Sunday, February 20, 2022

College Meltdown 2.0

College Meltdown 2.0 is distinctly different than the College Meltdown that started in 2010. 

The first wave of the College Meltdown (2010-2021) resulted in a slow and steady drop in overall US college enrollment, with dramatic losses among for-profit colleges and community colleges. Corinthian Colleges, ITT Educational Services, and Education Management Corporation were three large for-profit chains to close. Small private liberal arts schools and regional universities also experienced losses.  More folks were moving into the growing educated underclass.  

Elements of College Meltdown 2.0 include publicly held corporations.  Click on the image to see the chart (Source: Seeking Alpha) 

College Meltdown 2.0 comes as the Coronavirus becomes more manageable.  However US fascism continues to advance, student loan debt is slowly approaching $2 trillion, and the 2026 enrollment cliff is just a few years away.  This new wave includes remnants of for-profit colleges like National American University, Stratford University, South University, the Art InstitutesUniversity of Phoenix (owned by Apollo Global Management), Career Education Corporation (aka Perdoceo), and DeVry University (owned by Cogswell Education) as well as national accreditor ACICS. 

The largest element of College Meltdown 2.0 is federal student loan debt, which appears to be rising to an unsustainable level--as it hamstrings the lives of millions of families.  When mandatory student loan payments resume (scheduled for May 1), long-term default rates may range from 30 and 50 percent.  It also appears that at least $500 billion of the Federal Student Aid (FSA) student loan portfolio will be unrecoverable.  

College Meltdown 2.0 also involves online program managers (OPMs) that service elite schools (2U), regional universities (Academic Partnerships), and subprime robocolleges (Zovio-University of Arizona Global and Graham Holdings-Kaplan-Purdue University Global). 

Student loan servicers and private student loan companies (MaximusNavient, Sallie Mae, Nelnet), publishers and other edtech enterprises (EducationDynamics, Chegg, Barnes & Noble Education, Coursera, and Guild Education) are implicated or at least entangled in the mess.  Higher education accreditors and student loan asset-backed securities (SLABS) are also worth monitoring.  

Related link: 2U Virus Expands College Meltdown to Elite Universities

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