From EdTech Darling to Distressed Asset — A Post-Bankruptcy Autopsy

The fall of 2U, once a poster child of education technology innovation, is a cautionary tale for investors, policymakers, and students alike. After riding a wave of optimism in the online education bo-m, the company declared Chapter 11 bankruptcy in mid-2024, emerging weeks later as a privately held firm now controlled by distressed asset investors. While many of the company’s top executives have been replaced or reshuffled, the story is far from over—and the damage done to public trust in university–edtech partnerships remains.

Founded in 2008 and based in Lanham, Maryland, 2U positioned itself as a premier Online Program Manager (OPM), contracting with top-tier universities to run their online degree programs. By 2019, the company was a billion-dollar operation, boasting partnerships with USC, Georgetown, and Yale. But cracks began to show as questions about cost, transparency, student outcomes, and aggressive recruiting practices became harder to ignore.

By 2023, 2U was bleeding cash, facing multiple lawsuits, regulatory scrutiny, and plummeting investor confidence. The final blow came when the company defaulted on over $450 million in debt. In July 2024, 2U entered and quickly exited Chapter 11 bankruptcy through a pre-packaged deal. The result: 2U is now a private company, with ownership largely transferred to distressed debt investors—Mudrick Capital Management, Greenvale Capital, and Bayside Capital (an affiliate of H.I.G. Capital).

These firms are known not for a commitment to education but for expertise in distressed asset recovery and aggressive restructuring. Mudrick Capital, for instance, made headlines for its role in the AMC “meme stock” frenzy. Bayside Capital has long operated in the shadows of high-risk debt markets, favoring fast-moving deals in stressed financial environments. Greenvale Capital, a lesser-known but analytically rigorous hedge fund, rounds out the group.

Following the takeover, 2U appointed Kees Bol as its new CEO and installed Brian Napack—a veteran of the education sector and former CEO of Wiley—as Executive Chairman of the Board. Whether this new leadership can turn 2U around remains unclear. For now, they are signaling a pivot toward non-degree credentials and corporate upskilling markets, away from costly master’s degree programs that saddled students with debt and poor returns.

But 2U’s shift is not merely a business story. Its implosion exposes broader flaws in the higher education–tech ecosystem. OPMs like 2U operated in a legal gray area, exploiting Title IV federal student aid without direct regulatory oversight. Critics, including lawmakers and consumer protection advocates, argue that these firms served more as enrollment mills than academic partners. The Department of Education’s efforts to rein in the industry through “bundled services” guidance and potential Gainful Employment rules came too late to prevent massive financial fallout.

The universities that partnered with 2U are also complicit. Many ceded control of curriculum design, admissions, and marketing to a for-profit company in exchange for a share of the revenue. In doing so, they risked their reputations—and in some cases, knowingly funneled students into programs with dubious value. These relationships, many of which are still active, should now be reexamined in light of 2U’s restructuring.

Students who enrolled in these programs, often with the promise of career advancement and elite credentials, are left with debt and degrees that may not deliver the expected return. As 2U retools its strategy under the control of financial firms, it's unclear whether these students—or future ones—will benefit at all.

Meanwhile, the venture capitalists and financial engineers behind the scenes have already cashed out or secured their positions in the restructured entity. Like so many stories in the for-profit education sector, 2U’s downfall was not just predictable—it was profitable for those who knew how to play the system.

Have you worked with 2U—or been affected by it?

The Higher Education Inquirer is continuing its investigation into 2U and the wider online program management (OPM) industry. If you are a former or current employee of 2U, Trilogy Education, EdX, or a related company, a university staff or faculty member who collaborated with 2U, a student or graduate of a 2U-powered program, a marketing contractor, admissions specialist, or vendor affiliated with 2U or its partners, or someone with knowledge of the company's restructuring or operations—we want to hear from you.

We are especially interested in experiences involving enrollment pressure tactics, misleading marketing, internal operations, financial mismanagement, compliance concerns, and revenue-sharing agreements with universities. If 2U’s collapse or restructuring affected your job, finances, or education, your story matters.

You can share information confidentially by contacting us at gmcghee@aya.yale.edu. Anonymity will be protected upon request.

Murky Waters 2: Ambow Education, Chinese Influence, and US Edtech, 2013-2025

In Chinese culture, there’s an old proverb: “混水摸鱼” — “In murky waters, it is easier to catch fish.” The lesson is clear: confusion and opacity benefit those looking to manipulate outcomes for personal gain. In politics, finance, and international affairs, it is a warning. In the case of Ambow Education Holding Ltd., it may be a roadmap.

On June 26, 2025, Ambow announced a partnership with the tiny University of the West (UWest), a Buddhist college in Rosemead, California, enrolling just 153 students. The deal will implement Ambow’s HybriU platform—a so-called “phygital” learning solution combining digital and physical education delivery—positioning the technology as a tool for expanding U.S. academic access to international students. But a closer look reveals a story less about educational innovation than about power, soft influence, and the financialization of struggling institutions.

Ambow, a Cayman Islands–registered and formerly Beijing-based EdTech firm, has quietly entrenched itself in U.S. higher education. While other sectors of the U.S. economy—especially semiconductors and AI—have become more cautious of Chinese-linked investment due to national security concerns, American higher education remains notably exposed. The Ambow-UWest partnership exemplifies that vulnerability.

This is not Ambow’s first foray into U.S. academia. In 2013, the company was delisted from the New York Stock Exchange and liquidated after accusations of accounting irregularities. Rebranded and restructured offshore, Ambow re-entered the market, acquiring distressed for-profit colleges. In 2017, it bought Bay State College in Boston. Three years later, Massachusetts fined the school $1.1 million for fraudulent advertising, inflated placement rates, and illegal telemarketing. The school shuttered in 2023 after eliminating key services, including its library, and squandering pandemic-era federal aid.

In 2020, Ambow acquired the NewSchool of Architecture and Design in San Diego. Since then, NewSchool has appeared on the U.S. Department of Education’s Heightened Cash Monitoring 2 list, signifying severe financial instability. Lawsuits followed, including one for unpaid rent and another over compensation disputes involving the school’s former president.

Still, Ambow continues to market itself as a leader in “AI-driven” phygital innovation. HybriU, its flagship platform, has been promoted at edtech and investor conferences like CES and ASU-GSV, with lofty promises about immersive education and intelligent classrooms. But the evidence is thin. The platform’s website contains vague marketing language, no peer-reviewed validation, no public client list, and stock images masquerading as real users. Its core technology, OOOK (One-on-One Knowledge), was piloted in China in 2021 but shows no signs of adoption by credible U.S. institutions.

Why, then, would a college like University of the West—or potentially a major public institution like Colorado State University (CSU), reportedly exploring a partnership with Ambow—risk associating with such an entity?

To understand the stakes, we must follow the money and the power behind the brand.

Ambow’s largest shareholder bloc is controlled by Jian-Yue Pan (aka Pan Jianyue), a Chinese executive with deep ties to the country’s tech and investment elite. Pan is general partner of CEIHL Partners I and II, two Cayman Islands entities that control roughly 26.7 percent of Ambow’s publicly floated Class A shares. He also chairs Uphill Investment Co., which is active in the semiconductor and electronics sectors, and holds board positions in tech firms with connections to Tsinghua University—one of China’s premier talent pipelines for its national strategic industries.

Pan’s voting control over Ambow gives him sweeping influence over its corporate decisions, executive appointments, and strategic direction. His role raises critical concerns about the use of U.S. higher education infrastructure as a potential channel for data access, market expansion, and soft geopolitical influence.

To further legitimize its U.S. operations, Ambow recently appointed James Bartholomew as company president. Bartholomew’s resume includes controversial stints at DeVry University and Adtalem Global Education. While at DeVry, the institution was fined $100 million by the FTC for deceptive marketing. At Adtalem, he oversaw operations criticized for offshore medical schools and active resistance to gainful employment regulations.

Even Ambow’s financial underpinnings are suspect. Its R&D spending hovers around $100,000 per quarter—trivial for a firm purporting to lead in AI and immersive tech. Its audits are performed by Prouden CPA, a virtually unknown Chinese firm, not one of the major global accounting networks. These red flags suggest not a dynamic tech company, but a shell operation kept afloat by hype, misdirection, and strategic ambiguity.

That makes its ambitions in U.S. public education all the more dangerous.

Reports that Colorado State University—a land-grant institution managing sensitive federal research—may be considering a partnership with Ambow should prompt urgent scrutiny. Has CSU conducted a full cybersecurity and national security risk assessment? Have university stakeholders—faculty, students, and the public—been involved in the review process? Or is the university racing blindly into an agreement driven by budget pressures and buzzwords?

American higher education has long been susceptible to bad actors promising solutions to enrollment declines and funding shortfalls. But in recent years, the cost of these decisions has grown. With campuses increasingly dependent on international student tuition and digital platforms, the door has opened to exploitative operators and geopolitical influence.

Ambow has already shuttered one U.S. college. Its remaining campus is on shaky footing. Its technology lacks serious vetting. Its leadership is tethered to past scandals. And its largest shareholder has interests far beyond education.

This is not just about Ambow. It is about the structural vulnerabilities in American higher education—an industry ripe for manipulation by financial speculators, tech opportunists, and foreign actors operating with impunity. The murky waters of privatized, digitized education reward those who operate without transparency.

Public universities must remember who they serve: students, faculty, and the public—not offshore shareholders or unproven platforms.

If Colorado State or any other institution moves forward with Ambow, they owe the public clear answers: What protections are in place? What risks are being considered? Who really controls the platforms delivering instruction? And most importantly, why are public institutions turning to unstable, opaque companies for core educational delivery?

As the proverb reminds us, murky waters are fertile ground for hidden agendas. But education, above all, demands clarity, integrity, and public accountability.

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Sources:

• SEC filings and 20-F reports: sec.gov

• Massachusetts Attorney General settlement with Bay State College, March 2020

• Federal Trade Commission settlement with DeVry University, December 2016

• U.S. Department of Education Heightened Cash Monitoring List

• NYSE delisting notices, 2013

• CES and ASU-GSV conference archives, 2023–2024

• Corporate data from MarketScreener and CEIHL Partners

• Ambow’s 2023 Annual Report and quarterly 6-K filings

HEI Investigation: Is Former Chinese Edtech Ambow Education a Threat to US Security?

The Higher Education Inquirer continues to investigate Ambow Education, the parent company of NewSchool of Architecture & Design (NSAD) and HybriU.  HEI has followed Ambow for almost three years, as one of its two US colleges, Bay State College, closed and a second one, NSAD in San Diego has faced financial peril and now faces legal problems, including a possible eviction. We also have watched several questionable events happen with shares of Ambow (AMBO) trading on the  New York Stock Exchange. But our greatest concern is that Ambow still has strong ties to the People's Republic of China, and that its proximity to the Pacific Fleet and its expertise in educational surveillance could pose as a potential threat to US security. As the company fails we believe it could become even more vulnerable to PRC interests. We urge any potential customers or strategic partners to do their due diligence before engaging in business with Ambow Education, NSAD, or HybriU.