President Joe Biden issued an executive order that extends a pause on student loan payments. McGraw Hill CEO Simon Allen joins Yahoo Finance Live to break down how Biden's Education Department will tackle the pandemic and future of learning.
MYLES UDLAND: All right, welcome back to Yahoo Finance Live. Myles Udland here in New York. On Yahoo Finance, of course, we tend to focus on what's happening in the economy, publicly traded securities, of course a little Bitcoin in there. But I think no sector of the economy has faced quite as much disruption as the education sector. Students remain learning from home, or maybe a hybrid model where students are in the classroom half the day. Sometimes they're at home.
In the higher education space, this has played out all kinds of different ways-- campuses doing quasi bubbles, some campuses closed to students indefinitely. So let's talk more about everything happening in education and how they are handling the pandemic.
Joining us now for that conversation is Simon Allen. He is the CEO at McGraw Hill. Simon, great to speak with you once again. So let's just begin by kind of going through an overview of how you see the education space today in dealing with the pandemic. We were just talking in the break. We last spoke in August. There was a lot of uncertainty around how things would play out.
It's five months later. I'm not sure there's a ton more clarity. How have, you know, the campuses you're working with, how have they been faring through this period?
SIMON ALLEN: Yeah, thank you, Myles. It's nice to see you again. And you're right. It's been a tumultuous year for education across all sectors. Higher education, K-12 education, nursery education, every level has been dramatically affected. And it still is very much in flux right now. And we are seeing still a very strong preference for hybrid, if you like, remote education, remote learning. That's not going to change any time soon.
If anything-- and we were just saying in the break-- there is a good chance that this will certainly continue through this semester. And who knows about September? It's very likely still that there will be institutions and certain faculty and instructors that will choose to continue some of their large lectures remotely so that they can really help their students digitally online, making sure that they get the best material they can.
For us at McGraw Hill, Myles, we've been incredibly busy because of this. And quite frankly, our shift has been helping instructors transform their courses to a remote learning environment, helping them shift all of their material online, making sure they're comfortable with McGraw Hill Connect. It's our platform that delivers all of our wonderful content.
And helping them gauge and navigate the platform so they can make sure that in doing so, they're assessing their students and making them-- helping them learn in the right way to keep the outcomes growing and to ensure that their education is not stalled and interrupted.
JULIE HYMAN: Simon, it's Julie here. I still have this image of McGraw Hill primarily as publisher. And I still think of big, heavy textbooks, of course, which are not happening right now. I wonder, as kids go back to school in person, the migration had already started at universities in terms of bringing those textbooks more online into electronic forms. Is that going to also be happening in more lasting fashion in K through 12? Because you don't think of kids necessarily as carrying their laptops to class as they do on the university level.
SIMON ALLEN: That's a great question, Julie. We-- and you're right. We are known at McGraw Hill proudly as being a textbook publisher for 132 years. We have, however, rapidly transformed our company now, where, in the case of higher education, over 80% of our business is now digitally delivered so that students coming to our platform taking our world-class content still, but then augmenting that with all the courseware material and assessment material that we offer through Connect and also ALEKS, another one of our very effective platforms.
And these platforms are utilizing artificial intelligence very wisely to where we can direct student performance based upon how they respond to certain questions as they go through their course. It really is a way of personalizing the learning process. But you're quite right, Julie, that when you think about K-12, it is a different sector.
There's no doubt that higher education is not going to go back to what it was. That will remain a largely-- heavily largely digital environment. K-12 is a little different. And I think you can imagine as you go down to the younger age groups in the elementary sector, it's tougher for students, then, to learn purely remotely. They need the interaction with teachers, and they need the ability to be socially interactive with their friends.
I think you'll find that when the day that fine day comes when children are back in school regularly, full time, I think you'll still see, though, a hybrid version of learning even there. You'll see, I think, more younger pupils, younger students going online in their labs in the school itself. And I think you're going to start to see multi-screen classrooms, where teachers will utilize our material and other forms of material that they'll deliver digitally, even when students are in the classroom.
We are still, of course, providing some of those very well-known textbooks that we have across all age ranges in our K-12 business, and we're proudly doing that. That's still only around a half of our business. So already you're seeing a gentle shift towards a digital future, but it is not moving at the same pace, nor would we expect it to, as it is in higher education, where now that business is fully transformed to a digital remote learning environment.
BRIAN SOZZI: Simon, you mentioned earlier that you're busy right now. Are you busy enough to bring McGraw Hill back to public markets? Now, you last filed a prospectus in 2017, so you did float that notion out there. And you have said more recently you are looking for ways to improve your capital structure. Going public would definitely help in that mission.
SIMON ALLEN: We-- honestly we-- right now, we're focusing on doing everything we can do because we are so busy. As you say, our focus is completely on our customer group. We haven't had-- we did a very successful-- we concluded a very successful refinancing in the last few weeks, which we're very, very happy about.
Therefore, really, that's allowed us to focus on serving our customer group in a very different environment, making sure that we are establishing McGraw Hill on a very, very sound footing for the future, and really ensuring that we're still developing and investing huge amounts, hundreds of millions of dollars, every year into our technology platform and making sure that we're still creating the content that we're so well known for to sit on that platform and then be manipulated in a way that's helpful for student outcomes.
That, to be honest, has been all the time that we've had, where we're dealing with six-fold our normal customer service inquiries to help teachers transform their classes. I'm delighted to say that our customer satisfaction ratings are the highest they've ever been. That's keeping us very busy right now. So I don't see that changing any time soon.
MYLES UDLAND: All right, Simon Allen is the CEO of McGraw Hill. Simon, if we're speaking every four or five months, I hope that the next time we speak the world looks quite a bit different and things are a little bit more opened up than they've been as we've spoken through 2020. All right, Simon, I appreciate the time this morning. We'll talk soon.
SIMON ALLEN: Thank you. Bye-bye.