2U Declares Chapter 11 Bankruptcy. Will Anyone Else Name All The Elite Universities That Were Complicit?

2U declared Chapter 11 bankruptcy today and the company is now valued at less than $5M. That's a small shadow of the $5.4B perceived value it had in mid-2018.

As a company that will be owned and operated by vulture capitalists (VCs), 2U (TWOU) and its subsidiary edX will fall below the radar. But that won't stop the company from ensnaring more students for overpriced "elite" and "brand name" degrees and certificates--as it tries to survive. In fact, it might make it easier. The visible economic market and its media won't care anymore. 

According to Higher Education Dive, backers of the latest scheme include three vulture capital firms: Mudrick Capital Management (Madison Avenue in NYC), Greenvale Capital (London) and Bayside Capital (Miami/London). 

Somehow, these VC firms will try to extract value from the bankruptcy deal. But how they do that is a mystery. C-suite executives have already gotten some of their bonuses, leaving little else for workers. Reducing labor costs (firing people) will be essential. Not paying their bills is another. Continuing to deceive consumers would be difficult to change. Even after the deal, 2U will still be laden with more than $400M in debt.

Since 2019, we have tried to expose 2U and its business practices, as well as the role of elite university partners in enabling the sale of advanced degrees and edtech certificates that led to few good jobs and lots of consumer debt.  When they acquired edX from Harvard and MIT for $800M, we doubled down.

The Higher Education Inquirer has been the only outlet to name the elite schools that were complicit in this scheme that took money away from consumers just trying to get ahead. Not just USC, but Harvard and MIT, and Yale, and Cal Berkeley, and the University of North Carolina, and Syracuse, and Pepperdine, and many others. Check out the links below to learn more about how this higher ed scheme developed and collapsed. And how this is just the latest wave of edugrift. 

 

Related links:

HurricaneTWOU.com: Digital Protest Exposes Syracuse, USC, Pepperdine, and University of North Carolina in 2U edX Edugrift (2024)

2U-edX crash exposes the latest wave of edugrift (2023)

2U Virus Expands College Meltdown to Elite Universities (2019)

Buyer Beware: Servicemembers, Veterans, and Families Need to Be On Guard with College and Career Choices (2021)

College Meltdown 2.1 (2022)

EdTech Meltdown (2023)  

Erica Gallagher Speaks Out About 2U's Shady Practices at Department of Education Virtual Listening Meeting (2023)

The Degowning of America: A List of College Towns (And Towns with Colleges) Facing Financial Challenges (Updated July 18, 2024)

The decline of college towns (and the decline of towns with colleges) has been reported on for years, but there has never been a comprehensive list to illustrate the extent of this phenomenon we call the de-gowning of America. The schools include small private colleges, community colleges, HBCUs, and state universities that are not flagship institutions. 

The Hollowing Out of America

Like steel towns, mill towns, fishing towns, mining towns, and prison towns that have faced economic and population declines, these towns face challenges as the colleges and universities they have supported are struggling--and in some cases are closing or have closed.  

Some of these college towns will adapt well, especially if there are other businesses in the area, wealthy communities are nearby, and real estate is valuable. Others will muddle on. Some are in financial trouble and will face an exodus. 

Elite schools like Williams College are doing well but may not be paying sufficient taxes, and folks are leaving.  State university systems, like the University of Wisconsin, have closed branch campuses in order to save money as austerity occurs. Working-class towns, like Johnstown (PA), Flint, and Youngstown, previously known as industrial centers, will have to adapt again. 

The Financial Elites Know

We have no doubt that the financial industry (from banks to bond raters) has detailed proprietary data. Data that they can use for their advantage and the disadvantage of others. EY, for example, keeps tabs on the financial status of colleges and universities. Moody's, Standard & Poor's, and Fitch Ratings assess higher education institutions and municipal bonds.  

This list is not exhaustive, and it may be controversial, but it is a start to a conversation that needs to occur. We welcome your comments and feedback. 

• Keene, NH (Keene State University)
  
• Poultney, VT (Green Mountain College) 
• Williamstown, MA (Williams College)  
• Alfred, NY (Alfred University)
  
• Aurora, NY (Wells College)
  
• Fredonia, NY (SUNY Fredonia)
• Oneota, NY (SUNY Oneota and Hartwick College) 
• Bloomsburg, PA (PA System)
  
• California, PA (PA System)
• Cannonsburg, PA (Washington and Jefferson College) 
  
• Clarion, PA (PA System)
• Edinboro, PA (PA System)
• Hazleton, PA (Penn State) 
• Huntingdon, PA (Juniata College)
  
• Indiana, PA (PA System)
  
• Lock Haven, PA (PA System)
• Mansfield, PA (PA System)
  
• McKeesport, PA (Penn State)
• Johnstown, PA (Pitt-Johnstown)
  
• Gambier, OH (Kenyon College) 
• Granville, OH (Denison University)
  
• Greenville, OH (Edison State Community College)
  
• Kent, OH  (Kent State University)
  
• Oberlin, OH (Oberlin College) 
• Youngstown, OH (Youngstown State University)
  
• Wilberforce, OH (Wilberforce University and Central State University)
  
• Wilmington, OH (Wilmington College)
  
• Yellow Springs, OH (Antioch College)
  
• Ada, OH (Ohio Northern University)
  
• Muncie, IN (Ball State University)
  
• North Manchester, IN (Manchester University) 
• Gailsburg, IL (Knox College)
  
• Adrian, MI (Siena Heights University and Adrian University) 
  
• Albion, MI (Albion College) 
• Flint, MI (University of Michigan) 
  
• Kalamazoo, MI (Western Michigan University)
  
• Mt. Clemens, MI  (McComb Community College)
  
• Muskegon, MI (University of Wisconsin System)
  
• Green Bay, WI (University of Wisconsin System)
• Platteville, WI (University of Wisconsin System)
• Oshkosh, WI (University of Wisconsin System)
• Platteville, WI (University of Wisconsin System)
• Waukesha, WI (University of Wisconsin System)
• Ettrick, VA (Virginia State University)
  
• Fairmont, WV (Fairmont State University)
  
• Philippi, WV (Alderson-Broaddus University)
  
• Shepardstown, WV (Shepard University)
  
• Adairville, KY (Lindsey Wilson College) 
  
• Sewanee, TN (University of the South) 
  
• Orangeburg, SC (Claflin, South Carolina State)
  
• Livingston, AL (University of West Alabama)
  
• Albany, GA (Albany State University) 
• Greenwood, MS (Mississippi Valley State University)
  
• Kirksville, MO (Truman State University)
  
• Pinebluff, AR (University of Arkansas) 
  
• Emporia, KS (Emporia State University)
  
• Ada, OK (East Central University)  
• Ardmore, OK (East Central University)
  
• Havre, MT (Montana State University-Northern) 
  
• Silver City, NM (Western New Mexico University)
  
• Arcata, CA (Cal Poly Humboldt) 
• LeGrande, OR  (Eastern Oregon University)
  
• Pullman, WA (Washington State University)
  

Related links:

Why College Towns Are Disappearing (Something Different Films)

IVM finds heightened risk in higher education as stimulus funds expire (Kasia Lundy, EY Parthenon, 2024)

 

Six key financial and operational metrics pinpoint higher ed risk  (Kasia Lundy, EY Parthenon, 2022)

 

Little-noticed victims of the higher education shutdowns: college towns (Emily Richmond, Hechinger Report, 2020)

Campus and Learning Site Closings Nearing 20,000

"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent 

 

A preliminary list of private colleges at risk (2019)

Breaking the Chains of Debt and Contingent Labor (Debt Collective and Higher Education Labor United)

Join us on July 31 as we host a deep dive discussion into two related crises facing higher ed workers and students alike: debt and labor contingency. 

Often presented as both institutionally inevitable and as individually shameful, spiraling debt and rising labor precarity are in fact insidious products of policy decisions, and together they are eroding the conditions that make genuine higher education possible. Yet these widely shared and intersecting chains of debt and labor contingency also have the potential to bring us together: as faculty, students, and workers, in new ways.

How can we grasp the systems of debt and labor precarity that bind today’s academy in a way that can allow us to unleash potential for liberatory education, in the classroom and beyond? And how can our unions and pedagogical strategies help create alliances between students, faculty, and other campus workers—not by shamefully avoiding talk of our “delinquent” debt or “adjunct” status, but by placing them front and center?”

Speakers: Joe Ramsey, Chair of Contingency Task Force, Higher Education Labor United and Faculty at UMASS, Boston; Jeri O’Bryan-Losee, United University Professions (SUNY)

Facilitated by Jason Wozniak, Debt Collective

Co-Sponsored by Higher Education Labor United

 

Related links:

 

The Power of Recognizing Higher Ed Faculty as Working-Class (Helena Worthen) 

 

I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers)

The Student Loan Mess Updated: Debt as a Form of Social Control and Political Action  

 

DEBT STRIKE!

 

 

Pending HEI Investigations

The Higher Education Inquirer (HEI) is working on a number of investigative projects. They include:

(1) Maximus is the sole contractor for the US Department of Education's Default Resolution Group (DRG) and its "Fresh Start" program.  The DRG contract is set to expire, and information about their contract appears to have been removed from public view. DRG is likely to face more problems as defaults are expected to rise dramatically in late 2024. 

(2) Subprime scholarship at America's largest online robocolleges, including Liberty University's online doctoral degrees in history and philosophy. We are communicating with subject matter experts to determine the extent of the problem. 

(3) Our 6 1/2 year battle to obtain information about bad actors receiving Department of Defense Tuition Assistance (TA).  

Approximately $600 million in tuition assistance each year is managed by DOD VOL ED and its contractors. About 100,000 servicemembers each year use TA benefits to pay for continuing education, and a disproportionate amount goes to robocolleges.

In 2017, as a continuation of Obama-era policies, contractors PwC and Gatehouse compiled a list of the 50 worst offenders, schools that were violating DOD MOU and President Obama's Principles of Excellence (Executive Order 13607). 

Under President Trump, DOD refused to name the bad actors and did not punish anyone for their violations.  In 2018, DOD education program analyst Anthony Clarke said that DOD did not want to create a "witch hunt." After 2019, the oversight program fell under the radar.  

The University of Phoenix was implicated in a number of violations, but there is no record that DOD did anything to correct the situation, other than to reprimand at least one base commander. DOD has had a long-term relationship with predatory subprime colleges for years through the Council of College and Military Educators (CCME). 

DOD has a current contract with Purdue University Global offering degrees of questionable academic value. 

HEI has spent a great effort communicating with DOD officials, whistleblowers, and political aides, and following up with information that first appeared in in the Military Times in 2018 and 2019, then reappeared in 2024. We are also awaiting a substantive response from DOD FOIA 22-1203-F submitted in July 2022 that has received multiple delays and is not expected to be answered until October 4, 2024, about 1 month before the US federal elections.     

Related links:

Maximus, Student Loan Debt, and the Poverty Industrial Complex 

Articles About Robocolleges 

Articles About DOD Tuition Assistance

 

Ahead of the Learned Herd: Why the Higher Education Inquirer Grows During the Endless College Meltdown (Dahn Shaulis and Glen McGhee)

The Higher Education Inquirer (HEI) continues to grow without financial support and without paying for advertising or SEO help. The reason is that HEI continues to provide useful information for folks who follow US higher education. We do it in the spirit of Upton Sinclair and others pejoratively known as the muckrakers. And we gladly take the label. 

For years, the higher ed herd dismissed warnings of looming financial crises, but HEI accurately foresaw the revenue declines and unsustainable models forcing college closures, and the downside of the online pivot (including online program managers and robocolleges). We also saw a decade of enrollment declines with no end in sight. 

HEI has published a number of articles that provide value to higher ed workers (including adjuncts), future, present, and former students (including the tens of millions of student loan debtors), and other folks affiliated with the higher ed industry (including workers at edtech and financial companies). We called it the College Meltdown. 

 

We have examined a number of groupings in the industry (from community colleges and for-profit schools to elite universities and everything in between) and issues (to include student and worker protests, student loan debt, and violence on campus).  We highlight those who are trying to good, like David Halperin (Republic Report), Gary Stocker (College Viability), Mark Salisbury (TuitionFit), Helena Worthen (Power Despite Precarity), Theresa Sweet and Tarah Gramza (Sweet v Cardona), and Ann Bowers (Debt Collective). 

HEI has also had the good fortune of getting outstanding contributions from Randall Collins, Bryan Alexander, Robert Kelchen, Phil Hill, Gary Roth, Bill Harrington, and others. Bryan Alexander's contributions have been extremely important in highlighting the existential threat of global climate change and the civil strife that accompanies it.

While honest reporting is important to us, we do take sides, just as other outlets do (most others take the side of big business and government). We are for the People, and we hunt for corruption that undermines democracy. We have examined companies (like Guild, Maximus, and EducationDynamics) that few others will bother to examine. We continue to follow subprime for-profit colleges that have morphed into subprime state universities (like Purdue Global and University of Arizona Global) and other bad actors in higher ed (like 2U and the University of Phoenix). 

We value history, the real unvarnished history, not the tales, myths and lies that have been repeated to children for generations and used as indoctrination at all levels of society. And we value those who look honestly at the present and the future, those not trying to sell themselves or their hidden agendas. 

As Howard Zinn proclaimed, you can't be neutral on a moving train. And US higher education, we fear, is a train moving away from America's hopes and dreams of diversity, equity, inclusion, and justice, towards a less utopian, more dangerous, place.