Tuesday, February 26, 2019

The Layoff.com: Observations of the College Meltdown in Real Time (Updated February 7, 2022)

"Today, the subprime college crash is part of a less spectacular but decade-long College Meltdown. Regional universities across the US are facing lots of layoffs. With its many scandals, the University of Southern California is also on the radar with its partner in crime 2U.  Student loan servicer Maximus has also taken on greater scrutiny as they manage Navient's federal student loan portfolio. And Navient is still interesting to look at as they process toxic student loan asset-back securities. Even Harvard University is well worth watching." 

While the Higher Education Inquirer utilizes government, industry, and non-profit data, the information is often stale by the time it is analyzed. Social media, however, provide unique insights into the US subprime college crash, the student loan mess, private college closings, downsizing at state colleges and universities, college financial and political scandals, and other college-related crises as they happen. One important site is TheLayoff.com.

TheLayoff.com has provided a platform for real-time observations and information for more than a dozen years. In the case of the subprime college crash that began in 2011, workers chronicled the collapse of Corinthian CollegesITT TechEducation Management CorporationEducation Corporation of America, and other for-profit colleges as they happened. 

In 2019, as the crash continued, some of the most interesting pages to watch were: Dream Center Education Holdings and the Art InstitutesUniversity of PhoenixDeVry UniversityGraham Holdings and Kaplan Higher Education (now servicer of Purdue University Global), Laureate Education and Walden University, Bridgepoint Education (later known as Zovio, the online program manager of University of Arizona, Global Campus), and Career Education Corporation (later known as Perdoceo and parent company of Colorado Technical UniversityAmerican Intercontinental University, and Trident University International).  

In the first edition of this article, The Dream Center layoff page was particularly active as its schools and former schools, the Art Institutes, Argosy University, and South University, collapsed and $13 million in federal aid meant for student stipends was reported missing.

With austerity, downsizing, mergers and closures, layoff pages at private and public colleges also gained importance.  Green Mountain CollegeHampshire CollegeCollege of New Rochelle , and Southern Vermont College were victims.

We also watched LendingTree, and student loan servicers NavientSallie Mae, and Nelnet, predatory internet lead generators such as QuinStreet, private Christian colleges such as Liberty University, HBCUs like Bethune-Cookman University, non-profit institutions like Baker College, and public universities such as Western IllinoisSouthern IllinoisEastern MichiganUniversity of AkronUniversity of Central OklahomaUniversity of New Mexico and New Mexico StateUniversity of Alaska, Anchorage and University of Alaska Fairbanks.

Workers posting on TheLayoff.com also provided insight into businesses that surrounded the for-profit education industry, such as ECMC (a student loan servicer and owner of subprime schools) and Accrediting Council for Independent Colleges & Schools (ACICS), one of the industry's most notorious accreditors.

Today, the subprime college crash is part of a less spectacular but decade-long College Meltdown

National American University's death watch is hereUniversity of Phoenix's layoff page has also been a valuable source about student enrollment, layoffs, and unethical practices that have undermined the school.  More recently, it reported UoPX's latest low--the hiring of George Burnett, former Alta College CEO. DeVry University faces the closing of many physical campuses.  

Student loan servicer Maximus became a higher profile company when it took over Navient's portion of the federal student loan portfolio. Online program manager 2U, and CheggPearson PLC, Barnes and Noble College Booksellers, Wiley, and K12 Education also became higher profile as the College Meltdown advances.

Coursera (which has never made a profit) and soon-to-be IPO Guild Education are also important to watch.  

Most state colleges and universities have layoff pages.  For example, the University of Alaska, Anchorage has a page at https://www.thelayoff.com/uaa

Many private colleges and universities have layoff pages.  For example, the University of Southern California (https://www.thelayoff.com/usc) and Liberty University (https://www.thelayoff.com/liberty) have active pages.

Each US state has a space on the layoff.com for people facing furloughs and layoffs.  The State of Alaska, for example, is at https://www.thelayoff.com/Alaska

Tuesday, February 19, 2019

America's Most Endangered Private Colleges in 2019

Related article: Endangered Colleges include HBCUs, Small Religious Colleges (2016)
Related article: Another American College to Close (Bryan Alexander, 2019)
Related article: Private College Revenues and the US College Meltdown (2018)
Related article: College Meltdown Shows Few Signs of Slowing (2019)

In 2016, Jeff Selingo and EY published a report stating that more than 800 US colleges were facing major downsizing, mergers, and closures. But their report did not list the schools most likely to fail. It would appear that higher education and business insiders, including government agencies and credit rating agencies, know which schools are likely to merge or fail, but they are unwilling to share it with the public.

The Department of Education publishes a list of schools in financial trouble, called the Heightened Cash Monitoring List, but the list is small and is not the best predictor of future school failures. The PEPS School Closings list is helpful, but it's most often a post-mortem of colleges that have already failed.

Would it be possible to create a list by examining just a few variables? I would suggest these variables, in combination, when looking at the survivability of individual US private colleges:

Enrollment <1000 students, and at least
Five consecutive years of student enrollment losses, and at least
Five consecutive years of revenue declines, and
Revenue declines of more than 15% over the last 5 years, and
Endowments less than $5 million

What variables do you think should be included? And what are the intangibles that must be considered? For example, HBCUs have been able to survive for decades despite lack of government support. Loss of accreditation, on the other hand, can be a death sentence for almost any college.