This is part two of a two-part interview. Part one was published on yesterday. A condensed version of the entire interview will be published in the June issue of Texas Monthly. The interview has been lightly edited for clarity and length.

JAKE SILVERSTEIN: So let’s talk about the Framework [for Advancing Excellence]. It’s a document, written by the chancellor, that outlines a series of specific goals, from increasing the number of degrees conferred to lowering financial impact, and even touches on some smaller things like space utilization and computational power. But what are the larger goals of the project? What is the framework trying to do for the system?

GENE POWELL: There are problems in higher education across America: cost, accessibility, tuition, fees, teaching loads, utilization of space. So I appointed two task forces the first day I became chairman, one on online learning, chaired by Regent Hall, and one on excellence and productivity, chaired by Regent Pejovich. Now, these two task forces had presidents, regents, other people in the system on them, and the chancellor was on them too. Over the spring of 2011, they talked about everything in the world, and they brought in all kinds of experts. They had about twenty meetings, and they put in about two thousand man-hours. In late May the chancellor came to me and he said, “Chairman, I have had an epiphany. I think I can see an action plan, and I think I can use almost everything that the two task forces have generated. Your plan was for each task force to write a report to the board and the board would hand it to me and I would go work on it. I don’t think we can wait for that. I now know enough that I can go right to writing the action plan.” So we gave him permission, and he gathered together his staff, they went on a retreat, and they wrote the first draft of the framework. They then brought it to me, and he and I spent a day going over it. He then took it to the regents. They reviewed it, gave him input, he then took it to the presidents, they all reviewed it, gave their input, and all signed off on it. Then he presented it on August 25, 2011. The room was packed, with both supporters and naysayers. We had all the presidents there. The chancellor did an almost one-hour presentation. I then asked a couple of the presidents to stand up and tell us what they thought about the framework. The one I remember the best is John Mendelsohn, who was president of MD Anderson [Cancer Center] at the time. He stood up and said, “I am so impressed with this piece of work, this is not just a framework for Texas, this is a framework for higher education and medical education across America.”

This framework is not simply a report. It’s a roadmap to action that has been embraced by the National Higher Education Association, by the UT presidents, by Chambers of Commerce and business groups, by the U.S. secretary of education, by the vice president and president of the United States. Did you know the chancellor has been invited to the White House twice? Once he visited with President Obama and [Education] Secretary Arne Duncan, and once with Vice President Biden. The president wanted to know, “How are you guys in Texas accomplishing all that you’re accomplishing? We want to know how you’re doing it.” So the chancellor went up and told them. And then they invited him back. And they’ve called him a number of other times. He told me that he and Arne Duncan spoke at the National Hispanic Chamber here a month or so ago, and Duncan came up and said, “You guys are my heroes. We consider you the trendsetter across America.” He said, “Don’t let those people in Austin get you down.” You know, it’s very interesting that a board of nine regents that are all Republicans would be castigated at home and applauded in the Democratic White House.

JS: You said you consider the past two years at UT to be the most productive 24-month cycle ever in higher education in American history. That’s a bold claim. So make your case.

GP: We’ve never seen this big of a productivity period, and we’ve never seen this big of a paradigm shift ever.

JS: When you say paradigm shift, you mean at the UT System or in American higher education?

GP: I mean at the UT System.

JS: Well, explain that, that’s interesting.

GP: Okay, so we’ve had two things come out of the framework. First, we’ve had these capital investments, huge capital investments and commitments that the board has made. I don’t think we’ve ever seen this level of capital commitments. Then we’ve got organizational changes in higher education, and I’m going to give you—this’ll take a few minutes, but I’m going to give you my little top list of the two groups. So first, let’s talk about those capital improvements. We’ve got a new medical school in Austin. The regents committed $250 million over ten years. The citizens of Austin voted to tax themselves. There’s not been a new medical school created at an AAU [Association of American Universities] institution in 37 years. There’s a university in South Texas that will begin next year with 28,000 students. It’ll open its doors as the second-largest Hispanic-serving institution in America. When was the last time you heard of anybody forming a brand-new university in one of poorest regions of the state? Then we add a medical school to it, and we’ve committed $100 million over the next ten years to that medical school. That’s two medical schools being formed in one year when the last one at an AAU school was 37 years ago. Then the board passed the Strength in Numbers Initiative. We believe that as revenues from the state go down, philanthropy is a big part, so we committed $10 million to hiring new professionals across the system to help with philanthropy. Last year, when people told us that we would lose philanthropy because of all the things we had done, we set a record: $1.2 billion raised off the system, and that was partly due to the $10 million we put up to hire new development officers. We hired Ron DePinho [to be president of MD Anderson Cancer Center] at a time when naysayers were saying that you won’t be able to hire researchers, you won’t be able to hire top people. We hired Ron DePinho, and we not only hired him, but we hired 38 members of his Belfer Institute. They all came to Houston, and now we have this new institute and MD Anderson has announced its Moon Shots Program—eight cancers that they have targeted to eradicate.

We brought MyEdu to the system. We put up $10 million to buy into that, and we now have 87,000 students and alumni using the program. It has a 97 percent approval rating with the people who use it. And it’s free to them. We developed one of the most intensive and comprehensive web-based information dashboards ever to be put together. The general public, the media, you, legislators, students, parents—they can all go to and find all the information on each of our schools: cost, performance, graduation rates, research expenditures. And this information is invaluable for anybody making decisions. We put up $105 million in matching funds for UT-Austin to help pay for a new $350 million engineering building. We approved blended online learning and providing support to Permian Basin and Tyler so that they can double their enrollment. We voted to hold tuition rates flat across the system, but we then said we will pay you—the tuition that you wanted—we will pay each of you two years, and in return what we want you to do is go out and figure out how to lower costs.

So everybody’s doing it. They’re all working on it. Each academic institution is aggressively pursuing cost reduction, and we see the first one that’s come in and that’s the $490 million at UT-Austin, which we couldn’t be more proud about. That would not have happened had it not been for this board pushing. It was not popular, it didn’t make people happy, they thought we were being mean to people. But I stand by it. We are like a big family. Until we all say, “We’re going to sit down and tighten our belt and find out what things we can do without,” we won’t do it, and so those savings should go directly back to students in the form of saving on tuition, fees, etc. We approved a $350 million new children’s hospital in San Antonio and a $75 million healthcare network throughout South Texas that will feed that hospital. San Antonio’s been trying to do that for twenty years, and this board got it done in a period of about six or seven months. The governor challenged us about $10,000 degrees. Everybody said it can’t be done. UT–Permian Basin figured out how to do it. UT-Arlington figured out how to do it. UT-Brownsville figured out how to do it. We now have several $10,000 degrees across the system. We set up the Institute for Transformational Learning, put in $50 million, and hired Steven Mintz, the new director, and we’re out there accelerating the time that it takes for these schools to put courses online. We’ve already got the first nine MOOCs approved from UT-Austin.

JS: Explain what a MOOC is.

GP: MOOC stands for massive open online courses. In 2012 Harvard and MIT formed edX [a global platform for offering MOOCs in a wide range of disciplines]. They went along a while and added Berkeley to it. So they’re getting their feet on the ground, and they’re looking at who can really produce these online courses. And they look out there and they see the University of Texas System has the Institute for Transformational Learning, and we’ve got $50 million. If you took Berkeley, Harvard, and MIT, our system is several times bigger than all three of them put together. So they come down here and do a presentation to sell us on becoming edX members. We cut a deal, and by January, UT-Austin had submitted 23 MOOCs. Our outside vetting team selected 9. We said, “Wow that’s a pretty good number—9 out of 23.” And then we said, “Okay, now we’ve got to submit them to MIT and Harvard.” So we sat around and talked and everybody who looked at them said, “Well, how many will we get approved?” I said, “Gosh, if we really hit a home run, 4 or 5?” So we sent them in and waited and waited. The chancellor gets a call one day. All 9 are approved. They’re so good all 9 are approved. We have 4 up. In three days, we had 15,000 enrolled. I myself enrolled for Energy 101.

Honestly, if you go back through history and look, when has a system of higher education ever committed this much money and built this many programs and committed to this much help to higher education and patient safety and health education? We have put up $535 million in two years towards research: research buildings, labs, cyber infrastructure, research programs, research personnel. We put up $53 million in the last two years on what we call “STARS Funding,” where we take money from the Permanent University Fund, which can be used for bricks, mortar, and excellence, and what we do is we say to the schools, “All of you go out and recruit great professors. And when a professor says he needs something to come to your school—maybe he needs a telescope, maybe he needs a planetarium, maybe he needs a laboratory—if this is a top-notch professor and you want him at your school, we will provide the STARS funding to build what he needs to get him there.” Fifty-three million dollars in two years—that tells you that we’re recruiting a lot of top-level people.

JS: So let me ask you about one aspect of this—accessibility. Talk about why that is important, what you see as the strategies for increasing enrollment.

GP: In America we’ve always had a provider-driven model—the provider of higher education builds the bricks-and-mortar location. The student comes to the location to get the degree. It’s kind of an elite model. It’s a very expensive model. You either have to have funding of some kind or you have to have an extreme talent in some area to get there. The average student who has to work to take care of siblings, to take care of parents, to provide for themselves—he can’t get there. A number of people have said, “Well, when you start talking about blended online and you start talking about technology, you’re just going to dumb down UT-Austin.” Not true.

JS: So you see these online courses as a tool to increase enrollment, to make schools accessible to more students. It strikes me that it’s also a matter of embracing technological change, which is sweeping through the higher education business, just as it’s sweeping through every other business. You obviously consider these changes necessary. Do you sometimes see yourself in the position of trying to bring the hard, cold reality that technological change has arrived to establishments that are inherently kind of resistant to change?

GP: You know, it’s very interesting. Most institutions of higher learning that are moving forward on blended and online learning have from 20 percent to 25 percent of their students taking at least one course online today. If you look across our institutions, UT-Arlington has 40 percent. Permian Basin has 49 percent, and San Antonio has 6 percent. Austin has 1.5 percent.  We project a number of 20 percent or 25 percent of students taking courses online is where it settles out. We need to get UT-Austin to that level, and yes, I think it’s coming whether we like it or not. Now remember, the naysayers said that I was going to turn this into the University of Phoenix. That I was going to turn UT into a diploma mill.

But one thousand schools across the country are embracing this, places like Harvard, MIT, Berkeley, Rice, and Stanford. Red McCombs called me when we announced edX and he said, “Gene, this is the greatest thing to hit the University of Texas in a hundred years.” I said, “Thank you. Why?” He said, “Think about what you’ve done. If I can take my brand, my car dealership brand, and all of the sudden I can put that car dealership brand in Moscow and Tokyo and Australia, and I could distribute cars like that to those locations, if I could market there, look at what I would do to my business. I would instantly turn it into an international brand with huge impact. What you’ve done in an instant is put the University of Texas on a worldwide map.”

JS: So why is it that UT-Austin is only at 1.5 percent?

GP: I think it’s the fear and the assumptions about what we’re doing. There has been recalcitrance about change. They’re fully engaged now, but they have been resistant over time because they were afraid that this would dumb down the university, this would cause us to become a diploma mill. And what we kept saying was no, no, no, no. If the club that we’re in includes the names I’ve ticked off, I’m pretty glad to be in that club. We do not want to wipe out the classroom experience, but we do want this as an alternative.

My wife’s family has a ranch down near Charlotte, and a couple years ago we go to breakfast, and I’m talking to the young lady who’s waiting on me, and she tells me she’s taking courses online through A&M-Commerce. She was so excited, and I said, “Dulce, you know the traditionalist would tell you that you’re being cheated.” And she said, “Why?” And I said, “Because you’re not having a campus experience, you’re not getting in front of the professor and you’re not able to meet face-to-face with your peers and your students.” She said, “Mr. Powell, let me tell you what being cheated is. Being cheated is no degree at all.” And I thought, “Wow. So she didn’t have that option. So those people who want to preclude those students from having an option are just wrong. We are not going to back away, and I am not going to apologize for the things that we are doing.” This board is absolutely about the students and student success and student access and student affordability.

JS: We hear a lot about how we’re moving to an information economy, and obviously the role that institutions of higher education play in preparing students to compete in that economy is more important than ever. What are some of the specific ways that changes in the areas of technology, media, and information are disrupting and transforming the traditional view of education?

GP: Well, one of the things that frightens people is when you talk about technology being disruptive. They take that as a negative. But when people in the data business and the computer business and the technology business say that, that’s not what they mean. They don’t mean it’s disruptive as in bad, they mean that it shakes things up. It disrupts the normal flow of things and makes you think a different way. Go back ten years, and think about the words that we didn’t know. We didn’t know “iPad,” “iPhone,” “Facebook,” “Twitter,” and you can go on down that line. Think about what’s happened in ten years. I mean, do you realize it was only 1992 when the very first website was brought up? Education has not kept up. We are still teaching exactly the same way we’ve always taught: professor in front, students in the seats.

Now, I still believe that you can’t go away from the classroom experience. You still need that in a lot of areas. But I think there’s a percentage of your classes—and I don’t know what that percentage is—that are going to have to be available through media.

JS: Through some kind of blended online learning?

GP: Through blended online learning and these courses that are being developed today that use everything. They use the Internet, they use Twitter, they use Facebook. A group of the kids told me one time, “Mr. Powell, when you were at Texas, y’all all went down at the end of the day to Scholz’s and got a cold beer and had a study session. We don’t do that. We’re talking at night on Facebook or Twitter or email and we do talk a great deal and we talk at all hours of the night and day, but we do it on our schedule.”

JS: Minus the cold beer at Scholz’s.

GP: Right. You have to remember that I’m a founder of two technology companies. One of which has 125 young employees, all of them under forty, who have taught me a great deal about how they learn, how they work, how they interact. It’s a different world, so it made it easier for me to comprehend.

JS: One of the standard knocks against blended online learning is that it replaces a live professor with a video professor and that this diminishes learning. Why is this critique wrong?

GP: Several things. One is we’re growing the student population dramatically. If we’re going to offer more and more education to more and more students, this does not mean that we’re going to reduce the number of hours that are spent in front of professors because those professors are still going to be there and they are still going to be teaching, but we have to augment it. We have to supplement it because we can’t get enough professors in front of enough students in enough classrooms to teach everyone in that manner.

I read an article recently by the current president of Wesleyan University. He had taught his first course online, and he had all kinds of people taking it, from grandparents to PhDs to college students to people who were just laborers in Ireland or Scotland. They were all talking to each other, all sharing their views and asking him questions. He said, “You know, I’ve found the online process even more inclusive than I find campus sometimes. All these people pass each other on campus and don’t speak, but everybody online comes home from work eager to learn. They talk back and forth, they share ideas, they share ideas with me. They give me perspectives, they give each other perspectives, and as a result we have this great learning experience from people all over the world.”

So I think using technology is going to be the disruptive way of the future. We now have one thousand universities and colleges across America with online courses. And we’re just at the tip of the iceberg. I don’t really know where this is going to be, and I don’t think the regents do either, but we know that the personal computer has changed the world and how we work.

JS: Completely.

GP: That’s why I say we are creating a paradigm shift in higher education. Technology has not been used a great deal in higher ed yet, and we’re making it available and there will be a lot of research done. Some things will not work so well, others will work great, and that’s why we formed the ITL. We think there’s a business model there too. Since we get to keep 100 percent of our revenue and we don’t have to pay edX anything, we see the MOOCs doing several things: one, promoting our brand around the world instantly, just through the flip of a switch; two, giving our students opportunities to take courses that they couldn’t ever take before; three, giving us an opportunity to generate money from these professors teaching that we could never do. So maybe a professor teaches eight hundred kids a semester, and that’s a pretty heavy load. All the sudden with a MOOC, he could be teaching 20,000 or 150,000 and if say two or three thousand of those actually stay in the course and pay money to get a credit, this is money that comes in to UT-Austin or UT-Dallas that they would have never seen before. It’s a classic business model: you have a fixed production cost. If you can produce more units and sell more units, even if you lower the cost of each unit a little bit, if you can produce more of them with the capacity of your machine, you’re going to make more money from your machine. I know it sounds very harsh and it probably sounds a little bit more business-like than a lot of academicians would like, but saving money is also generating revenue from our assets and our resources. Does Texas Monthly make money online?

JS: Yes.

GP: Okay, well, it used to be that you could only do it by mailing the magazine to people. All of the sudden you’ve got the same magazine, the same writers, the same advertisers. You now have a third distribution pipeline. We’re going to have another distribution pipeline across the system, where each of our schools can be involved at their own pace and at their own time.

JS: I suspect the interest you have in technology is that of a lot of entrepreneurs working in any field today. It’s a fact of life, and you either embrace it or get run over by it.

GP: I was not bad at technology back in the sixties, so I’ve always kept up with it, always been excited by it, always been interested, and never been intimidated. I think a lot of people don’t understand it, and thus it’s something that intimidates them, and I get that. But I see it as something to be explored. I see it as a frontier, not unlike the frontier that the people who settled this land had to go out into. It was scary, you know—when it got dark at night it was really dark and there were a lot of strange sounds out there, and it’s the same way with technology. You’re going out on a frontier and you don’t know how this is going to work, but we now know enough that we ought to be really utilizing technology more in higher education. We’re not there yet, but we will get there. What I want, and what this board wants, is for the University of Texas System to be a leader. We want to be out on the leading edge; we don’t want to be sitting back, learning from others. We want others learning from us.

JS: What do you hope your legacy as chairman will be?

GP: I could choose a lot of things from that list of things that we’ve accomplished, but the end result of all those things is better student success. I want more students to be able to get a degree. I want them to be able to get it at a cost they can afford, in a location they can afford. I want them to not be restricted by time and place. I want them to be able, if they need to, to take their classroom with them. It’s portable. As I said before, we used to be a provider-driven model, we are changing to a consumer-driven model, and the consumer will be out there with an iPad, working in the oil field somewhere taking courses. They may be taking care of their family grocery store in San Benito. They may be taking a course, going one day a week to the university in Brownsville or Edinburg and then taking courses online.

But none of this was done by me. This is a legacy of this board. This is a legacy of this chancellor. And this is a legacy of the staff of this system. It’s a great story about a team that has changed how things are going to be done in America, and yet Texas and the nation don’t really know the story. They know all about the salacious things. They know about Bill Powers and the tension. But the story that we’re missing is that right here under our noses, we’re changing the face of higher education. The fog continues, and we just have to live in it. I don’t have any choice. But I have all the faith in the world that someday it will be recognized and we will know how great a thing we did. So I am at peace with it. I don’t need the accolades today. In fact, I don’t ever need the accolades, if the kids are successful, their families are successful, and if their kids are successful twenty, thirty, forty years from now, I’ll be happy. All the slings and arrows are not really important. What’s really important is when I go down and I see a kid walk across the stage at Pan American and a whole section of the audience rises up with air horns because this is the first kid that’s ever graduated from college in the family and there’s a fiesta going on in one part of the auditorium, and you say, “That’s what this is about.”