Guild Education: Enablers of Anti-Union Corporations and Subprime College Programs

According to the Harvard Business School, "Guild Education is an education marketplace that connects employers and universities to provide employees with “education as a benefit.” Guild's employer clients include Walmart, Lowe's, Chipotle Mexican Grill, Taco Bell, Disney and Discover Financial. Its education partners include Penn Foster High School, eCornell (part of Cornell University), CSU Global, Purdue University Global (formerly Kaplan University), University of Denver University College, UF Online (part of University of Florida), Johnson and Wales University Online, Brandman University, Bellevue University, and Ancora Education. A majority of Guild's students are working class people of color. The company has been featured in Bloomberg, Forbes, CNBC, the Wall Street Journal, and Inside Higher Education.

History 

(2015) Guild Education founded by Rachel Romer Carlson and Brittany Stich, two Stanford graduates.
(2016) Guild Education raised $8.5 million in Series A funding. They also received an EQUIP grant from the US Department of Education "to provide low-income students with access to new models of education and training." 
(2017) Guild Education raised $20 million dollars in Series B funding. Guild Education teamed up with Lyft to offer programs to its drivers, making Lyft the "First Gig-Economy Company to Provide Access To Education Services to Contractors." Guild also worked with the Denver Public Schools system to help paraprofessionals, most of whom are people of color, become teachers. CEO Rachel Romer Carlson named to the Forbes 30 Under 30 list. 
(2018) Guild Education raised $40 million dollars in Series C funding. Felicis Ventures was a major investor. 
(2019) Guild Education valued at more than a billion dollars, a rare feat for a company founded by women. Guild Education raised $157 million in Series D funding. Investors included General Catalyst, Emerson Collective, Iconiq Capital and Lead Edge Capital. Ken Chenault joined Guild’s Board of Directors. NBA basketball star Stephen Curry also announced that he had invested in Guild Education.
(2020) Guild Education acquired edtech venture consultancy Entangled Group. CEO Rachel Romer Carlson was named a finalist for the EY Entrepreneur of the Year. 
(2021) Guild Education teamed up with online program manager 2U to connect employees with 500 bootcamp programs covering 30 disciplines and with Google to offer Google Career Certificates. It also added Ancora Corporate Training to its group of educational providers. 

Education Assistance Programs

Education assistance programs are used by many large businesses to recruit, retain, and retrain employees and to increase goodwill with former employees and the public. Corporations with these programs, include Walmart (Live Better U), Amazon (Career Choice), McDonald's (Archways to Opportunity) and Kroger (Feed Your Future). According to Wharton College professor Peter Cappelli, only a small percentage of workers actually use these benefits. 

Policy scholar Kelia Washington states that programs like those at Starbucks, Walmart, and Amazon "are limited in their ability to meaningfully increase college access and completion, and, at worst, they can create additional barriers for employees seeking to obtain high-quality, meaningful credentials." She added that "despite what may be advertised, corporate education assistance programs do not meaningfully relieve financial constraints facing employees interested in pursuing a college degree. These programs in fact limit the college and career choices for some of their employees."

Are Unicorns Real? 

Guild Education has gotten a lot of positive press as an innovative company doing good work. But what do we know about its operations? We know several of its high-profile clients (e.g. Walmart, Chipotle Mexican Grill, Taco Bell, The Walt Disney Company, Discover Financial Services, 5 Guys Inc) and educational providers (Penn Foster, University of Arizona Global Campus, Purdue University Global, University of Florida). The edtech startup is said to be valued at $1 Billion + (a unicorn), with annual revenues of $100 Million+. Paul Freedman has stated that Guild could become a $100 Billion company. But how about the real balance sheet? 

Bright Horizons is the company's largest competitor. Bright Horizons is publicly traded (BFAM) and has worked with more than 200 companies, including Home Depot and Goldman Sachs. Instride works with Arizona State University, Starbucks, and Uber. 

While University of Phoenix and EducationDynamics represent the old guard in for-profit education, Guild Education brings the "business model" of higher ed into the 2020s, connecting anti-union companies, low wage labor, and the new "lower ed," producing what appears to be little more than hype.

Leadership and Board Members

Rachel Romer Carlson is the CEO of Guild Education and the grand daughter of former Colorado Governor Roy Romer.  Her father Chris Romer is a lesser known politician who has worked in the oil and gas industry and charter schools.  Natalie McCollough is president and Chief Commercial Officer, Jessica Rusin is Chief Technology Officer, and Suzanne Stoller is the Chief People Officer.  Mae Podesta, VP of Finance and Strategy, is the daughter of DC power broker John Podesta. 

Guild's Board of Directors includes American business executive Kenneth Chenault, Google product innovator Wesley Chan, and Johnny C. Taylor Jr., President and CEO of the Society for Human Resource Management (SHRM). Lisa Sherman, President and CEO of the Ad Council is a board advisor. Michael Horn, co-founder of the Clayton Christensen Institute for Disruptive Innovation, is a senior strategist. Other board members include Annie Kadavy of Redpoint Ventures and Byron Deeter of Bessemer Venture Partners.  

Current Partners

Walmart's program is called Live Better U. Associates have the opportunity to earn a college degree "for just $1 a day." Partners include Penn Foster High School, Southern New Hampshire University, Purdue University Global, University of Florida, Bellevue University, and eCornell. Penn Foster provides online courses in facilities maintenance, industrial maintenance, HVAC/refrigeration, electrical, plumbing and construction. 

Disney's Aspire program partners include Purdue University Global, Southern New Hampshire University, University of Arizona online, University of Central Florida, Valencia College, Brandman University, University of Florida Online, University of Denver University College, Wilmington University and Bellevue University. In 2019, Disney reported "that they had invested $150 million in the Aspire free education program for 90,000 of the company’s cast members." 

Chipotle's program partners with Bellevue University. Wilmington University, Southern New Hampshire University, Brandman University, and Purdue University Global.

Lowes' program partners are Penn Foster High School, Brandman University, Colorado State University School of Business, Wilmington University, and Bellevue University.

Taco Bell's program partners with Brandman University, Johnson and Wales University online, Pathstream, University of Denver, and Wilmington University.

Discover Financial Services' program partners include University of Denver University College, Brandman University, Wilmington University, Bellevue University, and University of Florida Online.

Five Guys' program partners include Penn Foster High School, Brandman University, Southern New Hampshire University, Wilmington University, and Bellevue University.

Education Partners

Ancora Education is a for-profit educator focusing on vocational and technical programs.
Bellevue University is a private university based in Nebraska.
Brandman University is part of the Chapman University system.
eCornell is part of Cornell University, an elite private university.
Pathstream is a "web-based platform for teaching in-demand tech skills for work."
Penn Foster High School is a for-profit online high school owned by Bain Capital.
Purdue University Global, formerly known as Kaplan University, is a part of the Purdue University system.
Southern New Hampshire University is a large non-profit university.
University of Denver University College is a private university.
UF Online is part of the University of Florida state system.
Wilmington University is a private non-profit university based in Delaware.

Competitors

Bright Horizons is the company's largest competitor. Bright Horizons is publicly traded (BFAM) and has worked with more than 200 companies, including Home Depot and Goldman Sachs. Instride works with Arizona State University, Starbucks, and Uber.

Humans Don't (Really) Matter

According to the company, from 2015 to 2019, 400,000 working adults used Guild Education to explore their paths back to school. Guild states that there is a 208 percent return on investment for every one dollar spent on education and that the 90-day retention rate for employees enrolled in Guild is 98 percent versus a 71 percent baseline employee retention rate. In 2018, according to Guild, the Lumina Foundation "agreed to research and measure the impact and effectiveness of the program and will work with the Walmart team to share findings." In 2021, Guild also claims to have "helped working learners avoid more than $363 million in student debt." 

According to the Chronicle of Higher Education, "about 15,000 of 950,000 eligible employees use the $1-a-day tuition benefit." That's only about two percent of Walmart's workforce.  In a piece for EducationDive, CEO Rachel Romer Carlson said about 3 to 5 percent of workers in the Guild programs use the benefits.  

With their other clients, is Guild providing educational services to more than two percent of the eligible workers? And how many workers are completing programs?  From this analysis, and the intentional lack of data, it would appear Guild Education for the most part is acting as an anti-union shill, for corporate PR, gathering personal data, upskilling a few workers, and creating lots of goodwill for Walmart and others.  It's possibly a profitable strategy in a world of growing automation and widening inequality, where working people have little to do with the calculus. 

  

ED Completes Pre-Acquisition Review for University of Phoenix Deal. University of Idaho Continues Hiding Details of Transaction Fees, 43 Education "High-Risk" Bonds.

[Editor's note: This article will be updated as we receive more information.]

US Department of Education (ED) sources have told the Higher Education Inquirer that the Pre-Acquisition Review for the Idaho-University of Phoenix deal was completed in November 2023 in response to a request from the University of Phoenix in June of the same year.  

The University of Phoenix is currently owned by two powerful investment firms: Apollo Global Management and Vistria Partners. But those companies have been attempting to unload the for-profit college for more than two years. The latest potential owner is the University of Idaho's affiliate organization, Four Three Education--at an initial cost of $685 million.    

ED will not require anyone to post a Letter of Credit--despite the fact that Four Three Education currently has no financial assets and will likely have to issue high-risk bonds to acquire the University of Phoenix. 

Four Three Education, and the University of Idaho, may be responsible for compensating the Department of Education for successful Borrower Defense to Repayment (fraud) claims made by tens of thousands of consumers.  While that could amount to more than a billion dollars, the University of Idaho affiliate expects to spend much less by using aggressive legal means. 

Financing for the Phoenix project has been deliberately opaque. The University of Idaho, however, has acknowledged that it may be liable for some future losses, but only up to $10 million annually. And Idaho officials, including University of Idaho President C. Scott Green, seem undeterred by these potential problems.  

The Most Recent Court Case

A court case to determine whether the University of Idaho violated open meeting laws was completed last week.  Idaho District Judge Jason Scott ruled that the University of Idaho was not in violation for holding three secret meetings followed by a quick vote on May 18, 2023. The University of Idaho claimed that secrecy was essential for the deal to occur.

The State asserted that the Idaho Board of Education did not perform due diligence for the sale, relying on President Green and his word that this was a worthwhile deal for the University of Idaho. In turn, Green admitted he did not ask important questions about competition, for fear that he would be considered naive, and that he outbid the competition.  

As Judge Scott remarked, the wisdom of the deal was not on trial. If it had, perhaps the ruling would have been different. 

Information about the competition to buy the University of Phoenix continues to be sketchy. The University of Arkansas System rejected a deal from the University of Phoenix in April 2023, weeks before the last closed door meeting. UMass Global was mentioned in the court case, but with no evidence that they were ever a serious suitor. 

The Idaho-Phoenix Scheme

The University of Idaho spent a reported seven million dollars on consultants over two months to determine whether the deal would be profitable to the University of Idaho. But little is publicly known about how the funds were spent. Hogan Lovells, President Green's former employer, was one of the organizations involved in consulting the University of Idaho. A local law firm, Hawley Troxell was also involved.  

Idaho also created a non-profit organization, Four Three Education, to act as a firewall in the event the school loses money. The current President of the University of Phoenix, Chris Lynne, will remain in place and be a member of the Four Three Education Board. 

The University of Idaho claims that the University of Phoenix will make a $150 million annual profit but they have not produced evidence. Information about Phoenix's assets are also limited, but Idaho claims the for-profit college holds $200 million in cash. How liquid (or how restricted) the cash is has not been mentioned.

Funding for the sale will be through an initial debt of $685 million, which includes more than $100 million in transaction fees. When bond interest is included, the deal is likely to cost billions of dollars according to an industry source. In an opinion piece in the Idaho Statesman, Rod Lewis, a former attorney for Micron Technology and former president of the Idaho State Board of Education stated:

Phoenix will issue $685 million in corporate bonds anticipated to be “bb” rated (known as “high risk” or “speculative” bonds). Phoenix’s estimated debt service will be $60 million to $70 million per year. It sounds risky, and it is.

We will know more when the University of Idaho produces the bond contracts and names the bond underwriters.    

Poisoning the Public Higher Ed Well

The University of Phoenix relies heavily on obfuscation, intimidation, political lobbying, and lawsuits to reduce expenses related to fraud. Given recent data on consumer complaints about the University of Phoenix, University of Idaho officials say they are prepared for contingencies related to the tens of thousands of Borrower Defense to Repayment claims. But the school or its affiliated organizations could also be liable for claims related to questionable business practices in the present and future. 

It's too early to tell whether Idaho will profit from its acquisition. But if the sale is consummated, the University of Phoenix will join a growing list of state-affiliated and non-profit robocolleges, one that includes Purdue University Global (formerly Kaplan University) and University of Arizona Global Campus (formerly Ashford University), two schools that have not lived up to their parent company names.

Related links:

Predatory Colleges, Converted To Non-Profit, Are Failing (David Halperin, Republic Report)

University of Phoenix's Sinking Ship: Who is Chris Lynne?

University of Phoenix and the Ash Heap of Higher Ed History

Fraud Claims Against University of Phoenix Continue to Mount

How University of Phoenix Failed. It's a Long Story. But It's Important for the Future of Higher Education.

The Slow-Motion Collapse of America’s Largest University

The Growth of "RoboColleges" and "Robostudents"

University of Phoenix's Sinking Ship: Who is Chris Lynne?

Who is Chris Lynne, the latest President of the University of Phoenix?  The school has posted a short, glowing biography that provides some information: four years as the CFO of University of Phoenix, former President of HotChalk and former CFO of Northcentral University.  A Wikipedia article was created for him earlier this year but was recently deleted.

People in the edtech industry say they know little about Chris Lynne, at least not publicly. Of three experts who did respond off the record, no one said anything positive. One mentioned problems at HotChalk and another, problems at Northcentral. The third expert claimed to know nothing, despite decades in the business.

Lynne has worked for a number of companies with issues: accounting firm Arthur Andersen (corruption scandal with Enron led to its closing in 2002), Vice-President at Education Management Corporation (predatory enrollment, financial failure) from 2003-2010, CFO at Northcentral University (financial troubles/US Department of Education Heightened Cash Monitoring) from 2010-2014, President at HotChalk (federal violations with Concordia contract), and CFO at the University of Phoenix from 2018-2022. While no one should be found guilty by their associations, this string of questionable employers does not look good.

Information about Chris Lynne from the WayBack machine.

In June 2022, the University of Phoenix made Chris Lynne the interim President of the school, replacing George Burnett. At the helm for less than six months, Burnett resigned amid an inquiry by the US Department of Education about his work at the now defunct Westwood College. Burnett and Lynne worked together several years at Northcentral University, another subprime college. 

Work at the University of Phoenix 

Chris Lynne was Phoenix's CFO beginning in November 2018. Despite almost a billion dollars government funding per year, US Department of Education data show the school's equity for the Arizona segment declined significantly, from $361M in FY 2018 to $187M in FY 2021. No other data after that are available.

In June 2022, Lynne was named the interim President of the University of Phoenix.  Six months later, he was appointed to that position permanently. Little if anything is known about the hiring process that occurred, and who else was considered for the position.

The truth is, without looking at all the books and matching them with expert observations, we have no idea what Chris Lynne has done as the CFO and now President of the University of Phoenix. The numbers we have from the US Department of Education show a school in decline in terms of enrollment and revenues, shored up by closing campuses and reducing instruction costs.  We do not know what the University of Phoenix has done to maintain its infrastructure, including its computer hardware and software. 

If we could take a close look at all the financial records, examine the school's infrastructure, and interview workers, we would know better how Lynne has handled his work at the school and what shape the University of Phoenix is in for the long run as it is sold to the folks in Idaho.

Related articles:

University of Phoenix and the Ash Heap of Higher Ed History

Fraud Claims Against University of Phoenix Continue to Mount

How University of Phoenix Failed. It's a Long Story. But It's Important for the Future of Higher Education. 

New University of Phoenix Head Ran College That Closed After Fraud Suit (David Halperin)

The 17 Questions The Education Dept. Asked A University President Before He Resigned