Regulations, Gainful Employment, and Licensure

Yet another episode where I crash someone else’s podcast!

James Cryan, CEO and founder of Willow Education, invited me back on his podcast for his excellent Substack, Purposeful Paths, to reflect on my predictions from last year and to make forecasts for the coming year.

Our conversation dove deep into topics like the slow momentum of apprenticeships in non-traditional sectors, increased emphasis on experiential and work-based learning, pressure mounting on traditional colleges amid demographic changes, and the realities behind skills-based hiring. We discussed policy shifts, the impact of AI on career readiness, the role of community colleges, and potential regulations around social media and AI for young people. A lot in other words.

But most importantly, perhaps, we held ourselves accountable for our predictions last year. Check out how we graded ourselves and let us know your thoughts—and predictions.

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Michael Horn

If you’ve ever been annoyed by people who make predictions about what’s to come in the year ahead around January in education, and then don’t hold themselves to account for the predictions that they made, this conversation is for you. Look, I know a lot of you have probably been annoyed with me over the years because I love making those predictions often. But in this conversation, James Cryan, the CEO and founder of Willow Education, holds me to account. This comes on the heels of a conversation that the two of us had last year where we went over predictions we had for 2025. And in this conversation that you’re about to hear, recorded with a group of other people on a webinar that James hosted me for, we go over those predictions from 2025 and give ourselves some grades. I’ll give you a quick heads up. I was overly harsh, I think, on my results. I think I did actually all right overall.

And then we talked about some predictions to come for 2026. See what you think. Can’t wait to hear from you and enjoy the conversation.

James Cryan

Well, let’s get started. This should be fun. Michael, thank you for joining me again. You’re— I think I told you this, but you’re our first ever repeat guest. No one will ever be the first ever repeat guest to the—

Michael Horn

Oh yeah, that’s pretty good. Okay.

James Cryan

Virtual Conversation Series. So kudos. Kudos to you for that accomplishment. I hope that comes to the top of your resume quite quickly. If folks don’t know Michael, A, I’d be surprised. And B, Michael, you’re just one of the most forward-thinking, prolific thinkers about the future of education and workforce and keeping on top of all the trends, research, and people and companies who are doing really interesting and fun work trying to transform education for the better in our country. So thank you for joining us. And if you don’t know me, my name is James and I’m the CEO and founder of Willow Education.

We are a career readiness platform and curriculum that school districts use to support their young people in developing purpose, in exploring and experiencing different careers and work-based learning opportunities, and then making a high-quality post-secondary plan. And our big innovation, and it’s kind of silly to call it an innovation, but we’ve got two innovations. One is we are highly opinionated about the quality of next steps and programs when we project a personalized ROI for each young person. And two is we serve all students. We serve the kids who are going to college like everybody does, and we also serve the students who choose not to go to college after high school, which right now very few forums and curricula do. And so that’s kind of the day job, and the fun part of my job is I get to have conversations with leading thinkers like Michael on what is, what can we do to realize the American dream in our country? What can we do to make sure that everyone who works hard has the opportunity to have a good life, meaningful work, buy a house, raise kids in the city? Not, not many of my students in Denver were able to do that through the current post-secondary pathways that exist today. And so we need to do a much better job at both preparing them for what programs are working and preparing them to have the skills to do so. And so, Michael, last year I asked you to come on and make some predictions and share your thinking about what you expected for the year ahead.

So we’ll start there with your predictions from last year and give you some grades on those. And then we’ll move into predictions that each of us have for this coming year, and we haven’t shared notes and so it’s gonna be a live conversation. And I think I’ve made at least one prediction that I know you disagree with, so I’m gonna be excited to dig into that with you.

Michael Horn

Awesome. Okay, that sounds juicy, and I like that we’re doing this. I’m going to confess I’ve done a lot less thinking about the year ahead, and I was super nervous about what I said last year and so I think I hold up better than I thought, but we’ll, we’ll see how people feel as you go through it.

James Cryan

Well, I gave you some grades this morning. I was preparing as well. And I think that there’s a risk that, uh, you weren’t bold enough in your predictions. So I’ll encourage that for this coming year.

Michael Horn

Fair enough. Fair enough. Good.

James Cryan

So, anything to add at the get-go? Anything I missed from your, your story and your bio that you’d like to—

Michael Horn

No, I mean, I’m excited for the conversation. Last year when we were all talking around, it was a great group and we got into a really interesting conversation around Career Connected Learning for all, and really the notion that CTE or voctech, as it were, was historically a tracked thing and more that this is a menu, right? And a set of experiences we want all students to have so that they can make an informed choice around, is it college when you leave high school, is it something else? And that they understand what that means for them and their likely path. And it’s not something that sounds good on paper, but that they actually really understand what that’s gonna look like, right, in the journey ahead. And we want a lot more individuals having that set of experiences. So it was a really interesting conversation. I changed my language, uh, around the space because of some of the contributions from folks. So I’m excited to dig in again.

James Cryan

Absolutely. And that’s a good reminder, for some norms here, the risk of webinars, or my preferred language virtual conversations, is that they’re boring.. And I get the need to grab lunch and maybe go off video, but I encourage everyone to like, let’s make this a conversation. Let’s have fun and dig in together because we’ll have a richer and more fun, engaging learning experience if we do so. And that was the case last year.

James Cryan

So Michael, last year you made 4 predictions. That there would be growing momentum for apprenticeships, particularly in non-traditional sectors like healthcare.

The second prediction was there’d be an increased focus on work-based experiential learning at all education levels. Number 3, less linear education to career pathways would become the norm. And number 4, there’d be continued pressure on traditional colleges as students seek alternatives. Let’s take those one at a time. Growing momentum for apprenticeships, particularly in non-traditional sectors. What grade would you give yourself here, Michael?

Forward– But Moderate –Momentum on Apprenticeships

Michael Horn

I honestly, I think it was, I would put it not an A, if you will, on this one. Like it was, I think it was less momentum than I expected. If you count the January Department of Labor adding the, what is it, the $145 million in funding for pay for performance, if you count that in 2025, I look a lot better on this one, but I would say by and large momentum along this axis, James, at least my take is that it was more talk than action in ‘25 and that it did not materialize the way I thought that there could be some bipartisan opportunities on this. So, you know, I frankly coming into this, I was thinking, ooh, it’s like a D. I think it’s a little bit higher than that because again, sort of the, the April executive order preparing Americans for higher pay, high-paying skilled trade jobs of the future made way for the January funding announcement. But I think we’re still talking probably like C+ or something like that is where I, is where I would grade me. What did you do on this one?

James Cryan

C+? Okay.

You were a little more negative than I was. I think it’s helpful to remember that we were expecting a lot from the incoming Trump administration when we made, when you made this prediction and thinking that there was going to be a lot of momentum out of the gate for apprenticeships. And like you named, that did not materialize. In fact, the opposite materialized. And but there’s been a correction since then and there’s been some interesting work at the state level. California announced $30 million in apprenticeship funding focused on health care and education. I think this is going to be growing, but the point you make resonates for me, that, a lot of talk and not a lot of this yet, resonates.

So I had this at a B, to cut to the chase.

Michael Horn

Yeah, frankly, I was going to be at the B until, you, you sort of foreshadowed that maybe I sandbagged on the predictions a little bit, so I thought I’d go more negative on this one. I think the point being though, right, like, this is an area where there’s, you know, you Governor Newsom in California, you have the Trump administration, a lot of bipartisan interest in increasing apprenticeships, a lot of— it’s a little wonkier, but a lot of interest in apprenticeship degrees as well. And it’s not— I think, you know, $145 million, that’s a start. But if you put it in the context of how much we spend on post-secondary education in this country, even the state numbers added— and yes, Indiana has continued to make progress. And so there are some absolutely bright spots. Colorado has continued to make progress, etc. South Carolina and some other places. But by and large, I would say, you know, we are still at the fringes of tiptoeing into this world and not where I think I had expected some bigger announcements would come out.

I would’ve expected as even part of the One Big Beautiful Bill Act where there were some big overhauls of higher ed and really, you know, creating a new, playing field for gainful employment definition across the field in essence, I would have expected some more movement on this front and we didn’t get it.

James Cryan

Yeah. What’s the missing link here? What’s the lever that needs to be pulled? Is it just money or is it more complicated than that?

Michael Horn

Well, that’s a good question. I mean, I do think that there is— more money is part of it, right? You need performance pay that I think follows the student into the experience and de-risks it for the employer. I think that’s a critical piece of this. But then, as you know, we’re going to have to have a lot of intermediaries build businesses and frankly, a lot of culture change around apprenticeships in general. It is interesting. I was having a conversation with someone in this movement and I sort of asked, I was like, I don’t understand why we think that industries at the moment should be registering for the federal apprenticeship because there’s no upside to doing so really, unless there is actual funding tied to it. And so from my standpoint, a lot of the stuff that’s occurring on the margins in the informal space makes a heck of a lot of sense. We don’t tend to count it, if you will, in the apprenticeship number, but I think that makes a lot of sense.

But to really make it a movement, I think you need funding that makes it worth it to put up with the regulations and so forth to get into this. Otherwise, I just don’t think the incentives are there for the intermediaries to materialize. There’s a reason why Multiverse completely pivoted away, right, from their apprenticeship strategy that had been so successful in the UK when they came into the American market. What about you? Because you’re spending probably more time connected to the space.

James Cryan

Honestly, I’m not an expert here, so I don’t know. I think the thing that scares me is the complexity and complexity without funding. It just seems hard to figure out. And if it’s not simple and clear like why employers are engaging here, and it’s actually connected to one of my predictions that I think we both agree on, then I don’t expect behaviors to shift much.

Michael Horn

Yeah. Let me say one quick thing on this, which is Ryan Craig always reminds us that in education, we tend to call them employers, but they’re really companies that happen to employ. I think it’s an important thing because when we say employers, we act like they’re mission is to employ. They employ so that they accomplish their mission. And I think sometimes we forget that human capital is, I would argue, the most important thing on their balance sheet and in their organizations. But they don’t necessarily see themselves as human capital development organizations. So to your point, complexity scares them, risk scares them. They’re going to retreat from things that aren’t obvious ROI in the short run.

And I do think there’s a larger need to reduce friction to experiential learning. It’s why, you know, we like efforts like what Jeff is doing, for example, when he came on here is important, I think, to make this much easier for companies, government entities, nonprofits, whomever, right, to offer experiential learning opportunities. And there is like a finite pipeline, right, of how much you can even have in terms of how many spaces can you really absorb in a lot of these things. This is not infinite, if you will, and so there has to be a range of experiential learning opportunities offered, I think, to students.

States Driving Work-Based Learning

James Cryan

Yep, good point. Okay, let’s keep moving. Second prediction from last year: increased focus on work-based learning, experiential learning at all education levels. So it’s a pretty good segue from that last point.

Michael Horn

Yeah, I mean, obviously this was a building notion. I, you know, in terms of dramatic policy changes, not huge, but I do think in terms of momentum in the field, this was pretty good, probably a B+. You can look at Colorado and Governor Polis there. You know that state well. Executive order to, you know, really reorganize the state’s talent development system around a lot of this. Massachusetts has continued to lean into some of these areas. California, you mentioned, but they allocated an additional $64 million around CTE programs. Alabama has done a lot around this, obviously Indiana with the apprenticeships, but frankly, larger experiential learning in the other diploma that has become more concrete now for high school students.

So you can look at a lot of these different states. I think there has been continued momentum and interest around this movement. And if you look at folks like the CAPS Network or places like that, they seem to be growing. I always talk to our friend Andrew Frischmann at Big Picture Learning, and I say, this is the moment your network was built for. In many ways, you guys were 25 years too early, and now is the time, right, where a lot of the things you’re doing are growing into it. And so I think those aspects are pretty exciting. And so I’d say we certainly have more room to go, but, but I think I would give it a B+. The other piece I would say is I think because of AI in the workplace, and even if frankly the pullback in entry-level hiring is overstated because of AI, as I think it is, it has caught enough people’s attention to realize schools need to be providing real-world experiences later on in the journey so that students who graduate when they’re applying to that job can say, I have 2 years of experience of X already.

Right. And I think that’s a growing recognition. It almost feels like a truism now in the field, and that seems like a big plus in this favor. What about you?

James Cryan

Yeah, I agree. I had you at a B+ on this one as well, for a lot of the reasons you named. I can’t remember if it was last year or the year before that Burning Glass and Student Strada put out the Talent Disrupted report that found that college students who had an internship were almost 50% less likely to be underemployed after graduation. So many good partners on the call who are doing work in work-based learning, education to career pathways work. Dr. Danelle Letler, any additions from these first two predictions?

Dr. Danelle Letler

I feel like you’re grading Michael very well. I like this. I was expecting you to be much harsher on him. Clearly, Michael, being a return guest gives you some love. Gives you some love. That’s good. Keep it going.

Michael Horn

I was going to say either a victim or a beneficiary of grade inflation.

James Cryan

I’ll take it. Awesome. Well, I hope— and there’s lots of other great partners on the call who do really powerful work-based learning work. We’re learning from a lot of them, including Big Picture Learning, like you named, Michael. I’m going to skip the third one because it’s very similar. Less linear education and career pathways becoming the norm. And let’s go to the fourth and last one, Michael. Continued pressure on traditional colleges as students seek alternatives.

Continued Pressure on Traditional Colleges

Michael Horn

Yeah. Well, I would say I think it’s depending on whose count, you know, somewhere around 16 or so colleges closed in ‘25. You had a bunch of mergers, the merger in Pennsylvania State branch campuses, you know, fully, fully going to be happening in the year ahead. And so I would say it was a little bit less closures, I think, than the year prior, but growing. And the demographic cliff is now here. So I think we’re really about to see a lot of retreat. Obviously, in December or maybe it was November, I published that piece looking at 44 mid-sized private colleges and I’ll give this group a tease. We’ve now expanded that to roughly 315 private mid-sized colleges across the country.

And so this was a group that I wasn’t thinking of originally when Clay Christensen and I made that prediction of a quarter of colleges would consolidate. I was thinking largely of the frankly small colleges under 1,000 students, the regional publics that we’ve seen merge and for-profit institutions without big brands and tuition dependent. But there’s a lot of schools, you know, 500 or 600, I think, that enroll somewhere between 1,000 and 8,000 students, very tuition dependent. A lot of them are strong brand names and they are in a world of trouble. By our estimates, a good third of them will have challenges with financial solvency over the next 5 years, call it. And so look, the overall prediction is still going in the direction. I think the world of hurt is really going to materialize over the next 3 to 5 years on this one. I’m not sure how to grade it.

It’s a little bit true— I think I’ve used this prediction, frankly, like 3 different years I’ve made predictions. And every year you look pretty good on it when you look back on it because the pressures are just mounting and colleges are, look, everyone believes it’s not going to be them, that they will be able to pull a rabbit out of the hat. They won’t have to downsize. They’ll be the beneficiary of some other college closing. It’s interesting, of the 44 that we looked at in New England, 38 of them in their strategic plans list growth as their primary strategy for dealing with this. And growth ain’t going to happen for most of these places that are serving traditional age students, number one. But number two, a lot of them, I think, believed that they could launch online master’s degree programs.

One of the things that came out of the one big beautiful bill, is that gravy train is done, I think, with the caps on grad— or the elimination of Grad Plus and the caps on non-professional programs and even professional programs. And so, I think if you thought you were going to just simply scale into lifelong learning through those mechanisms, that’s not not available to you anymore. You’re going to have to be a lot more innovative, which means you need to have cash on hand, I think, in many cases. so I think it’s getting bleaker, not better, for these, for, for a lot of schools that have not taken steps or thoughtfully focused in the past few years. Where do you have me on this?

James Cryan

I give you an A- for this one. DB, I don’t know if it’s inflation or not. But, you know, one part of this prediction that I hadn’t thought through is, Michael, you and I are friends with a college president who leads a small private institution that does great work, and he’s a phenomenal leader. And over the summer, he saw a third of his freshman class make a different decision, his enrollment, just kind of cratered in that freshman year. And so as we encounter the demographic cliff, I think we’re going to see a lot more fluidity amongst institutions as they compete for students. It’s going to get pretty tough out there. And we can think about analogues from— I can, I can think of analogues from seeing declining enrollment in K-12 scenarios and how students move between different K-12 options. That’s interesting.

The competitive pressures that exist there.

Michael Horn

And I will say that same friend of ours without naming, I would say, you know, one of the things that we talked about was he was saying like, I have to have an English department, but no one majors like 2 people major in English a year, if that. Right. And, and I was like, you know, this is where I think course sharing, like people say, what are measures short of consolidation, what can I do? And this is a place where I’d say tenure makes this hard in many cases, but I don’t know that I would be carrying a full roster of faculty members in particular departments that are under-enrolled. And I would still make those classes available through partnerships with other schools that have similar mission focuses and things like that using online. That seems like, you know, to really downsize and focus on the things that make you valuable and differentiated. And I think they have a very good value proposition in a lot of things, which is something that I would be wielding a little bit more aggressively to right-size the cost structure of some of these schools. Because I do think if you could reduce some overhead costs, use AI to become more efficient on some of those, and then focus a little bit more academically and stop treating those as fixed costs. It’s a way to, it’s a way to deal with a very different environment.

But look, higher ed’s never— none of the leaders in higher ed in our world have ever managed in a time of shrinkage, right? It’s been growth, since at least 1965, and arguably since the GI Bill, right?

James Cryan

Yeah.

Michael Horn

So they just haven’t managed, you know, they’ve had 2-year blips, right? But they’ve never seen a 15-year trend line, a structural one that’s about to come out.

James Cryan

Yeah, yeah, it will be interesting and challenging, I’m sure. Okay, well, let’s turn our attention to this year.

Michael Horn

Yeah, do you want to start with yours? Let’s start with yours. Yeah, okay, so I’m admitting I’ve done less homework on this. Yeah, okay.

Entry-Level Hiring Challenges

James Cryan

Well, I’ll start with my first one, and I’m very curious how you see this. I think the entry-level labor market is going to get worse, not better. I think there’s a lot of attention on AI’s impact in the entry-level labor market, and I think we can find data that supports that conclusion. I think what we don’t talk enough about is that the economic uncertainty and trade policy contexts that all companies are existing within right now is having a significant impact on the labor market. And then secondly, just especially with tech companies, they’ve learned that they can continue to thrive and grow with fewer people, which some is somewhat AI related but is not entirely AI related. So I would expect that the entry-level labor market is going to get worse over this next year. I’m sad about that and it makes all the work-based learning and career readiness, uh, conversations all the more pressing and important from my perspective.

Michael Horn

I completely agree on this. In some ways, I think debating the causes distracts from the headline, which is right, that entry-level hiring is, as we’ve known it, is shrinking. The expectation increasingly is that someone coming in as an entry-level employee is performing at year 2, 3, right? If someone in the industry, which requires a set of experiences, requires a certain understanding of cultural norms. This is where the durable skills conversation enters the picture, etc., etc. I think all those things become more important. And, you know, people sort of throw up their hands and say, how are companies expecting to fill their talent pipelines? And look, from my perspective, this is something that favors those that are well off and have good social capital, which is why education organizations need to provide this, because otherwise this is a clear opportunity where people will get left out of the equation and it will be on very unsavory lines that this— that people get left out. And so I completely agree with the observation. I do think, for what it’s worth, that the macro environment is a big piece of this.

And the other one I’ll add is I think there was a lot of overhiring during the pandemic for tech in particular. It makes up less of a share of, you know, labor than people sometimes think. But look, if AI, if some of the circular nature of this, if that dries up in any way, if there’s any sort of a bust there, I don’t think that’s going to happen in the next 12 months. But I suspect it will happen at some point. That’s going to be a crushing blow to the entry-level employee, even more so than what we’ve seen.

James Cryan

Yeah, I totally agree. Some, some room for optimism. We do see entry-level roles growing in low AI exposure fields like healthcare, skilled trades, specialized services right now, and I would expect that to continue. The other thing we’re talking a lot about internally at Willow is AI fluency is career readiness at this point. I can never imagine hiring someone without an expertise of how to use AI tools and a deep desire to learn and get better quickly with those tools. And so that’s something we’re thinking about— how are we integrating that into our curriculum with our partners.

Michael Horn

Makes a lot of sense. Makes a lot of sense. And I think you’re seeing, in a good way, like Purdue, other places, right, requiring AI to be part of the graduates portfolio in a variety of ways. And I think that’s a positive trend. Pace University is another one that’s done this, like at different ends of the higher ed spectrum. I think schools that lean into this as opposed to run away from it will be— that’ll be important. And I guess I’d say like there’s this whole education policy debate of banning AI completely from schools and things, right? Sort of the Andy Smarick view. My own take is like, this is the classic DC Beltway wishing things were different.

And the reality is that first job, they’re not like thinking about, is AI taking cognitive load off or not? They want to know, can you use it to be better at your job? And so In particular, it might be worth scaling AI back in certain academic applications, but in terms of a tool to do real-world work better and learning how to integrate it, it seems like this has to be a big piece of what— of the curriculum as we develop.

James Cryan

Yeah, absolutely. And I said we’re talking about it and thinking about how to integrate it. And then I recalled that Jamie earlier today, we’ve built out an AI fluency quest, which is what we call mini units. And we were piloting it with one partner and a different partner heard about it and called and said, hey, we want to pilot that too. So they’re already— it’s already live in classrooms today with some of our partners. You know, you know, I live in Middlebury, Vermont. And so every year, even though I didn’t get into Middlebury when I was applying to college, I still leave the campus and lecture in their entrepreneurship class each year. So I did that a couple of weeks ago and some students asked like, what should we do? What should we do to get ready for jobs? And, you know, how should we be thinking about AI? My advice, and I’m curious if it resonates for you, was to use it every day.

Use it to think harder. Don’t use it to cheat. Like, think— use it to think harder and learn stuff and then use it to build stuff.. And that was kind of my simplistic, simplistic take on how we’re framing and thinking about how people can prepare to be successful in this context.

Michael Horn

Yeah. One of my former students, he graduated last year from the ed school at Harvard. He started a couple AI companies in the last 12 months.

James Cryan

As you do.

Michael Horn

And as, as you do. One, he was actually, it’s featured in my Substack yesterday that went out, this M7E thing that basically will help curriculum publishers make sure that the text around math problems are not interfering with multilingual learners’ ability to access the actual mathematics so that you’re actually testing their comprehension skills or verbal skills as opposed to the math that you’re trying to do. It’s a very interesting application. But he wrote a book which he’s going to self-publish. And what’s interesting is the big argument he makes is that the way you learn in the future and test hypotheses is by building. And because AI has made it so simple, the reflection I had when I finished reading it was, man, like I’ve always said, I write to figure out what I think about something. But here he’s making the argument, in fact, you should build to figure out what you think about something because you are going to get so many feedback loops about where your thinking is wrong. Whereas like in writing, you can construct these nice, you know, it’s hard to, you know, it forces you to deal with logical fallacies in your argument, but not necessarily how that confronts the real world.

And building something will do that. And I thought, That’s very interesting that building is how you learn about a problem and think through something. And a bit of a pushback on those like me who’ve said, ah, writing is how you think about something.

James Cryan

So I love that. I think I’m a little bit old school with you that I kind of don’t fully internalize and learn something until I’m writing about it, which is why I try and carve out the time monthly-ish to write my Substack. And, you know, in our product meetings, 6 months ago, we would look at Figma designs for how we were thinking about new features. And today we look at prototypes that are interactive and you play with and we get feedback from our educators and our counselors and our students on it.

Michael Horn

Exactly. You test your assumptions in real time. Life is not always rational, right? There’s emotional and social reasons that people like or don’t like something, and you learn from it in the real world. I think it’s a really interesting— I’m sure there are a certain set of problems that are better for building, and there are a certain set of problems— like, there’s a circumstance context thing here, I suspect, but I haven’t thought that through yet. The point being, the barriers to building are much lower, and that is an opportunity for learning, I think, is a huge point that I had not thought about.

James Cryan

Hmm. I love that. Okay. Do you have one that you want to share?

Regulations, Licensure, and Workforce Bottlenecks

Michael Horn

I was going to say to go a totally different direction, which is I’m going to do a classic sort of canary in the coal mine argument, which is that because of the new regulations around these gainful employment measures and so forth, that effectively, as I see it, are going to mean that cosmetology schools, So I’m going very specific part of the economy. Effectively, almost none of them are going to be allowed anymore under federal financial aid rules. They’re all going to fail the earnings test, I believe, or do you make at least what a high school graduate does? And as a result of that, my take is that states are going to have to radically rethink licensure for those roles if they want to not have a dramatic shortage in that profession. Now, here’s the question that I don’t have the crystal ball on. I think they ought to be also having these conversations in health jobs and nursing and like figure out ways to unstick the bottleneck that has occurred in training and practicums and things of that nature in those professions. And they haven’t really done it. Will this, you know, be sort of such an obvious new area that it’s the regulation that is now creating the bottleneck, that it will force a conversation to be had in some measure? Or will, like, we just accept that there’s no new people getting trained or that they’re self-paying, right, into these licensures? I don’t know the answer to that, but I think it’s going to force a conversation. And I think the ripple effect of that would be healthy across states that have created increasing numbers of certification requirements to practice certain fields that probably not all of them need those regulations and requirements in place.

James Cryan

Fascinating. It’ll be like primary care doctors where there’s not enough residencies.

Michael Horn

And so, yeah, exactly. I mean, right there, it’s a constraint in terms of supply, right, of places to pump through. Alison Salisbury just did a fantastic set of work around some of these shortages in the nursing space, for example. Look, you don’t expect, nor do you want, I think, licensure rules to go away for nurses and doctors. But I think a dramatic rethinking in some of these other fields like cosmetology would be welcome. So, and there’s a whole bevy of them in lots of industries that have held up hiring and created these shortages. And I suspect we’re overdue for a pruning of those regs or rethinking of them.

Gainful Employment Measures

James Cryan

Well, personally, I hope you’re right because those are not worker-friendly regulations in how they show up. And cosmetology schools, I forget if it’s 91 or 92% of the time, have a negative ROI on the investment, which is why they’re not holding up to the gainful employment laws. Are you bullish on the gainful employment exercise?

Michael Horn

Net-net, I think it’s a positive step forward. I’m with Phil Hill, that I think regionality as opposed to state-level metrics would have been a better idea so that we acknowledge the variance, if you will, of salaries in a rural part of the state versus an urban part, for example. Right. And so the blunt tax has been a little bit too blunt. I wish out of gainful employment— I get why they did one regulation to harmonize with one big beautiful bill. I think if it were me on the— like I had my druthers, I like an ROI focus on things. And so I would like a return on the investment, not just like a minimum floor that you have to clear, so I prefer— I didn’t love debt being the only part of the investment equation.

Like I would actually go further than that and look all in cost and I would do it both with the government dollars and with the self dollars, but, you know, so I would probably go more, but Net-net, I think this is a positive step that we’re taking toward a do-no-harm stance. Yep. What about you?

James Cryan

Yeah, I agree with all that. What you described for the ROI calculation is exactly how we do our personalized ROI projections on our platform for students, is we project their net costs and then take a 10-year view of will they be better off 10 years later or not, if they graduate from the program.

Michael Horn

Which I think is the right way to think about it. Look, let the families decide. I don’t have to optimize for, you know, ROI per se, but if it’s negative and I’m not in a family circumstance where that makes sense for us, like, that’s a severe red flag that I would steer away from.

Social Capital Driving Hiring Trends

James Cryan

Yeah. Yeah. Our belief is informed choice and, and a value of being honest with young people. Because they don’t have that data and information today when they’re making decisions. All right. Prediction number 2 from me. Our chat’s a little quiet.

I would invite folks into the conversation. So, and feel free to come off mute. This is the one I know we agree on. So maybe a little less exciting. All right. I’m pretty sure we agree on. I think skills-based hiring is going to face a kind of more public reckoning this year. We know that it is not working in practice.

It’s a lot of lip service. It’s not a lot of behavior change. Only 1 out of 700 hires benefited from skills-based hiring practices from Burning Glass Institute. Like, I’m fairly smart. I just— it’s too hard. It’s too complicated. And the incentives don’t align for employers or companies, to your earlier points. And it’s like the right aims and the right goals but it is— you said like this is too wonky.

There’s a group of funders and policymakers who got together to say, this is a real problem, like, wouldn’t it be great if this world existed? And it would be great, but it just doesn’t.

Michael Horn

Yeah, I’m 100% with you. And I think on the show last year, I came out very hard against this practice because it’s divorced from reality in my view. And then I used the transcript of that to write a piece about why I thought that.

James Cryan

So thank you. Oh, really? Oh, cool.

Michael Horn

Yeah, I missed that one. So, I mean, look, I have the same view. I think this bleeds into another prediction that I made last year that I think will be even more true this year, which is social capital is going to gain in importance for hiring. Based on the conversations that I’m having, there was a huge leap last year in applications for job openings, and it’s gone up even higher now. AI is just making that harder and harder, and people are more and more looking at their network to find qualified individuals that they believe actually have the background and experiences. Look, I know a lot of people say, look, AI is going to solve large parts of this and create a realistic skills-based hiring. I just continue not to see it at the moment. And so I continue to be skeptical.

This, this is one of mine, frankly, as well. So we’re on the same— this one we can line up and say. Now, last year, I think I said experience-based hiring would increase. Mm-hmm. Not sure that has happened as I would think about it. I think more people are thinking about what that might look like. I think we need more maturation of the experiential learning we just talked about on the education side for that to become any sort of reality.

James Cryan

Yeah, agreed. Okay, so we’ll call that one shared prediction number 2. That last year, I feel like when we talked about this, it was a little bit kind of quiet, like, I don’t really think this is working. Like, do you— like, what are you seeing? And I think this year we’re gonna get even more public with it, and I think maybe Um, it’ll be interesting to see where we go from here. I just want to call out Jeff in the chat. Um, yeah, important counterexamples of where this is needed. Uh, one is like the tightest labor markets, like healthcare, um, skilled trades, uh, veterans, and how to qualify and understand veteran skills and through their experience, I think is a super important application of this work. Uh, Jeff, you want to speak any more to that?

Bridging Gaps with Task-Specific Skills Training

Jeff

So yeah, we actually just started, at the beginning of the— well, actually last quarter of last year started testing. We now send all of the participants to any of the lab programs, whether they’re directly operated by us or like the Vanguard Rising program is a branded solution that we run for the Ascend Collective to kind of meet their target audience where they are. But we’ve started sending all of our participants, and where their approach to skills-based hiring is kind of our approach to kind of helping close the gap that you were talking about with the government coming in and kind of supplying and supporting the apprenticeship programs is we’ve looked beyond the government to solve this problem, and we’re looking to the people who are really suffering the most, which happens to be businesses, to solve the problem by saying, look, we know you have an internal learning and development program that you spend a lot of money in once you hire people, and that traditionally you may have relied on education to prepare them before you ever hire them.

Clearly, the gap between education and employment has grown. The gap between, you know, employment and workforce development has grown. The gap between, you know, community economic growth and workforce development and employment has grown.

So we have developed a system that kind of sits at that juncture and kind of brings those parties together where it’s like, send us your people who need their training, bring us the work that you need them to get trained on. We’ll give them the durable skills training that industry is spending billions of dollars on, lean system thinking, how to automate, all these things that in my professional career I did for 25 years, right? This is what industries are training in their learning and development programs.

The fact that no one’s teaching it in education was a shock to me. The fact that education teaches these behaviors out of our students was a bigger shock to me.

Michael Horn

Thanks, Jeff. I think, Jeff, it’s a great set of points. What seems critical there, right, is you’re training on the actual tasks that people right and, and work that they would be doing. I think part of the challenge on the skills-based hiring movement is we’re not sure what it means, right, a lot of times, right? So you called that a skill. I think for a lot of people, they’re like, oh no, the skill is like learning how to think critically. I don’t know what that means. It’s like, it’s very different from context to context, right? And so you used a phrase, durable skills, for that. I think most people would call that, you know, of those fields.

And people use durable skills differently in many cases.

Jeff

So we actually, we don’t in our context. Durable skills are the critical thinking, systems thinking, the things that regardless of the industry, the sector, the role I go into, everybody needs to learn how to do. How do I collaborate? How do I take a complex problem and start breaking it down into small little pieces so that although I can’t figure out every step, I can figure out the next couple of steps, which when dealing in complex problem solving, I need to be able to move, sense, adapt, and then plan. Different set of skills.

But we’re also having students come in and go through a program where they learn those durable skills, but they’re going on to be electricians, plumbers, right, because those skills— doesn’t matter if you’re sitting behind a keyboard, you’re sitting behind a steering wheel, you’re sitting behind a forklift, it doesn’t matter. You need these regardless of where you go.

And then we back them and wrap them in professional certifications that we give the participants as they head out the door so that the employer can see, you know, we connected in an LER record. They can actually see the work that was done

Michael Horn

Well, and that’s the critical piece I think that you’re doing, ‘cause I will confess, I am much more skeptical that those teaching of skills transfers between different domains unless you’ve done the domain training. My read of the evidence is consistently that they don’t transfer. And so that’s why I think you being able to wrap it in a context makes it valuable. And then look, if I’m able to take that and learn something new and be able to use that process fantastic, right? That’s the ideal. Most experiences don’t do that well. And so when we use the word critical thinking, of course it shows up in every industry’s job application. It’s sort of a truism.

Of course I want people who think critically on the job, but how I think critically in one environment manifests quite differently in another. And so that seems to be the magic to me of pairing it.

The Role of Community Colleges

James Cryan

Yeah. Great, great addition. Thanks so much, Jeff. Thanks for your important work in South Carolina. And connecting to Sophia’s question here around community colleges, how do they fit into the future of education and purposeful pathways? You know, Jeff, when I heard you describe your work, I thought of the Education Design Lab, which partners with community colleges around the country to work with employers and students and educators to align what student— what programs are being offered and what students are learning to real-world needs in the local labor market. Love it, Jeff.

Michael Horn

I’ll say just to Sophia’s question, I think actually community colleges are extremely in the conversation at the moment in the sense that, again, the short-term workforce Pell conversation just dramatically brought them in with a funding pathway for these short-term certificates that are 8 to 15 weeks. So I think they’re, they’re being brought in in a dramatic way. I do think community colleges, they have 3 competing missions as I see it. One is academic transfer, a second is the workforce engine, and the third is sort of general community enrichment. And my read is that all those missions are not complementary. They actually work against each other in optimization.

And I think more community colleges need to make a clear bet on one of them. The workforce is where I would make it. But, but that actually means, you know, college gen ed English is not going to be as important. That’s a very— that’s a big design decision, right? That has a big impact. And I think it, a lot of community colleges struggle to optimize on the workforce piece of this because they’re sort of having these priorities play off each other as opposed to clear optimization. And that’s why I think the outcomes are not what we would hope for from a lot of community colleges.

James Cryan

Can I have an honest admission, a moment of kind of vulnerability here? I really struggle to think about the answer to your question, Sophia. I— the completion rates of community college programs are so abysmal, I have a hard time recommending students that they pursue those as next steps. Usually that’s not true for every community college system, obviously, but the majority of time that’s true. And on the other hand, two-thirds of students from low-income households that are enrolled in higher education are in a community college. So they’re obviously serving such a huge equity function for our country. And the majority of students from low-income backgrounds are going to community college. And so I really struggle to think about how to navigate that and think about that from a student navigation and advocacy lens.

Sophia

Yeah. And if I may, hi, I’m Sophia. I took myself off of mute. Hi. I feel like I’m in a very unique position because I used community college to get to a place like Harvard. I’m from a low-income community, but I also used community college to get my medical assisting license, which I didn’t end up doing anything with. But I don’t know, I’m kind of delusionally optimistic where I feel like we can bridge this.

It just hasn’t been done. And I just feel like I’m a little bit relentless right now to see. I don’t know, I feel like sometimes it’s too easy to say we can’t do things like workforce transfer, community engagement, right? So I’m trying to figure that out. And I do tell students to go into community college. Of course, it’s not perfect, but I definitely feel like it’s something, at least in California, that’s thriving and that students are asking a lot about because, yes, affordability is real. But yeah, I just want to appreciate you guys for answering those questions. And yeah, I am a CC advocate and I do tell people to go into it because of course I’m an exception right now, but I shouldn’t be. So just trying to figure that out. But yeah, thank you guys

James Cryan

Well, the world needs more delusional optimism and tenacity. So I’m hopeful for the future of whatever future you’re a part of, and I hope it’s a big one. Check out Education Design Lab if you haven’t seen that, and send me an email later and I’ll connect you to a member of their team if you’re interested in learning more about their work.

Michael Horn

I want to hear James. I know, Jeff, you had a question, but I want to hear James, your last one that you say we’re going to disagree on.

Smartphone Policies in Education

James Cryan

Okay, yeah, this is— I’ve got two controversial ones potentially. The last one I think we disagree on is I think 10 countries will follow Australia’s lead and ban social media for students under 16. I think 3 of those countries will also ban AI companions for young people, of which 70% of young people have tried and, and half are regular users at this point. A stat that I find mind-blowing and I’m here for it. I think that is a good thing for our, the future of our society. So Michael, I think you disagree with me on this, and so I’m curious.

Michael Horn

You’d be surprised. I would say I take the Tyler Cowen pushback on the Australia law very seriously, that there could be a lot of unintended free speech consequences. And I am not wild about kids being on social media algorithmic or AI companion services as registered users. And so I’m actually probably leaning closer to you on this one than you’d expect. Where I’m different is I’m not wild about the cell phone bans top down in schools because I want to create room for the educators to have productive uses of them. But that doesn’t include social media or AI companions. So like I would, I actually think we would help the educator use case on that.

If we had those bans in place and took them seriously. And I still think, by the way, a lot of educators would make the very rational choice in my mind to not allow smartphones during the day. Like, I think that would be a very good choice. And I want to empower educators on the ground to be able to make that choice right for their model without criminalizing those educators that have said, actually, there’s a really productive use case here. But believe it or not, I don’t have a prediction on the number of countries likely to follow Australia. But I mean, look, we’re a wait until 8th household for my kids, my daughters. And so, you know, far be it for me to sort of push back on that is, I guess, the way I would say it. And as I understand the law, you could still watch a YouTube video. You just can’t be registered and have, right, like a relationship, if you will, and a set of notifications that are personalizing around your under-16 profile.

Right. That seems commonsensical to me. That’s the addiction part of it that I think is so dangerous. Yeah. Megan wants you to name names.

James Cryan

Oh my goodness. I mean, I, off the top of my head, France, Spain, Denmark, UK are all thinking about this. Germany is thinking about it. I think New Zealand, Malaysia. Not us.

Michael Horn

Okay. No, yeah, I don’t think we’re there, although it is interesting, right? Like, you look at the hearings on, on, in Congress, this is an area where there’s a lot of bipartisan agreement, right? That sort of, I, you know, again, I don’t know the facts, this is not my area of expertise, but there’s a lot of bipartisan agreement that Meta and others have hidden a lot of the research from public view on this. And sort of it feels like a cigarette moment in some ways where you may see some legislation. You’re certainly seeing some state activity on this. I think Montana and some other places have passed laws. It’s not clear how that like operationalizes in a country, right, to just do it within a state. I think that probably doesn’t work. So I’m not wild about the state-driven sort of take on it, but we’ll see.

This is something that could bubble up. I do think we have a stronger tradition of free speech that’s important in this country. And I’m super worried, frankly, about what I see as an anti-free speech movement in Europe in specific. I find that extremely dangerous.

James Cryan

Yeah. Hey, Michael, do you have a last one?

Michael Horn

No, I want to hear your other disagreement.

Building an Ownership Society

James Cryan

Well, this one I just don’t know. I do disagree with you on the cell phone ban. I think it’s too hard for educators to, to own it themselves. Yeah, it’s just been— it’s like a losing battle for schools and educators.

Okay, my last one. I think Trump accounts, the baby bonds, are going to revolutionize philanthropy and economic mobility. I think that philanthropy will make them more progressive and focused on students further from opportunity, rightfully so. And it creates an infrastructure where philanthropists are no longer going to want to take an automatic 30% off the top of their philanthropy for overhead and then be uncertain around the programmatic impact. I’m bullish on Trump accounts.

Michael Horn

I did not expect you to go there. I don’t disagree actually with you on this one either, believe it or not. I think it’s a positive thing in terms of— I’m not sure how I feel about universal basic income. I’m not sure that the evidence from my standpoint backs up a jobless future. And giving people equity in the future, I think, is a positive thing. And so your idea, I hadn’t thought about the philanthropy piece of it, but I think that’s compelling. I do think that no one should be naming things for living politicians as a general rule, but that’s a separate point. But I think the structure actually is a very compelling way to build up an ownership society, which I think the US would do well to move to move more aggressively into in general.

James Cryan

The Dell commitment more than doubled their foundation’s entire giving with that one commitment.

Michael Horn

Yeah, that’s interesting. That’s really interesting. So we’ll see how it plays out. I’ll stay on that for one second. The last one that I’ve been puzzling over, and I just— I don’t have a strong take on it for a prediction, but the ECA, right, piece of the one big beautiful bill that gave choice for states to arguably opt in. Even if the states don’t, it creates scholarship, scholarship contribution opportunities for individuals. And so politically, that is going to build, I think, a lot of momentum for choice. Like, wait a minute, you’re not letting our students benefit from it.

And the real wildcard, I think, is what the regulations end up looking like and how much customization can you do within those structures. And so that’s— I’m not ready to— I don’t feel informed enough to make a prediction, but I think it’s a really interesting trend line.

James Cryan

Yeah, that’ll be interesting. I’m helping set up a scholarship foundation in Colorado to take advantage of, because Governor Polis opted in, which I think is the right call for governors. Why would you leave free money for—

Michael Horn

Yeah, because it’s not state dollars, right?

James Cryan

That’s right. Well, this has been fun, as I expected. Thank you so much for joining us, Michael, and thanks to the folks who joined us and participated in the conversation. Hope it was sparked, you know, the point of doing predictions is not to be right, it is to spark a more constructive and better future. And so hopefully that, that certainly happened for me, and hopefully that happened for others in the room today.

Michael Horn

Huge thanks, and I’ll shout out Gina’s 3 areas, also in the chat of: teach K-12 how to embrace AI and not ban it, Shift high school credit requirements to include work-based learning and valuable skills and revisit recognition for industry-related certifications and shift to recognized application of the learning. I’m all for showing evidence in general and not just taking people’s word for it.

James Cryan

So those are good 3. So, Gina, are you in Colorado? That’s pretty similar to Colorado’s big 3.

Gina

I live in Colorado, but I work for Acceleration Academies. We’re in 9 different states. So, yeah. I was just going to say my husband’s a high school principal out here in Aurora, so I see a lot from his perspective as well.

James Cryan

Excellent. All right. Well, thank you again, Michael, and to all of our folks who joined us. This was fun.

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