Defenders of the Higher Ed Business: How Lawyers Shield a Broken Industry

In the long decline of American higher education, a certain class of professionals has quietly prospered—lawyers who specialize in defending institutions from the consequences of their own behavior. These attorneys rarely appear in public debates over student debt, predatory recruitment, or collapsing regional colleges. Yet their fingerprints are everywhere: in courtroom strategies designed to run out the clock, in motions that narrow the rights of borrowers, in settlement agreements that mask wrongdoing without forcing structural reform. They are the legal custodians of an industry that has spent decades avoiding accountability.

These lawyers often frame their role as neutral, simply providing representation to clients who need it. But the nature of the representation matters. When institutions mislead students, inflate job-placement claims, push them into unaffordable debt, or fire whistleblowers who object to unethical practices, these firms defend the institution—not the student, not the truth, and certainly not the public interest. Litigation summaries and public communications frequently present a parallel universe in which colleges are the victims, regulators are overreaching meddlers, and students who seek restitution are opportunists or pawns of political forces.

The legal work is highly lucrative. In many cases, struggling institutions spend more on their attorneys than they do on direct student support. Colleges on the brink of closure still find six-figure retainers to fight state attorney general investigations or borrower defense claims. Public institutions use taxpayer dollars to shield themselves from transparency, all while students—particularly first-generation, low-income, and working-class students—absorb the losses. Attorneys in this sector are acutely aware of the harms their clients may have caused, yet their work consistently prioritizes institutional preservation over student restitution.

The history of this defense strategy is well documented. In 2011, federal courts began seeing cases from former students challenging institutions for misleading claims, untransferable credits, and failure to provide promised training. Courts often compelled arbitration, effectively removing class action rights and leaving individual students to pursue costly and complex proceedings alone. This pattern set a precedent: institutional defense relied on procedural tools rather than addressing substantive misconduct. Between 2012 and 2013, state supreme courts upheld arbitration clauses that stripped students of collective redress, signaling to institutions that strategic legal defenses could block accountability. Students’ claims of misrepresentation, fraud, and breaches of enrollment agreements were repeatedly forced into private arbitration. The courts emphasized procedural enforcement over consideration of the underlying harms, allowing institutions to continue operating without public scrutiny.

From 2015 to 2018, the Department of Education’s Inspector General documented widespread mismanagement of federal Title IV funds, showing that hundreds of millions in federal loans were issued to students at institutions that were later found to have misrepresented outcomes or violated federal regulations. Lawsuits brought by former students during this period, including allegations under the False Claims Act, were often dismissed or compelled to arbitration. Institutions were shielded, while borrowers were left with debt and limited recourse.

In 2018 and 2019, state attorneys general filed enforcement actions against multiple institutions for fraudulent recruitment practices and misrepresentation of accreditation status. In almost every case, institutions relied on their legal teams to secure procedural victories: dismissal of class action claims, enforcement of arbitration clauses, and delays in settlements. While regulators attempted to intervene, the structural power of corporate legal defense delayed, diluted, or obscured accountability. During the COVID-19 pandemic in 2020–2021, students sued institutions for failure to provide adequate online instruction and for abrupt changes in course delivery. Defense attorneys successfully argued that enrollment agreements allowed these operational changes, resulting in widespread dismissal of student claims. Again, institutional defense won the day while students absorbed the financial and educational consequences.

From 2022 to 2025, the Borrower Defense to Repayment program and the SAVE Plan promised relief for students harmed by mismanaged institutions. Yet litigation and regulatory challenges have slowed implementation. Institutions and their attorneys have repeatedly used procedural maneuvers to contest forgiveness, compel arbitration, or delay repayments, leaving thousands of students in limbo while debt accumulates. Throughout this period, legal strategy has consistently prioritized institutional survival over student restitution. Arbitration clauses, procedural dismissals, and regulatory delay have allowed colleges and universities to maintain access to federal funds, complete mergers, or restructure under bankruptcy protection, all while leaving harmed students with debt, disrupted education, and minimal legal recourse.

These attorneys also help shape the narratives consumed by policymakers, journalists, and college trustees. Public-facing summaries often downplay institutional misconduct and amplify court decisions that limit student rights. They rarely acknowledge the emotional and financial devastation suffered by borrowers or the systemic risks created when institutions know their lawyers can absorb most of the blow. Instead, they champion a legal environment that treats higher education primarily as a business subject to claims risk, not as a public trust.

Justice, in this ecosystem, becomes a matter of resources. Students and former employees face a wall of corporate legal expertise, while institutions with long records of abuse continue to operate behind settlements and sealed agreements. Attorneys who could use their considerable skills to protect the most vulnerable instead use them to reinforce a system that extracts value from students and leaves them to fend for themselves once the promises fall apart.

The Higher Education Inquirer has long documented the College Meltdown: the closures, the debt, the failed oversight, and the human cost. But the meltdown is not only a story about administrators, investors, or federal agencies. It is also a story about the lawyers who defend the indefensible and who help maintain a higher education marketplace where accountability is optional and harm is routine. They may sleep well, but only because the consequences of their work are borne by others.

The question is not how they sleep at night. The question is how many more students will lose before the legal strategies that protect institutions are no longer enough to protect the industry itself.

Sources:

U.S. Department of Education, Borrower Defense to Repayment decision data, 2022–2025

Government Accountability Office (GAO), “For-Profit Colleges: Student Outcomes and Federal Oversight,” 2021

Department of Education Office of Federal Student Aid, Borrower Defense decisions, 2020–2025

State Attorneys General filings and enforcement actions against higher education institutions, 2018–2023

U.S. Department of Education Office of Inspector General, audits and reports on Title IV program compliance, 2015–2022

GAO report on arbitration clauses in for-profit colleges, 2018

How Educated Neoliberals Built the Homelessness Crisis—and Why HUD’s New Cuts Will Make It Worse

The US Department of Housing and Urban Development has quietly announced one of the most drastic federal rollbacks in homelessness policy in decades: a massive cut to permanent housing under the Continuum of Care (CoC) program, with more than half of its 2026 funding diverted to transitional housing and compliance-based services. HUD’s own internal estimates warn that up to 170,000 people could lose housing as a result of the shift. For millions of Americans, especially those on the margins, this is not a policy adjustment; it is the beginning of a humanitarian disaster.

To understand how we arrived here, it is not enough to point at the Trump administration, the ideological crusade against “Housing First,” or the White House Faith Office now shaping federal grantmaking. One must also examine the educated neoliberals who built and normalized the system that made this possible.

HUD’s policy change overturns decades of federal commitment to permanent supportive housing, an evidence-backed model that dramatically reduces chronic homelessness. The new Notice of Funding Opportunity caps permanent housing at just 30 percent of CoC dollars, down from 87 percent in prior years, while the remainder is funneled toward transitional housing, work or service requirements, mandatory treatment, and faith-based compliance programs. The total funding for 2026 is roughly $3.9 billion across 7,000 grants. That amount, spread across hundreds of thousands of people experiencing homelessness, is barely sufficient to provide minimal assistance, let alone stable housing or the comprehensive services this population needs. One-third of existing programs will run out of funds before the new awards are issued in May, leaving vulnerable individuals exposed to eviction during the harshest months of winter. Ann Oliva, CEO of the National Alliance to End Homelessness and a former HUD official, described the rollout as deeply irresponsible, warning that the administration is setting communities up for failure.

For decades, U.S. policy has been shaped not just by conservatives but also by a sprawling class of highly educated managers: MBAs, MPPs, JDs, think-tank fellows, foundation executives, nonprofit administrators, and “innovation” consultants. They came from America’s elite universities, fluent in market logic, managerialism, and austerity politics. They preached efficiency, accountability, metrics, and self-sufficiency. Many also personally accumulated wealth, often owning multiple homes, benefiting from investment income, and exploiting loopholes to minimize or avoid taxes. Meanwhile, the programs they manage shrink support for the poor and vulnerable.

Through their influence, housing became a program, not a public good. Public housing construction largely disappeared, replaced by a grant-driven, nonprofit marketplace controlled by elite professionals. Even the funding allocated for CoC programs, though nominally in the billions, is deliberately minimal. This scarcity forces competition, instability, and suffering among poor people. Nonprofit executives, most of whom depend on federal contracts and foundation dollars, rarely challenge the economic and political structures that produce homelessness. Accountability rhetoric replaced structural change, reframing homelessness as an issue of individual behavior rather than a systemic failure. The academy normalized the idea that poor people should suffer, teaching a generation of managers to prioritize markets, metrics, and “innovation” over human need. This bipartisan, university-trained professional class laid the foundation for the HUD cuts now threatening hundreds of thousands of lives.

HUD argues that the new model “restores accountability” and reduces the purported waste of Housing First, but decades of research contradict that claim. Permanent supportive housing reduces chronic homelessness, lowers emergency and policing costs, stabilizes people with disabilities, and is cheaper than institutionalization or shelters. Transitional housing with mandatory compliance, on the other hand, repeatedly pushes people back to the streets, disproportionately harms people with disabilities, increases mortality, inflates administrative costs, and creates churn rather than stability. The policy is not a mistake; it reflects the calculated priorities of an elite managerial class whose worldview demands austerity for the poor while allowing them to flourish materially.

The response in Washington has been striking. Forty-two Senate Democrats warned HUD that the shift violates the McKinney-Vento Act, undermines local decision-making, and rejects decades of federally funded research. Even twenty House Republicans urged careful implementation to avoid destabilizing services for seniors and disabled people. Yet decades of neoliberal policymaking—funded and legitimized by universities, foundations, and think tanks—have already created a system in which poverty and suffering are baked into federal policy. This latest HUD action simply codifies that worldview.

The crisis unfolding now is not just the product of Trump’s ideological war on Housing First. It is the logical endpoint of decades of privatization, the erosion of public housing, elite consensus around austerity, credentialed managerialism, the nonprofit-industrial complex, the foundation-university revolving door, and the belief—deeply embedded in higher education—that markets and metrics should govern everything. Many of these policymakers and nonprofit executives own multiple homes, refuse to pay taxes, and structure federal policy to ensure the poor remain dependent, unstable, and suffering. The people most directly harmed are those with the least political power: disabled people, elderly tenants, veterans, people with serious mental illness, women fleeing violence, and families trying to survive an economy that no longer works for them. Behind them stands a class of educated neoliberals who built the systems that made this outcome possible, often congratulating themselves for “innovation” while allowing misery to proliferate. This is not failure. This is design.

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Sources:

• Politico, “HUD to Cut Permanent Housing Funding for Homeless Programs,” 2025.

• National Alliance to End Homelessness, internal HUD funding documents, 2025.

• Ann Oliva, National Alliance to End Homelessness, statements to POLITICO, 2025.

• McKinney-Vento Homeless Assistance Act, 1987.

• HUD Notice of Funding Opportunity, 2026 Continuum of Care Program.

• Executive Order: “Ending Crime and Disorder on America’s Streets,” White House, 2025.

The College Meltdown Index: Profiting from the Wreckage of American Higher Education

“Education, once defended as a public good, now functions as a vehicle for private gain.”

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From Collapse to Contagion

The College Meltdown never truly ended—it evolved.

After a decade of spectacular for-profit implosions, the higher education sector has reconstituted itself around new instruments of profit: debt servicing, edtech speculation, and corporate “partnerships” that disguise privatization as innovation.

The College Meltdown Index—tracking a mix of education providers, servicers, and learning platforms—reveals a sector in quiet decay.

Legacy for-profits like National American University (NAUH) and Aspen Group (ASPU) trade at penny-stock levels, while Lincoln Educational (LINC) and Perdoceo (PRDO) stumble through cost-cutting cycles.

Even the supposed disruptors—Chegg (CHGG), Udemy (UDMY), and Coursera (COUR)—are faltering as user growth plateaus and AI reshapes their value proposition.

Meanwhile, SoFi (SOFI), Sallie Mae (SLM), and Maximus (MMS) thrive—not through learning, but through the management of debt.

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The Meltdown Graveyard

Below lies a sampling of the education sector’s ghost tickers—the silent casualties of a system that turned public trust into private loss.

Symbol	Institution	Status	Approx. Closure/Delisting
CLAS.U	Class Technologies	Defunct	2024
INST	Instructure (pre-acquisition)	Acquired by Thoma Bravo	2020
TWOUQ	2U, Inc.	Bankrupt	2025
CPLA	Capella University	Merged with Strayer (Strategic Ed.)	2018
ESI-OLD	ITT Technical Institute	Defunct	2016
EDMC	Education Management Corporation	Defunct	2018
COCO-OLD	Corinthian Colleges	Defunct	2015
APOL	Apollo Education Group (U. of Phoenix)	Taken Private	2017

Each ticker represents not only a failed business model—but a generation of indebted students.

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The Phoenix That Shouldn’t Have Risen

No institution better symbolizes this moral decay than the University of Phoenix and Phoenix Education Partners (PXED).

At its height, Phoenix enrolled nearly half a million students. By 2017, following federal investigations and mass defaults, Apollo Education Group—its parent company—collapsed under scrutiny.

But rather than disappearing, Phoenix was quietly resurrected through a private equity buyout led by Apollo Global Management, Vistria Group, and Najafi Companies.

Freed from public oversight, the university continued to enroll vulnerable adult learners, harvesting federal aid while shedding accountability.

In 2023, the University of Idaho’s proposed acquisition of Phoenix provoked national outrage, forcing state officials to confront a basic question: Should a public university absorb a for-profit brand built on exploitation?

The deal collapsed—but the temptation to monetize Phoenix’s infrastructure remains. In 2025, a small portion became publicly traded.  Its call centers and online systems remain models of enrollment efficiency, designed to extract just enough engagement to secure tuition payments.

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From Education to Extraction

The sector’s transformation reveals a deeper moral hazard.

If students succeed, investors profit.
If students fail, federal subsidies and servicer contracts ensure the money keeps flowing.

Executives face no downside. Shareholders are protected. The losses fall on students and taxpayers.

In this sense, the “meltdown” is not a market failure—it’s a market design.

“The winners are those who most efficiently extract value from hope.”

Public universities increasingly partner with private Online Program Managers (OPMs), leasing their brands to companies that control marketing, pricing, and student data. The once-clear line between public and for-profit education has blurred beyond recognition.

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The Quiet Winners of Collapse

A few companies continue to prosper by aligning with “practical” or “mission-safe” sectors:

• Adtalem (ATGE) in nursing and health education,

• Grand Canyon Education (LOPE) in faith-branded online degrees,

• Bright Horizons (BFAM) in corporate childcare and workforce training.

Yet all remain heavily dependent on public dollars and tax incentives. The state subsidizes their existence; the market collects the rewards.

Meanwhile, 2U’s bankruptcy leaves elite universities scrambling to explain how a publicly traded OPM, once championed as the future of online learning, could disintegrate overnight—taking with it a network of high-priced “nonprofit” certificate programs.

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A Reckoning Deferred

The College Meltdown Index exposes a system that has internalized its own failures.
Fraud has been replaced by financial engineering, transparency by outsourcing, and accountability by spin.

The real collapse is not in the market—but in moral logic. Education, once the cornerstone of social mobility, has become a speculative instrument traded between hedge funds and holding companies.

Until policymakers—and universities themselves—confront the ethics of profit in higher education, the meltdown will persist, slowly consuming what remains of the public good.

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“The real question is not whether the system will collapse, but who will rebuild it—and for whom.”

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Sources:

• Higher Education Inquirer, College Meltdown 2.0 Index (Nov. 2025)

• SEC Filings (2010–2025)

• U.S. Department of Education, Heightened Cash Monitoring Reports

• An American Sickness – Elisabeth Rosenthal

• The Goosestep – Upton Sinclair

• Medical Apartheid – Harriet A. Washington

• Body and Soul – Alondra Nelson

• The Immortal Life of Henrietta Lacks – Rebecca Skloot

Examining the Debt and Earnings of “Professional” Programs (Robert Kelchen)

 [Editor's note: This article first appeared in the Robert Kelchen Blog.] 

Robert Kelchen Read on blog or Reader Examining the Debt and Earnings of “Professional” Programs By Robert on November 10, 2025 Negotiated rulemaking, in which the federal government convenes representatives of affected parties before implementing major policy changes, is one of the wonkier topics in higher education. (I cannot recommend enough Rebecca Natow’s book on the topic.) Negotiated rulemaking has been in the news quite a bit lately as the Department of Education works to implement changes to federal student loan borrowing limits passed in this summer’s budget reconciliation law. Since 2006, students attending graduate and professional programs have been able to borrow up to the cost of attendance. But the reconciliation law limited graduate programs to $100,000 and professional programs to $200,000, setting off negotiations on which programs counted as “professional” (and thus received higher loan limits). The Department of Education started with ten programs and the list eventually went to eleven with the addition of clinical psychology. In this short post, I take a look at the debt and earnings of these programs that meet ED’s definition of “professional,” along with a few other programs that could be considered professional but were not. Data and Methods I used program-level College Scorecard data, focusing on debt data from 2019 and five-year earnings data from 2020. (These are the most recent data points available, as the Scorecard has not been meaningfully updated during the second Trump administration. Five-year earnings get students in health fields beyond medical residencies. I pulled all doctoral/first professional fields from the data by four-digit Classification of Instructional Programs codes, as well as master’s degrees in theology to meet the listed criteria. Nine of the eleven programs had enough graduates with debt and earnings to report data; osteopathic medicine and podiatry did not. There were five other fields of study with at least 14 programs reporting data: education, educational administration, rehabilitation, nursing, and business administration. All of these clearly prepare people for employment in a profession, but are not currently recognized as “professional.” Key takeaways Below is a summary table of debt and earnings for professional programs, including the number of programs above the $100,000 (graduate) and $200,000 (professional) thresholds. Dentistry, pharmacy, and medicine have a sizable share of programs above the $100,000 threshold, while law (the largest field) has only four of 195 programs over $200,000. Theology is the only one of the nine “professional” programs with sufficient data that has higher five-year earnings than debt, suggesting that students in other programs may have a hard time accessing the private market to fill the gap between $200,000 and the full cost of attendance. On the other hand, four of the five programs not included as “professional” have higher earnings than debt, with nursing and educational administration being the only programs with sufficient data that had debt levels below 60% of earnings. More than one-third of rehabilitation programs had debt over the new $100,000 cap, while few programs in other fields had that high of a debt level. (Education looks pretty good now, doesn’t it?) I expect the debate over what counts as “professional” to end up in courts and to possibly make its way into a future budget reconciliation bill (about the only way Congress passes legislation at this point). Until then, I will be hoping for newer and more granular data about affected programs.

Divestment from Predatory Education Stocks: A Moral Imperative

Calls for divestment from exploitative industries have long been part of movements for social and economic justice—whether opposing apartheid, fossil fuels, or private prisons. Today, another sector demands moral scrutiny: the network of for-profit education corporations and student loan servicers that have turned higher learning into a site of mass indebtedness and despair. From predatory colleges to the companies that profit from collecting on student debt, the system functions as a pipeline of extraction. For those who believe education should serve the public good, the issue is not merely financial—it is moral.

The Human Cost of Predatory Education

For decades, for-profit college chains such as Corinthian Colleges, ITT Tech, the University of Phoenix, DeVry, and Capella targeted low-income students, veterans, single parents, and people of color with high-pressure marketing and promises of career advancement. These institutions, funded primarily through federal student aid, often charged premium tuition for substandard programs that left graduates worse off than when they began.

When Corinthian and ITT Tech collapsed, they left hundreds of thousands of students with worthless credits and mountains of debt. But the collapse did not end the exploitation—it simply shifted it. The business model has re-emerged in online form through education technology and “online program management” (OPM) firms such as 2U, Coursera, and Academic Partnerships. These firms, in partnership with elite universities like Harvard, Yale, and USC, replicate the same dynamics of inflated costs, opaque contracts, and limited accountability.

The Servicing of Debt as a Business Model

Beyond the schools themselves, student loan servicers and collectors—Maximus, Sallie Mae, and Navient among them—have built immense profits from managing and pursuing student debt. Sallie Mae, once a government-sponsored enterprise, was privatized in the 2000s and evolved into a powerful lender and loan securitizer. Navient, its spinoff, became notorious for deceptive practices and aggressive collections that trapped borrowers in cycles of delinquency.

Maximus, a major federal contractor, now services defaulted student loans on behalf of the U.S. Department of Education. These companies profit directly from the misery of borrowers—many of whom are victims of predatory schools or structural inequality. Their incentive is not to liberate students from debt, but to sustain and expand it.

The Role of Institutional Investors

The complicity of institutional investors cannot be ignored. Pension funds, endowments, and major asset managers have consistently financed both for-profit colleges and loan servicers, even after repeated scandals and lawsuits. Public sector pension funds—ironically funded by educators—have held stock in Navient, Maximus, and large for-profit college operators. Endowments that pride themselves on ethical or ESG investing have too often overlooked education profiteering.

Investment firms like BlackRock, Vanguard, and State Street collectively hold billions of dollars in these companies, stabilizing an industry that thrives on the financial vulnerability of students. To profit from predatory education is to participate, however indirectly, in the commodification of aspiration.

Divestment as a Moral and Educational Act

Divesting from predatory education companies and loan servicers is not just an act of conscience—it is an educational statement in itself. It affirms that learning should be a vehicle for liberation, not a mechanism of debt servitude. When universities, pension boards, and faith-based investors divest from corporations like Maximus, Navient, and 2U, they are reclaiming education’s moral purpose.

The divestment movement offers a broader civic lesson: that profit and progress are not synonymous, and that investment must align with justice. Faith communities, student debt activists, and labor unions have made similar stands before—against apartheid, tobacco, and fossil fuels. The same principle applies here. An enterprise that depends on deception, coercion, and financial harm has no place in a socially responsible portfolio.

A Call to Action

Transparency is essential. Pension boards, university endowments, and foundations must disclose their holdings in for-profit education and student loan servicing companies. Independent investigations should assess the human consequences of these investments, particularly their disproportionate impact on women, veterans, and people of color.

The next step is moral divestment. Educational institutions, public pension systems, and religious organizations should commit to withdrawing investments from predatory education stocks and debt servicers. Funds should be redirected to debt relief, community college programs, and initiatives that restore trust in education as a public good.

The corporate education complex—spanning recruitment, instruction, lending, and collection—has monetized both hope and hardship. The time has come to sever public and institutional complicity in this cycle. Education should empower, not impoverish. Divestment is not merely symbolic—it is a declaration of values, a demand for accountability, and a reaffirmation of education’s original promise: to serve humanity rather than exploit it.

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Sources:

• U.S. Department of Education, Borrower Defense to Repayment Reports

• Senate HELP Committee, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success (2012)

• Consumer Financial Protection Bureau (CFPB) enforcement actions against Navient and Sallie Mae

• The Century Foundation, Online Program Managers and the Public Interest

• Student Borrower Protection Center, Profiting from Pain: The Financialization of the Student Debt Crisis

• Higher Education Inquirer archives

South University Faces $35.4 Million Balloon Payment Amid Limited Oversight

[Editor's note: On October 29, 2025, the Higher Education Inquirer emailed South University for a status update. South University did not respond. On November 1, 2025, Benjamin DeGweck replaced Steven Yoho as CEO and Chancellor.]

South University, a former for-profit college network now operating under nonprofit ownership, is facing a $35 million balloon payment this month on a loan obtained through the Federal Reserve’s Main Street Lending Program. The looming debt and the school’s status on Heightened Cash Monitoring (HCM) raise questions about financial stability and the adequacy of regulatory oversight in the nonprofit higher education sector.

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A Heavy Loan Load

According to publicly available financial statements, South University carries more than $35 million in long-term debt maturing this month, part of a $50 million Main Street loan issued during the COVID-19 pandemic. The approaching balloon payment represents a major financial test for an institution already under federal scrutiny and struggling with declining enrollment.

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Heightened Cash Monitoring—But Limited Oversight

South University is currently listed under Heightened Cash Monitoring (HCM) by the U.S. Department of Education, a status that requires extra documentation before federal aid funds are released. While the designation signals potential financial or compliance issues, it does not necessarily result in strong day-to-day oversight.

The school remains accredited by the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC)—an accreditor known for minimal intervention in institutional finances unless there is clear evidence of collapse. This means that despite the HCM flag, South University continues to operate with significant autonomy, even as federal and student aid dollars flow through additional administrative checks.

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A Complicated Legacy

South University’s story is deeply tied to the rise and fall of the for-profit college industry. Once part of Education Management Corporation (EDMC), the school was sold in 2017 to the ill-fated Dream Center Education Holdings (DCEH). When DCEH collapsed in 2019, the Education Principle Foundation (EPF)—a nonprofit—took over South University and The Art Institutes. South University is now an independent non-profit enterprise.  

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A Pattern of Fragile Conversions

South University’s precarious position reflects a larger trend: the conversion of failing for-profit schools into nominal nonprofits that rely on tuition, federal aid, and private service contracts to survive. These conversions often preserve the same management structures and business practices while benefiting from the public trust and tax advantages of nonprofit status.

The $35 million balloon payment highlights the risks of these financial engineering strategies—especially when public money is involved but public accountability is weak.

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What Comes Next

With the 2025 deadline approaching, South University faces a pivotal decision: refinance the Main Street loan, restructure operations, or seek new capital through other partners.

If the institution falters, students could once again be caught in the aftermath of a sector-wide collapse—echoing the failures of EDMC, DCEH, and the Art Institutes.

For now, South University continues to operate with limited transparency, under a light-touch accreditor, and with a multimillion-dollar federal debt hanging over its future.

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Sources:

• U.S. Department of Education, Heightened Cash Monitoring List (October 2025)

• Federal Reserve, Main Street Lending Program Overview

• South University financial statements (publicly available data)

• U.S. Department of Education, College Scorecard

• Wikipedia, South University (accessed October 2025)

Ambow Education Pushes AI Agenda Abroad While Raising Red Flags in the U.S.

Ambow Education, once linked to the Chinese Communist Party (CCP), is aggressively exporting its AI-driven education platform, HybriU™, to global markets—even as its footprint in the United States remains small and opaque. The company’s international ambitions raise questions about transparency, governance, and potential political influence.

Ambow’s recent partnership with Bamboo System Technology aims to scale HybriU’s AI-education ecosystem across Southeast Asia, touting a deeper technology stack and expanded distribution. Yet outside China, Ambow’s record is spotty, and critics warn that the firm’s rapid expansion may outpace oversight or educational rigor.

In the U.S., Ambow reportedly explored a partnership with Colorado State University (CSU), though details remain murky. Engagements like these, combined with its involvement with specialized institutions such as the NewSchool of Architecture and Design, suggest a strategy of targeting schools where oversight may be limited and innovation promises can be oversold.

That strategy has already seen major fallout. Bay State College, which Ambow once owned, officially closed its doors in 2024 after years of financial instability, regulatory scrutiny, and declining enrollment. The college’s demise, following Ambow’s acquisition and subsequent divestment, underscores the risks faced by institutions entangled with opaque foreign education firms that promise modernization but deliver financial collapse.

Despite these global ambitions, Ambow’s American presence is modest: a small office tucked in Cupertino, California, suggesting the company may be testing the waters in the U.S. market rather than committing to a major operational footprint.

Recent corporate moves add to the uncertainty. In October 2025, Ambow filed a stock offering for up to $80 million, a move that could significantly dilute existing shareholders and raise questions about its capital needs, liquidity, and long-term strategy. While the offering may be designed to fund global expansion of HybriU™, analysts have noted the lack of clear financial disclosures and the company’s history of volatile performance.

Promotional efforts also raise eyebrows. Former Adtalem executive James Bartholomew has been enlisted to boost Ambow’s profile, but whether his role is purely marketing or part of a broader legitimacy campaign remains unclear.

For U.S. institutions, Ambow’s history—including prior CCP ties, the collapse of Bay State College, and its aggressive share issuance—presents a cautionary tale: a company that combines ambitious AI promises with a murky past and minimal transparency. Ambow’s expansion illustrates a growing challenge in higher education—navigating partnerships with foreign edtech firms while safeguarding institutional integrity, regulatory compliance, and academic quality.

Sources: Ambow Education press releases, SEC filings, Bamboo System Technology announcements, Higher Education Inquirer reporting, and U.S. Department of Education data.

The College Meltdown: A Retrospective

[In 2017, we collaborated with Crush the Street on a video describing the College Meltdown.]  

“Education is not merely a credentialing system; it is a humanizing act that fosters connection, purpose, and community.”

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Origins

The College Meltdown began in the mid-2010s as a blog chronicling the slow collapse of U.S. higher education. Rising tuition, mounting student debt, and corporatization were visible signs, but the deeper crisis was structural: the erosion of public accountability and mission.

By 2015, the warning signs were unmistakable to us. On some campuses, student spaces were closed to host corporate “best practices” conferences. At many schools, adjunct instructors carried the bulk of teaching responsibilities, often without benefits, while administrators celebrated innovation. Higher education was quietly being reshaped to benefit corporations over students and communities — a true meltdown.

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Patterns of the Meltdown

Enrollment in U.S. colleges began declining as early as 2011, reflecting broader demographic shifts: fewer children entering the system and a growing population of older adults. Small colleges, community colleges, and regional public universities were hardest hit, while flagship institutions consolidated wealth and prestige.

Corporate intermediaries known as Online Program Managers (OPMs) managed recruitment, marketing, and course design, taking large portions of tuition while universities retained risk. Fully automated robocolleges emerged, relying on AI-driven templates, predictive analytics, and outsourced grading. While efficient, these systems dehumanized education: students became data points, faculty became monitors, and mentorship disappeared.

“Robocolleges and AI-driven systems reduce humans to data points — an education stripped of connection is no education at all.”

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Feeding the AI Beast

As part of our effort to reclaim knowledge and influence public discourse, we actively contributed to Wikipedia. Over the years, we made more than 12,000 edits on higher education topics, ensuring accurate documentation of predatory practices, adjunct labor, OPMs, and corporatization. These edits both informed the public and, inadvertently, fed the AI beast — large language models and AI systems that scrape Wikipedia for training data now reflect our work, amplifying it in ways we could never have predicted.

“By documenting higher education rigorously, we shaped both public knowledge and the datasets powering AI systems — turning transparency into a tool of influence.”

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Anxiety, Anomie, and Alienation

The College Meltdown documented the mental health toll of these transformations. Rising anxiety, feelings of anomie, and widespread alienation were linked to AI reliance, dehumanized classrooms, insecure faculty labor, and societal pressures. Students felt like credential seekers; faculty suffered burnout.

“Addressing the psychological and social effects of dehumanized education is essential for ethical recovery.”

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Trump, Anti-Intellectualism, and Fear in the Era of Neoliberalism

The project also addressed the broader political and social climate. The Trump era brought rising anti-intellectualism, skepticism toward expertise, and a celebration of market logic over civic and moral education. For many, it was an era of fear: fear of surveillance, fear of litigation, fear of being marginalized in a rapidly corporatized, AI-driven educational system. Neoliberal policies exacerbated these pressures, emphasizing privatization, metrics, and competition over community and care.

“Living under Trump-era neoliberalism, with AI monitoring, corporate oversight, and mass surveillance, education became a space of anxiety as much as learning.”

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Quality of Life and the Call for Rehumanization

Education should serve human well-being, not just revenue. The blog emphasized Quality of Life and advocated for Rehumanization — restoring mentorship, personal connection, and ethical engagement.

“Rehumanization is not a luxury; it is the foundation of meaningful learning.”

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FOIA Requests and Whistleblowers

From the start, The College Meltdown relied on evidence-based reporting. FOIA (Freedom of Information Act) requests were used to obtain internal communications, budgets, and regulatory filings, shining light on opaque practices. Whistleblowers, including adjunct faculty and staff at universities and OPMs, provided firsthand testimony of misconduct, financial malfeasance, and educational dehumanization. Their courage was central to the project’s mission of transparency and accountability.

“Insider testimony and public records revealed the hidden forces reshaping higher education, from corporate influence to predatory practices.”

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Historical Sociology: Understanding the Systemic Collapse

The importance of historical sociology cannot be overstated in analyzing the decline of higher education. By examining the evolution of educational systems, we can identify patterns of inequality, the concentration of power, and the commodification of knowledge. Historical sociology provides the tools to understand how past decisions and structures have led to the current crisis.

“Historical sociology reveals, defines, and formulates patterns of social development, helping us understand the systemic forces at play in education.”

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Naming Bad Actors: Accountability and Reform

A critical aspect of The College Meltdown was the emphasis on naming bad actors — identifying and holding accountable those responsible for the exploitation and degradation of higher education. This included:

• University Administrators: Prioritizing profit over pedagogy.

• Corporate Entities: Robocolleges and OPMs profiting at the expense of educational quality.

• Political Figures and Ultraconservatives: Promoting policies that undermined public education and anti-intellectualism.

“Holding bad actors accountable is essential for meaningful reform and the restoration of education's ethical purpose.”

[In 2016, we called out several bad actors in for-profit higher education, including CEOs Jack Massimino, Kevin Modany, and Todd Nelson.] 

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Existential Aspects of Climate Change

The blog also examined the existential dimensions of climate change. Students and faculty face a dual challenge: preparing for uncertain futures while witnessing environmental degradation accelerate. Higher education itself is implicated, both as a contributor through consumption and as a forum for solutions. The looming climate crisis intensifies anxiety, alienation, and the urgency for ethical, human-centered education.

“Climate change makes the stakes of education existential: our survival, our knowledge, and our moral responsibility are intertwined.”

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Mass Speculation and Financialization

Another critical theme explored was mass speculation and financialization. The expansion of student debt markets, tuition-backed bonds, and corporate investments in higher education transformed students into financial instruments. These speculative dynamics mirrored broader economic instability, creating both a moral and systemic crisis for the educational sector.

“When education becomes a commodity for speculation, learning, mentorship, and ethical development are subordinated to profit and risk metrics.”

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Coverage of Protests and Nonviolent Resistance

The College Meltdown documented student and faculty resistance: tuition protests, adjunct labor actions, and campaigns against predatory OPM arrangements. Nonviolent action was central: teach-ins, sit-ins, and organized campaigns demonstrated moral authority and communal solidarity in the face of systemic pressures, litigation, and corporate intimidation.

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Collaboration and Resistance

Glen McGhee provided exceptional guidance, connecting insights on systemic collapse, inequality, and credential inflation. Guest authors contributed across disciplines and movements, making the blog a living archive of accountability and solidarity:

Guest Contributors:
Bryan Alexander, Ann Bowers, James Michael Brodie, Randall Collins, Garrett Fitzgerald, Erica Gallagher, Henry Giroux, David Halperin, Bill Harrington, Phil Hill, Robert Jensen, Hank Kalet, Neil Kraus, the LACCD Whistleblower, Wendy Lynne Lee, Annelise Orleck, Robert Kelchen, Debbi Potts, Jack Metzger, Derek Newton, Gary Roth, Mark Salisbury, Gary Stocker, Harry Targ, Heidi Weber, Richard Wolff, and Helena Worthen.

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Lessons from the Meltdown

The crisis was systemic. Technology amplified inequality. Corporate higher education rebranded rather than reformed. Adjunctification and labor precarity became normalized. Communities of color and working-class students suffered disproportionately.

Dehumanization emerged as a central theme. AI, automation, and robocolleges prioritized efficiency over mentorship, data over dialogue, and systems over human relationships. Rising anxiety, anomie, and alienation reflected the human toll.

“Rehumanization, mentorship, community, transparency, ethical accountability, and ecological awareness are essential to restore meaningful higher education.”

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Looking Forward

As higher education entered the Trump era, its future remained uncertain. Students, faculty, and communities faced fear under neoliberal policies, AI-driven monitoring, mass surveillance, litigation pressures, ultraconservative influence, climate crises, and financial speculation. Will universities reclaim their role as public goods, or continue as commodified services? The College Meltdown stands as a testament to those who resisted dehumanization and anti-intellectualism. It also calls for Quality of Life, ethical practice, mental well-being, environmental responsibility, and Rehumanization, ensuring education serves the whole person, not just the bottom line. 

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Sources and References

• Washington, Harriet A. Medical Apartheid. Doubleday, 2006.

• Rosenthal, Elisabeth. An American Sickness. Penguin, 2017.

• Skloot, Rebecca. The Immortal Life of Henrietta Lacks. Crown, 2010.

• Nelson, Alondra. Body and Soul. University of Minnesota Press, 2011.

• Paucek, Chip. “2U and the Growth of OPMs.” EdSurge, 2021. link

• Ravitch, Diane. The Death and Life of the Great American School System. Basic Books, 2010.

• Alexander, Bryan. Academia Next. Johns Hopkins University Press, 2020.

• U.S. Department of Education. “Closed School Information.” 2016–2020. link

• Federal Reserve Bank of New York. Student Debt Statistics, 2024. link

• Wayback Machine Archive of College Meltdown Blog: link

A HUGE legal win for MILLIONS of borrowers (Protect Borrowers)

Borrowers just secured a MAJOR victory! In AFT v. U.S. Department of Education (ED), the Trump Administration agreed to protect borrowers enrolled in Income-Driven Repayment (IDR) plans and deliver student debt relief to borrowers making payments under those plans for decades.

This is a huge milestone. At the time AFT originally filed the lawsuit in March 2025—represented by Protect Borrowers and Berger Montague—the Trump Administration had removed the application to enroll in IDR from government websites and had issued a secret order to student loan contractors to halt all IDR enrollment and processing. After we filed, the government quickly resumed accepting applications and, months later, began processing those applications again. ED’s recent agreement is the first time the Trump Administration has publicly committed its intent to follow the law, after representations it made that it wouldn’t cancel debt under certain—and at times, any—IDR plan.

The Administration has now agreed to:



• Cancel student debt for all eligible borrowers enrolled in Income-Based Repayment (IBR), Income-Contingent Repayment, and Pay As You Earn payment plans and the Public Service Loan Forgiveness (PSLF) program;

• Refund any borrower who makes additional payments beyond the date of eligibility for IDR cancellation;

• Process IDR applications and PSLF Buyback applications—including applications for the IBR plan from borrowers without a partial financial hardship.

• Recognize the date a borrower becomes eligible for cancellation as the effective date of discharge and not issue IRS forms suggesting that cancelled debt is taxable for borrowers whose effective date is on or before December 31, 2025; and

• File six monthly status reports with the court on the status of its IDR and PSLF application and loan cancellation processing—increasing transparency and accountability.

This relief will extend to all borrowers.

Borrowers urgently needed this agreement. Prior to it, borrowers eligible to have their loans cancelled in 2025 were at risk of getting stuck with a large tax bill due to the Administration’s processing delays. This is because Trump and Congressional Republicans’ “One Big Beautiful Bill Act” (OBBBA) permanently extended Congress’s 2018 action to exclude cancelled debts for death or disability from federal taxable income—but not all cancelled student loan debt. As a result, millions of borrowers who earn debt relief under an IDR plan after January 1, 2026, could see their taxes skyrocket. Working families can’t shoulder thousands of dollars in additional taxes—they’re already stretched thin by rising costs of living, a weak job market, mounting levels of debt, and OBBBA’s historic cuts to public benefits.