Mark Brown on Increasing African American Economic Mobility [podcast]

John O'Brien: So welcome to another Educause Community Conversation. I'm really excited today to be joined by Mark Brown, executive director of the Student Freedom Initiative. So Mark, I don't get the chance to talk to a retired Air Force major general very often, and so my go-to question is did that prepare you perfectly for working in higher ed?

Mark Brown: Hey, John. Let me first thank you for a chance to be with you all today. And that's a great question. What I would say is, in all fairness, I had to stop in between my time in the Air Force and my current position as executive director. And that stop was as the chief operating officer of Federal Student Aid, which is focused on higher ed, higher ed issues, and in my case, the student loan portfolio and all Title IX funding. I will say that I spent 32 years in the Air Force, and one thing that is portable is leadership. And that leadership helped me at the Department of Education. It helped me here as well. And then the other thing that's portable is a sense of public service. And I felt that in the Air Force as if our mission is for something greater. I felt that at the Department of Education, and I feel that here as the executive director of the Student Freedom Initiative.

John O'Brien: You're also on the file under unusual is the fact that when you were working for SFA, you were involved in creating regulatory expectations for higher ed, and now you get to live with them. How does that feel? How does that feel?

Mark Brown: And you're right. We had regulatory oversight compliance, which is absolutely necessary. And let me say that that's an advantage, right? Because as we're creating this product, we're creating it with all of those regulatory kinds of guidances and transparency that you would want in a product that deals with an individual's finances. We're baking it in so that our product comes out, and we believe it does come out, totally in compliance with those requirements. So again, it ended up, I won't say by design, but it certainly ended up being to our advantage to have had that experience.

John O'Brien: So our organizations have a lot in common, including our name doesn't necessarily say what we do. Cause doesn't exactly convey what we do. Student Freedom Initiative is very resonant, but what in the world do you do?

Mark Brown: I want to shape exactly how I answer that by our founding. So I'm going to go back a little bit, way back in 2019. And that's probably not that far back. Our founder, Robert F. Smith, was the graduation speaker at Morehouse College. And when he was there, he told the class of 2019, about 400 young men, that he was going to help them get started quicker. He was going to pay their student loans. And obviously, that was met with lots of applause, and after that applause came the real work, right? Go find out where these student loans are. Go find out what kinds of arrangements had been made, like Parent PLUS Loans and consolidations, all kinds of things. At that time, I was sitting in my former job at the Department of Education. And I think one thing that Mr. Smith, our chairman, found, as did the people working this for him, is that it's a quite complex thing to do.

And as they went through it and he made good on his promise, he paid every bit of those student loans and it was to the tune of 38 million dollars that he paid for those 400 young men, he felt he was liberating them from the burden of debt so they could go wherever their passions would take them and do the work that they wanted to do and not what they had to do to pay their student debt. Right? He was looking for that mix of capabilities. That student loan portfolio that I had, it was 1.7 trillion dollars. One third of that loan portfolio was defaulted, delinquent, or in some ways distressed, meaning the payment was not being made as agreed upon, and in some cases, several years old. So not in that good of shape. Inside of that number, that one third, was an overrepresentation of people of color.

And it essentially was, in many cases, some of our students that had attended HBCUs. What Mr. Smith thought I think, and you can often hear him say this, was how do we do this to scale? If you didn't happen to be fortunate enough to be sitting in the Morehouse College class of 2019 or the parents of those students, what about the other 100 or so historically Black colleges and universities, and really minority serving institutions, where the economic framework is about the same? What do we do to fix this in perpetuity? Out of that was born the Student Freedom Initiative, a 501(c) organization dedicated to liberating students to the degree possible of overwhelming debt and building up the capacity of the historically Black colleges and universities they attend and also making sure that their college time ends in social mobility, meaning they don't just get a job, they get a good one and can move along in society, which we think is the purpose of education. So that's what we do. There's a lot to that, but essentially that's our purpose.

John O'Brien: And it gets really interesting when you start thinking one person doing an act of huge kindness is one thing. My guess is your challenge is thinking in scale. And so I know a little bit about that some of what Student Freedom Initiative does is linked with this idea of an income share approach. Do you want to just talk a little bit about that?

Mark Brown: Out of all the instruments in the student loan portfolio, the one that is most problematic to us and to many who look at it is the Parent PLUS Loan. And the Parent PLUS Loan is when you've gotten all of your financial aid award packages that you are entitled to get, and you still have a requirement left to pay for your valid cost of college. The Parent PLUS Loan allows a student to have the parents sign, and then they get that loan to cover the cost. 65% of our historically Black college and university students participate to some degree in the Parent PLUS Loans. Those loans, in general, across the country, default at five times the rate of others. And the debt is held two times as long. So I think, as we would say in the military, we found our center of gravity.

We know what the issue is. It isn't a faulty instrument that's creating more debt and trouble than it's creating prosperity. And so the income contingent alternative is what we call it, is an instrument designed, initially for STEM students that are juniors and seniors, in a manner that gives them more flexibility and does not require their parents' signature, especially those who are coming from fragile economic backgrounds. Here's how it works. So if you are a junior or senior majoring in STEM at any of the schools that we are working with, you're making satisfactory academic progress, you've gone through your financial aid ward package and you still have a cost of college left, we offer up to $20,000 per academic year in an income contingent agreement. The way that works is for every $10,000 you make above the poverty level after graduation, you would then pay it forward by paying 2.5% of that in.

But so the obvious question is where's the flexibility? Well, here's the flexibility. Let's say you decide to go to graduate school. You don't pay during that period of time. It's not going to start like a promissory note, where we're coming after you and no matter what you're doing. You're not going to pay because it's income contingent. Let's say that you decide to go to a Title I school. All you've ever wanted to do is teach chemistry at a Title I school. You want to be a teacher. They pay a whopping $28,000 a year below the poverty level of 30,000, but you still want to do that because that's where your passion is. You don't pay anything while you're in that particular job. You don't pay anything until you are above the poverty level. Either way, after a 20 year period, it's over.

Now, let's say that you do take that chemical engineering job or that electrical engineering job. And you make 70,000, 80,000 dollars a year, and you've taken out 10 or 15,000 dollars between your junior and senior year. You'll pay the 2.5% of your income, and you'll probably be done in six or seven years. That's our point. We're able to fund those by virtue of donations made through philanthropic folks. So that's how the capital for the program works. But here's another part. You mentioned in perpetuity, or maybe I mentioned it. But somehow, in perpetuity. What do we mean forever? We're a 501(c)(3) organization. You're not paying us back. We don't collect any money in that regard. You're paying into what we call an endowment without walls for all HBCU students in the future. Here's the point.

Endowed scholarships and those kind of things are how schools close the gap many times on requirements and other for their students, as well as other school requirements. The smallest endowment at an Ivy League school that we could find is 2.9 billion dollars, the smallest of the endowments. We looked at 70% of the available HBCU publicly published data of endowments and some of our higher endowments, the ones that we're able to get, we still did not get a total of 2.9 billion. So there is a disparity in opportunity between some schools and our HBCUs. And there are a lot of reasons why, but this fund that they're going to pay forward after is going to pay back into this endowment without walls. And so long after I'm doing something else, some student at Tougaloo College down in Mississippi, who has made great progress in the areas of engineering or one of the sciences, will be able to close the gap. And most importantly, let's end participation in the Parent PLUS program. Let's stop strapping those who are economically distressed already with a loan that is obviously unaffordable. That's the vision.

John O'Brien: Well, the last part sounded almost like a policy change. And so I did a community Congress, the last one I did was with Paul LeBlanc recently talking about his new book, Students First, in which he similarly has some ideas about how the student financial aid model could be changed in a way that makes, to him, more sense. Are you also working to, as he was... He also used to work at the Department of Education. So maybe it's a Department of Education thing.

Mark Brown: Absolutely. You got a good point. So we work all elements of this. We do have a desire to influence policy with data. We are involved in a longitudinal study where all of this information we're getting, we're collecting in data. And yes, we think that a more systematic answer is due. And I'll give you an example. The Pell Grant is at a certain level, but the cost of college has risen dramatically more than the Pell Grant. And so, although the Pell Grant is being increased and we say doubled in some cases or that's the desire down the road, of the schools we've serviced thus far, students who have what's called an estimated family contribution of zero, which means when you look at the income of their parents, financially, it is not expected that their parents would be able to help them go to college.

And so they go to college, many times, first generation students. They still, after their federal financial aid award package, have a $11,000-13,000 or so gap in college. Obviously, the system isn't creating what it was intended to create if now, a person who is in a fragile economic position must borrow money to complete this. There's no calling home. I spent about a week in South Carolina, about three weeks ago, beautiful state of South Carolina. There are around seven or eight HBCUs within a 200 mile radius. We sat with students in focus groups, and we met with the leaders of those institutions. This wealth gap in America is real. And the ability of those students to matriculate through college has everything to do with the overall economic situation and the policies.

The last thing I'll mention is, way back when, when the first higher education act was built, 1965 or so, or one of the first ones, and we created Title IX, it was just coming out of Vietnam. There was a lot of division in the country. And part of what President Johnson, LBJ, wanted to do at the time was close the economic gap. And Title IX, financial aid, was supposed to do that. But the cost of college changed so much that the gap got wider and the social mobility was not created. So your point about the policy is exactly where we need to go for some of this is to the policy.

John O'Brien: So we're talking about gaps and wealth gaps and opportunity gaps. There's another gap called the digital divide that, at Educause, we've been tracking for a very long time, which is also a challenge. Is SFI taking on the digital divide at all?

Mark Brown: We believe that we are. Burning platforms, we talked about the financial burning platform. Another burning platform, if you will, would be that 82% of HBCUs are in broadband deserts. 82%. That means just about every HBCU is in a broadband desert. And so that's an issue. It's not a new issue, but when we had the pandemic, the issue was brought to the front line. Why? Because as some schools pivoted to virtual learning, to global campuses, those kinds of things, words that you've heard, other schools stop still because they lacked the connectivity to where their students are. That's a problem at our HBCUs. Now, we're very fortunate that we have partnered with a number of folks. And Educause, frankly, is at the top of that list. Because what we did was we tried to find the best in industry and said, "What can we do about this?"

We depended on you all for professional expertise, because you had a vision of this for all schools while we were working with a small group. You could kind of help us and coached us as you have in how to get through compliance requirements. And then we relied on industry for philanthropy. Just before I left the Department of Education, we issued an edict that said, "All schools will comply with the National Institutes of Science and Technology." It's a technical term, 800-171 is the numbers that go with it. But essentially, it's about 300 questions and requirements to secure your IT systems, campus cyber security. We said, "All schools must do it because the information that we sent to a school through the free application for federal student aid, as well as the Title IX funding, comes through IT systems." It's not news to anyone that those systems have been hijacked and the data held ransom in the open market, both in the education industry, but in other industries as well.

Now, Title IX funding comprises about 90% of some of our HBCUs funding, because most of their students are on Title IX funding. If you were to remove the Title IX funding from a school, you would essentially shut it down in many cases. They have to have access to it. Amazing philanthropy from Cisco, a cloud provider, ABC technologies, and the expertise of Educause has come together to make this offering. For every HBCU, unless that HBCU decides to opt out, we provide a gift where the cybersecurity requirements checklist will be completed. Once that checklist is completed, no matter where the school is, if they've started or if they haven't, a gap analysis will be done between the federal requirements and where the school is at. A build of materials will be done to fill the gap, software, hardware, whatever is required. The labor will be provided then to do the work, and then 12 months of maintenance past that date will be done for every HBCU. In other words, our HBCUs will have the opportunity to become cyber secure in this environment.

But more importantly, and where I think we certainly benefit from Educause, is we're looking for the long term solutions, the best practices in the entire industry. We're getting that from Educause. We're also getting other kind of professional development for the CIOs at those campuses, so that it's not just us completing a requirement, getting them to compliance and then going away in the sunset. But they have a long term view of how to do this and professional developments in their CIO shops. So we're with you on the digital divide. Very, very critical to what we are doing. And we think we've made some advancements on that. And the last thing I will say is that it's not just a theory. We're doing this, right? We're at our schools completing it in Texas. We're moving up the border there, having completed several schools in Louisiana. I told you we were in South Carolina completing agreements to do the schools there just a couple of weeks ago. And we will be doing the same thing in Mississippi right after the holidays. So we're off and running.

John O'Brien: Well, I imagine that the great work you're doing to help HBCUs become secure, you're also figuring out, back to that word "scale" again, you're figuring out ways to do that that help all institutions with some boat lifting that's needed as well. So I guarantee you we'll continue to partner with you to share the good stories that you've figured out. And in fact, talking to a couple of your institutions as we speak to do some writing to help show the rest of college and university sector what works. Because what works works for everybody, and there's certainly a lot to be done. It's my understanding that, as I've talked to CIOs from HBCUs, that their approach to technology is different from maybe the average. And one difference I've been led to believe, I'm curious if you see it too, is more of a reliance on outsourced IT resources. Is that a true statement? And if so, how does that complicate the task of making these institutions secure in perpetuity, let's say?

Mark Brown: Right. Kind of the way I would describe this is, again, I want to go to our partnership with Educause. Best practices and resources and tools is one of the prime things we get from Educause. So how, in a resource-constrained environment, do you build a CIO shop that can still do all of the compliance requirements and all of the update requirements as would a separate counterpart? That checklist that I talked about, it's the same for UCLA as it is for Tougaloo College. It's the same checklist, but the resources obviously are considerably different. And so what has happened over the years, as this issue of technology has taken on a different level of criticality, we see a hodgepodge of approaches. One of them is we don't have a CIO. We don't have a technology shop per se. We have the duties of, assigned under perhaps a vice president or a dean, perhaps.

And we rely on contracted support to do that. Well, here's the issue. And as I said, I've spent some time in the Air Force and I've spent some time in Department of Ed and we do a lot of contracting. And whenever you contract something out, there needs to be two people in the room of a relatively equal knowledge to ensure that what you are asking for, you will actually get, and that you have compliance over it to know what it looks like when you get it if it's what you expected to get. So while that has occurred, we still need to build up some of the organic abilities of the HBCU. So that, even if it is contracted out, there's a balance of expertise well enough for execution. Things like that we've learned, and I certainly want to credit Educause for this. Those who have gone to shared services and built a model like that seem to have been able to achieve the economic efficiencies in that, the budgetary efficiencies in that, without having to take less service.

And so we're exploring those kinds of things. During that 12 month period, I told you about maintenance. We're looking for what will be the governance model for this particular school or groups of schools that will take them well into the future? And it's not the same. So what will work in Orangeburg, South Carolina might not work the same in the metropolis of Atlanta, Georgia, right? I mean, there's going to be some differences, but part of what we're providing as a service is that advice, again, based on best practices and capabilities.

John O'Brien: One of the things that I find so inspiring about your approach is, as technology professionals, we are always very quick to tell a story that it's not just the technology, that that's part of it. It's technology, it's people, and it's processes. And I just heard that again and again from you that you're providing technology, but you also understand that it's the people and also that you need the processes in place to have this continue on and on. And I just think that it feels like that's a big part of your intentionality around this work.

Mark Brown: It is. And we started talking about the financial aspects. We talked about the technology aspects. But if we step back from both of those very important things, we're talking about a group of people, almost 300,000 students, who are incredibly talented that may fuel this economy in the future. And by that, I mean the national economy. The data tells us that our HBCUs kind of hit above their weight class, right? Despite all the things that I've said about their financial abilities and what they have, they represent about 3% of all colleges and universities. But as an example, they produce 40% of the engineers.

So think about it. We can't stand to lose this capability. 17%, I think, of all Black bachelor's degrees come from HBCUs. But somehow, 50% of all Black lawyers have an HBCU background. They fight above their class. 24% of STEM majors, but 80% of all Black judges. So there is a capability that the nation has that we believe we're going to help unleash and make even better by things like the IT infrastructure upgrades, the bringing of 5G capability, the elimination of broadband deserts. This is a national treasure, and we believe we're going to help unleash it for the economy and for the nation as a whole.