Wednesday, May 31, 2023

Robocolleges, Artificial Intelligence, and the Dehumanization of Higher Education

In 2019, the Higher Education Inquirer began writing about the ruthless automation of academic work. We were looking for information on how the ideas of Frederick Taylor and his intellectual progeny (e.g. Harvard Business School's Clayton Christensen) resulted in an academic assembly line for low-grade higher education.  A subprime education for the masses. 

It was obvious that large for-profit colleges had been divesting in academic labor for decades, replacing full-time instructors with adjunct faculty. And they eventually replaced thousands of physical learning sites with exclusively online learning. Over time, content creators and other ghost workers replaced adjuncts. And the remaining adjuncts worked as deskilled labor. Shareholder profits, and branding, advertising, and enrollment numbers were more important than student outcomes. 

Two years later we used the terms "robocollege" and "robostudent" to acknowledge the extent of dehumanization in higher education. We noted that this process was taking place not only at for-profit colleges, but shadow for-profits, mid-rung state-run schools--and even at more elite schools who were looking for increased profits. 

Community colleges continue to dehumanize significant portions of their adjunct workforces with low pay and precarity. Online education makes it more alienating but more convenient for working folks. 

Expensive public and private universities continue to use grad assistants, lecturers, and other adjunct instructors in high-tech lecture halls. Classes almost as alienating and unproductive as online instruction.     

Over the last four decades, thousands of satellite campuses have closed across the US, making local connections less possible. Night schools at the local high school are a thing of the past.

For-profit Online Program Managers (OPMs) like Academic Partnerships and 2U recruit students for regional and elite state universities and private schools--hoping to profit from the growth of online education. But learning outcomes, completion rates, and debt-to-earnings ratios may be riskier bets for consumers choosing to take the more convenient and seemingly cheaper online route.  

Studies indicate that medical school students in face-to-face programs fall short in empathy.  So what can we expect from online instruction in education, nursing, psychology, social work, and other professions where empathy is necessary?   

Where does the process of dehumanization stop in US higher education?  It's difficult to believe that an extension of all this automation, artificial intelligence, will make human existence more humane for the masses--not under our current political economy that values greed and excess.  

It doesn't appear that accreditors, government agencies, labor unions, the media, or higher ed institutions themselves are deeply interested in countering these technological trends--or even in understanding its consequences.  It could be argued that this new wave of education serves US elites well by delivering subprime outcomes: making the "educated underclass" easier to control and less able to compete. 

Academic labor has had a few recent wins at a few brand name public universities but this seems less likely to occur where the labor supply is less valued. 

The numbers of full-time faculty continue to drop at robocolleges.  And where there are already few full-time faculty, US workers at Southern New Hampshire University and Purdue Global are being replaced by cheap academic labor working remotely from India.  This itself may only be a stop gap as artificial intelligence replaces intellectual labor.  

How about other private and state run schools in decline?  Will they follow the same desperate path of dehumanization to stem the bleeding?

What lies ahead for online students?  If student-consumers are merely present to acquire or upgrade credentials, why won't they use AI and other methods to escalate levels of intellectual dishonesty?  For those who are unemployed or underemployed, is returning to online education worth the financial risk and the time away from work, friends, and family?  Will their educational work be obsolete before they can put it to good use?  

Related links: 

The Higher Education Assembly Line

The Growth of "RoboColleges" and "Robostudents"

College Meltdown 2.2: Who’s Minding the Store?

State Universities and the College Meltdown

Sharing a Dataset of Program-Level Debt and Earnings Outcomes (Robert Kelchen) 

OPM Market Landscape And Dynamics: Spring 2023 Updates (Phil Hill)

Cheating Giant Chegg, Shrinks (Derek Newton)

Friday, May 26, 2023

When will US higher ed revenues peak? #collegemania

Despite more than a decade of enrollment losses, US higher education revenues were never higher than in 2021--the latest year for which the US Department of Education has released data.  

This reflects the persistent notion that middle-class families will go into debt, sometimes deep debt, to send their children or themselves to private and public universities--to compete for a declining number of good jobs.  It also reflects the willingness that the US Department of Education has to subsidize this debt.  

While revenues have dropped at many community colleges, for-profit colleges, small private and public colleges, and regional public universities, the demand for an elite or brand name US education has never been higher. It's difficult to imagine things changing in the near future.  

Related links: 
State Universities and the College Meltdown
Community Colleges at the Heart of College Meltdown

Monday, May 22, 2023

Sharing a Dataset of Program-Level Debt and Earnings Outcomes (Robert Kelchen)

[Editor's Note: This article first appeared in the Kelchen on Education blog.]

Within a couple of hours of posting my comments on the Department of Education’s proposal to create a list of programs with low financial value, I received multiple inquiries about whether there was a user-friendly dataset of current debt-to-earnings ratios for programs. Since I work with College Scorecard data on a regular basis and have used the data to write about debt-to-earnings ratios, it only took a few minutes to put something together that I hope will be useful.

To create a debt-to-earnings ratio that covered as many programs as possible, I pulled median student debt accumulated at that institution for the cohorts of students who left college in the 2016-17 or 2017-18 academic years and matched it with earnings for those same cohorts one calendar year later (calendar year 2018 or 2019). The College Scorecard has some earnings data more than one year out at this point, but a much smaller share of programs are covered. I then calculated a debt-to-earnings ratio. And for display purposes, I also pulled median parent debt from that institution.

The resulting dataset covers 45,971 programs at 5,033 institutions with data on both student debt and earnings for those same cohorts. You can download the dataset here in Excel format and use filter/sort functions to your heart’s content.
Robert Kelchen is a professor at the University of Tennessee, Knoxville who studies higher education finance, accountability policies and practices, and student financial aid. All opinions expressed here are his own.

Friday, May 12, 2023

OPM Market Landscape And Dynamics: Spring 2023 Updates (Phil Hill)

Editor's Note:  This article first appeared in Phil Hill's On EdTech Blog

Wow. Just wow – the last twelve months have been something.

Was this forwarded to you by a friend? Sign up, and get your own copy of the news that mattered sent to your inbox every week. Sign up for the On EdTech newsletter. Interested in additional analysis? It’s free through May 24, 2023. Upgrade to the On EdTech+ newsletter.

On to the update. [full-page audio link]

During several keynotes, podcast interviews, and panel sessions over the past two years, I have described how the Online Program Management (OPM) market was facing enormous pressures and would change dramatically. I took some heat in private conversations for overstating the case, but as the past 12 months have shown, it turns out that I understated the turmoil and change of the market.

With that in mind, it is time to update our two main OPM Market graphics that were last shared in the Summer 2022 update.

OPM Market Landscape

  • Market valuations of publicly-traded OPM companies have continued to drop, with 2U/edX, Coursera, and Keypath all down 75% or more from March 2021.

  • Pearson tapped out of the market, agreeing to sell its OPM business to private equity firm Regent.

  • Zovio is no more. It has ceased to be.

  • FutureLearn sold the remnants of its business to a for-profit system, and it now has the most obnoxious website of any OPM provider, past or present.

  • Byju’s, which (according to multiple media accounts) had been considering an acquisition of 2U/edX or Coursera, abandoned these plans to go off and deal with its own financial crisis.

  • Noodle acquired South Africa-based Hubble Studios.
  • The Government Accountability Office (GAO) released a report on the OPM market, triggering (but not causing) official efforts to make massive regulatory changes.

As readers of On EdTech know, this last bullet is now the driver for market dynamics for 2023 and probably 2024.

As always, please note that this view is intended to give a visual overview of the market landscape and is not mean to be comprehensive in terms of vendors represented. This is particularly true in the smaller customer base and fee for service categories.

OPM Market Dynamics

When we first came up with the Mad Max graphic in 2018, it was intended to counter the golly gee, the OPM market is rich, well-funded, and growing like crazy coverage, or the flip side of these companies are all getting rich pulling profits out of the schools coverage that we saw in EdTech and national media through 2022.

This year there are two primary changes with the overall message of the graphic:

  • Online enrollments in the largest OPM market (US graduate schools) are no longer growing – they’re dropping and in structural ways. OPMs are still chasing those enrollments and tuition revenue, but the dynamics change when the target has its own problems.

  • The small threat from the Department of Education and its activist allies to the OPM market has become a major threat, with an all-out assault.

We still get a picture of a chaotic market that is not for the faint of heart, and one that is seeing consolidations and category changes, and these changes will continue. All of this in a Mad Max-style pursuit of college online course and program revenue (whether rev share or fee-for-service or a blend, and whether degree- or certificate-based).

Note the changes in the program revenue target:

as well as the central market threat from ED regulations, going after both revenue sharing and TPS status, all in the name of protecting the helpless:

with 2U being the chosen target to personify the regulatory actions:

We also see Pearson getting out of the OPM business:

Zovio’s crash:

and Byju’s flying away from the scene.


Next week I (along with Glenda Morgan) will be at ASU+GSV, and I will be on a panel with Ryan Craig, Mike Goldstein, Katherine Lee Carey, and Toby Jackson. The session is titled “Decoding the Dear Colleague Letter – What’s a TPS?!”, scheduled for Wednesday at 11am PDT. I am eager to find out at the conference if the investment community is aware of the significance of ED’s targeting of the OPM market, at least for revenue sharing business models, and of the potential impact of TPS guidance.

Update 4/13: Added bullet on Noodle acquiring Hubble Studios.

Friday, May 5, 2023

Cheating Giant Chegg, Shrinks (Derek Newton)

[Editor's Note: This article first appeared in The Cheat Sheet, the free newsletter on academic integrity and cheating.]

Yesterday, academic cheating company Chegg took yet another major hit on its stock value after the market closed, a decline that continues.

Today, Chegg - which is shockingly listed on the New York Stock Exchange - tumbled below $10 a share. In February 2021, Chegg shares were worth more than $113. In just over two years, Chegg shares have lost more than $100 in value - an Alpine decline of more than 91%.


The panic retreat by investors was initiated by Chegg’s quarterly earnings (Q1 - 2023) which were, not good. The bullets, according to news coverage:

Total net revenue down 7% year over year

*Subscription services, which represent 90% of Chegg’s business, were down 3% year over year.

*Total subscribers were down 5.1 million year over year.

*Projected further, continued declines in revenue, subscribers, and profit.

The company and media blamed the decline on AI tools such as ChatGPT - the automated service that can answer academic questions faster than Chegg, and for free.

In the earnings announcement, Chegg’s CEO said:

"since March we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate."

Two things.

To start, The Cheat Sheet could have saved Chegg’s investors some serious money. Or, made you some, had you shorted Chegg. Back in Issue 68, I wrote:

Bottom line: Chegg as a business is in trouble.


This past February, in Issue 193, I wrote:

… Chegg thinks their earnings will be essentially unchanged for 2023 vs 2022. I think they’re dreaming.

They were.

I’d repeated the wisdom of some smart readers who said early, early on that the likes of ChatGPT was going to be a Chegg killer. I agreed and told EdSurge exactly that, also in February (see Issue 193):

Some instructors have opposed companies like Chegg and Course Hero, as trying to get content related to the courses they teach removed can cause a headache. The chatbots represent a new headache, for teachers and possibly also for homework-help companies.

That whole business could be threatened by free tools like ChatGPT, argues Derek Newton, who runs The Cheat Sheet, a newsletter that covers academic dishonesty.

For Newton, the primary motivation of a student using homework-help services is laziness or a lack of preparedness. And so having a free alternative that can give answers to questions — like ChatGPT — could shrink the number of students who are willing to pay

In that Issue I wrote:

It’s too early to tell if ChatGPT will dent Chegg and its irresponsible ilk - but I can’t really see how it won’t.

And so it came to pass.

It is clear now that Chegg’s recent announcement of a partnership with ChatGPT (see Issue 203) was a desperate Hail Mary. And there’s no reason to think it will work, no reason to think Chegg’s decline won’t continue.

It also answers a question I’d been wrestling with for years - whether Chegg’s investors (see Issue 142) knew its core business was academic misconduct or not. This most recent investment retreat proved to me that they did. They only left when a better, more efficient cheater started eating their profits.

But a wise confidant and reader texted to say my question was academic - Chegg’s investors know now. He’s right.

When a free answer site takes away your customers, it becomes very clear very quickly what you’re actually selling.

Finally, a reminder that a collapsing valuation is not Chegg’s only problem.

As it happens, I checked in last week on the legal challenge by Pearson, against Chegg (see Issue 55). The suit is still active. And if Pearson wins, it could decapitate Chegg’s entire value proposition - selling the answers to questions they do not own. Chegg also continues to face investor legal challenges (see Issue 163). Since this recent stock evaporation essentially confirms that Chegg was a cheating provider all along, it’s hard to see how this recent news hurts investors’ claims.

Related links: 

Tuesday, May 2, 2023

Higher Education Inquirer Selected Archive (2016-2023)

In order to streamline the Higher Education Inquirer, we have removed the HEI archive from the right panel of the blog; information that could only be seen in the non-mobile format.   

The HEI archive has included a list of important books and other sources, articles on academic labor, worker movements, and labor actions, student loan debt, debt forgiveness, borrower defense to repayment and student loan asset-backed securities, robocolleges, online program managers, lead generators, and the edtech meltdown, enrollment trends at for-profit colleges, community colleges, and small public and private universities, layoffs and closings of public and private institutions, consumer awareness and organizational transparency and accountability, neoliberalism, neo-conservativism, neo-fascism and structural racism in higher education, and strategic corporate research.  

HEI Resources  
Rutgers University Workers Waging Historic Strike For Economic Justice (Hank Kalet)Borrower Defense Claims Surpass 750,000. Consumers Empowered. Subprime Colleges and Programs Threatened.I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers)
Erica Gallagher Speaks Out About 2U's Shady Practices at Department of Education Virtual Listening Meeting
An Email of Concern to the People of Arkansas about the University of Phoenix (Tarah Gramza)
University of California Academic Workers Strike for Economic Justice
The Power of Recognizing Higher Ed Faculty as Working-Class (Helena Worthen)
More Transparency About the Student Debt Portfolio Is Needed: Student Debt By Institution
Is Your Private College Financially Healthy? (Gary Stocker)
The College Dream is Over (Gary Roth)
"Edugrift": Observations of a Subprime College Lead Generator (by J.D. Suenram)
The Tragedy of Human Capital Theory in Higher Education (Glen McGhee)
Let's all pretend we couldn't see it coming (US Working Class Depression)
A preliminary list of private colleges at risk
The Growth of Robocolleges and Robostudents
A Letter to the US Department of Education and Student Loan Servicers on Behalf of Student X (Heidi Weber)
The Higher Education Assembly Line
College Meltdown Expands to Elite Universities
The Slow-Motion Collapse of America’s Largest University
What happens when Big 10 college grads think college is bullsh*t?
Coronavirus and the College Meltdown
Academic Capitalism and the next phase of the College Meltdown
When College Choice is a Fraud
Charlie Kirk's Turning Point Empire Takes Advantage of Failing Federal Agencies As Right-Wing Assault on Division I College Campuses Continues
Navient and the Zombie SLABS Meltdown (Bill Harrington)
College Meltdown at a Turning Point
Charting the College Meltdown
Colleges Are Outsourcing Their Teaching Mission to For-Profit Companies. Is That A Good Thing? (Richard Fossey)
Rebuilding the Purpose of the GI Bill (Garrett Fitzgerald)
Paying the Poorly Educated (Jack Metzger)
Forecasting the US College Meltdown
College Meltdown 2.0
State Universities and the College Meltdown
"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis)
Visual Documentation of the College Meltdown Needed