students or their direct to student technologies, things that really shift the way that they experience their interactions with your institution. And for me, the most important there are the last two that I talked about, that underlying foundation for the digital future of your institution, and then those interfacing pieces that are going to help create a more frictionless experience at the intersection of your institution and the students that it serves. And so both of those are actually just really important mechanisms for shifting technology from what it has historically been, which is a cost center, into a strategic driver, into a force for delivering the future institution.

For me, I think some of those more monolithic migrations, we talked about institutions that you've chatted with who are upgrading ERPs, sometimes incredibly necessary, but an ERP at the end of the day is a kind of cost center investment in higher ed, right? It's not the thing that will draw students to your institution, it's not the thing that's going to help students stay at your institution, right? It's very loosely tied to the mission of what you're doing. And so for me, that's cost center spending. And for IP centers or IP organizations that are thought of as cost centers, they typically see cuts and cuts and cuts, right? And spending goes elsewhere in their organization.

But the good news is that we're seeing a lot of changes here. We're seeing business officers starting to think about IP strategy. In fact, I think Jackson, one of your surveys, it was 80% of CFOs were looking at revisiting their institution's IP strategy, right? So we're getting that buy-in that this is actually a strategic investment, not just a cost center.

And that leads us to those two other forms of investments that I mentioned, right? The adaptive digital foundations and then those student-centric innovations. So for me, it's that student-centric innovation that's probably more closely tied to what we're talking about here with her, right? If we talk about how difficult it is to draw a line back from specific investments to the way that they might impact the outcomes of students, those pieces that really, really impact the student experience, improve the student experience are going to be so much easier to justify at the nexus of what it means to become a more digital institution through the onset of the pandemic. So for me, that's where I would be looking.

That's where I would be prioritizing my spending right now is what are the pain points that my students face? What does a student journey look like? What is a student of the pandemic and what are the new challenges that might be rising up in importance for them to be tackling as they move through our institution? And then how can I simplify those processes? How can I maybe take those processes away, right? How can I make that something that doesn't concern my students so they can focus more of their time and energy on the things that matter? And it's that kind of process, I think that helps some investments rise to the top when you start to think about them through that to that eccentric mindset. Yeah, no, that's great context for me, Danielle, too.

SPEAKER_00
And I think about particularly as we move away from relief funding and investments, right, which was where we've been for most of 2020 and most of the early part of 2021, into more of a recovery mindset and thinking about where those dollars can best be deployed for long-term growth and focus, like focusing on that student interface, I think seems to be the greatest overlap and impact, but also when we think about federal priorities, both in HIRF, but also looking forward down the line to see what else might be coming from Washington and the

SPEAKER_02
near to medium future. Yeah, and I think actually, Jackson, that raises probably a very interesting and interesting, if speculative part of a conversation that we can have there is, you know, we have seen a huge influx of funding. We're talking about this being a one-time event, but I know that folks are on tenterhooks right now thinking about what the future investments in HIRF look like, because there are still rumblings that potentially are more dollars coming our way, maybe in a different guide.

So maybe that's an area that you can give us a bit of insight into what are you hearing in terms of possible future federal funding sources for HIRF.

SPEAKER_00
Yeah, and there's a lot to be out there and certainly a lot of speculation. So, you know, I always probably have to times to have the data that's recording because it probably will change in a week, right? But what I would say, you know, there's the traditional sources of funding for higher ed that are likely going to be amplified. And so what do I mean by that? I mean the kind of traditional discretionary appropriation process, right? So that includes our Title III, V, and VII programs.

So HBCU, MSI, and strengthening institution programs. And so more dollars being allocated there potentially in the next budget with a greater use category on the eligibility and some of the usage on the ed tech side. So seeing a lot of institutions explore those funding programs if they meet the eligibility criteria for the competitive grants that are often available in there.

The other component that's a piece of that is earmarks are back, right? This is a headline, I feel like that needs to be more capitalized across higher ed. But the earmark process was largely dissolved for 10 years. It's been restored for this upcoming budget.

And so you're seeing some institutions carve out dedicated capital project funding streams out of the federal budget. So funding particular facility construction, but also doing a lot of tech investments here as well. And that process is rather complicated because you have to go through your Congress person to do so.

But a area that I think a lot of public and as well as private institutions are looking at when they think about some of the one-time investments that they need to help financing from a standpoint. So that's the kind of normal nuts and bolts of government funding that I think folks are pursuing. Then there's the really what else is out there.

And that is the Biden Build Back Better Plan, right? The American Families and the American Jobs Plan. And right now, we have the Senate is in Congress Board generally speaking, are moving forward on a large budget resolution of about 3.5 trillion.

And in there are significant federal funding streams for community colleges, MSIs, HBCUs, as well as some public institutions on the four-year side. And that includes everything from dedicated infrastructure spending on new facilities and new buildings to one-time massive investments in student success and transfer, as well as free two-year, which we could spend an entire other podcast talking about. But those are on the table right now.

It'll be very interesting to see where Congress comes out of this. But I think the thing that's on the agenda right now is that the success mission and the ed tech mission have gone federal for really the first time ever. And you're starting to see Congress in the Department of Education really identify a need for large federal investments there.

SPEAKER_02
Yeah. I think thank you, Jackson, for that tentative look into the future. And I appreciate the need for sort of time-stamping that because they're the uncertainty that really is real.

But one thing that strikes me about that future that you're painting is that we are still looking at consistent one-time funding for a lot of these things and focused on capital expenditures. And if we look at ed tech, if we look at the investments that folks are making in technology moving forward, we're looking at subscription-based or operational expenditures, right? As they partner with more vendors, as they work on sort of more of these software as a service models. And so I'm just curious if you've seen any institutions able to make those kinds of purchases with this type

SPEAKER_00
of funding. Yeah. You're absolutely right. I think Congress works in an annual appropriation cycle.

So things tend to have short shelf lives for that reason. And that's just the federal budget standpoint, which makes it very hard to do technology procurement in this day and age. Now, some of those investments that Student Success One, for example, would be over a sustained period of time, 10 years, right? So there would be more dedicated dollars throwing through states and public systems in particular.

So that is one that probably has a little bit more flexibility from a subscription and longer term software standpoint. But what we're seeing on kind of the one-time elements is looking for things that are going to return that ROI, right? That are going to potentially be able to drive new revenue growth or cost savings enough to cover the investment going forward. And so that's why I think the success mission in particular really spikes off into the surface, given that there's the opportunity potentially to recover those, the cost to make it more sustainable going forward.

But again, I think the federal funding is never a great source for sustainable cost structures. Just ask our friends in the research enterprise, you know, at most large research institutions, that they know there's better than any else when it comes to labs and infrastructure there. So very similar effect that I think we're starting to see in other

SPEAKER_02
flavors or forms across higher ed. Yeah, absolutely. Well, thank you very much, Jackson.

This discussion has been absolutely riveting. But as we come to the end of our time together today, I did want to make sure that we pull up one last time from our conversation and maybe reiterate from your perspective, just your top pieces of advice. So university leaders that are out there, you know, thinking about how to move forward from here with care, but also, you know, thinking about how to move forward intentionally and with a little bit of speed as well and get this under the radar.

SPEAKER_00
Yeah, you know, I think the first piece of advice I'd say is a lot of folks have done this, but a lot of institutions haven't yet, but really making sure your decision processes around earth are very clear and transparent. You have clear decision makers in timelines and kind of workflows and expectations to follow, as well as kind of setting your strategic goals using the herf dowers from the very beginning and then working out some of those details as the process matures. I think that's so important.

The other thing in that is a lot of folks are including, you know, ROI or impact measures or goals in that process itself. And that's very important to kind of think about getting all of those kind of higher order impact elements that we were talking about earlier, Danielle, into that process as early and as effectively as possible. The second thing is, is again, you know, herf is, is not a blank check and it's kind of not a one-time piggy bank to, you know, keep in the back of your pocket till the very end.

It's kind of like a very restricted gift card that's going to expire. And so from that standpoint, you have to use the dollars or you lose them. And you need to do so very carefully and following all of those due diligence and kind of other elements that we've talked about through the course of our conversation.

So from that standpoint, I think it's very important to contextualize what these dollars and what they aren't, what they are and what they aren't essentially and making sure everyone on campus understands that too. And that hopefully will drive some of your decision-making forward. And then finally, I think to summarize everything we've covered really here is, it's making what investments you can make in the most student-centric, digital, and resilient building functions as possible.

I think that those are where the focus has been and has been even more magnified, I think in the last couple of weeks, as the Delta variant has raised questions about, you know, the sustainability of campus operations in the fall in particular. And so a lot of focus thinking about how can we build that institutional resilience and capacity that's going to allow us to improve our ability to serve students, but also give us a lot more flexibility as we think about the future and the trajectory that COVID's in. So those stand out to me.

There's many others and always happy to talk to anyone in the industry about what's happening here and share what we're hearing in some of the advice that we've circulated on.

SPEAKER_02
Perfect. Well, thank you so much, Jackson, for your time. And thank you to everybody who's listened in with us today.

We should go ahead now and sign off wishing you resiliency and speed in spending these funds and hope to see you all sometime soon on Office Hours with EAB.

SPEAKER_00
Thanks, everybody.

SPEAKER_01
Thank you for listening. Please join us next week when we take a look at the growing market for low-cost certificates, micro-credentials, and even full degrees now offered by companies like Coursera, Google, and many others. Our guests will explore the impact of this competition, as well as opportunities for traditional higher education institutions to partner with alternative providers.

Until then, thank you for your time.