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Wednesday, December 24, 2025

The Expanding Crisis in U.S. Higher Education: OPMs, Student Loan Servicers, Deregulation, Robocolleges, AI, and the Collapse of Accountability

Across the United States, higher education is undergoing a dramatic and dangerous transformation. Corporate contractors, private equity firms, automated learning systems, and predatory loan servicers increasingly dictate how the system operates—while regulators remain absent and the media rarely reports the scale of the crisis. The result is a university system that serves investors and advertisers far more effectively than it serves students.

This evolution reflects a broader pattern documented by Harriet A. Washington, Alondra Nelson, Elisabeth Rosenthal, and Rebecca Skloot: institutions extracting value from vulnerable populations under the guise of public service. Today, many universities—especially those driven by online expansion—operate as financial instruments more than educational institutions.

The OPM Machine and Private Equity Consolidation

Online Program Managers (OPMs) remain central to this shift. Companies like 2U, Academic Partnerships—now Risepoint—and the restructured remnants of Wiley’s OPM division continue expanding into public universities hungry for tuition revenue. Revenue-sharing deals, often hidden from the public, let these companies keep up to 60% of tuition in exchange for aggressive online recruitment and mass-production of courses.

Much of this expansion is fueled by private equity, including Vistria Group, Apollo Global Management, and others that have poured billions into online contractors, publishing houses, test prep firms, and for-profit colleges. Their model prioritizes rapid enrollment growth, relentless marketing, and cost-cutting—regardless of educational quality.

Hyper-Deregulation and the Dismantling of ED

Under the Trump Administration, the federal government dismantled core student protections—Gainful Employment, Borrower Defense, incentive-compensation safeguards, and accreditation oversight. This “hyper-deregulation” created enormous loopholes that OPMs and for-profit companies exploited immediately.

Today, the Department of Education itself is being dismantled, leaving oversight fragmented, understaffed, and in some cases non-functional. With the cat away, the mice will play: predatory companies are accelerating recruitment and acquisition strategies faster than regulators can respond.

Servicers, Contractors, and Tech Platforms Feeding on Borrowers

A constellation of companies profit from the student loan system regardless of borrower outcomes:

Maximus (AidVantage), which manages huge portfolios of federal student loans under opaque contracts.
Navient, a longtime servicer repeatedly accused of steering borrowers into costly options.
Sallie Mae, the original student loan giant, still profiting from private loans to risky borrowers.
Chegg, which transitioned from textbook rental to an AI-driven homework-and-test assistance platform, driving new forms of academic dependency.

Each benefits from weak oversight and an increasingly automated, fragmented educational landscape.

Robocolleges, Robostudents, Roboworkers: The AI Cascade

Artificial Intelligence has magnified the crisis. Universities, under financial pressure, increasingly rely on automated instruction, chatbot advising, and algorithmic grading—what can be called robocolleges. Students, overwhelmed and unsupported, turn to AI tools for essays, homework, and exams—creating robostudents whose learning is outsourced to software rather than internalized.

Meanwhile, employers—especially those influenced by PE-backed workforce platforms—prioritize automation, making human workers interchangeable components in roboworker environments. This raises existential questions about whether higher education prepares people for stable futures or simply feeds them into unstable, algorithm-driven labor markets.

FAFSA Meltdowns, Fraud, and Academic Cheating

The collapse of the new FAFSA system, combined with widespread fraudulent applications, has destabilized enrollment nationwide. Colleges desperate for students have turned to risky recruitment pipelines that enable identity fraud, ghost students, and financial manipulation of aid systems.

Academic cheating, now industrialized through generative AI and contract-cheating platforms, further erodes the integrity of degrees while institutions look away to protect revenue.

Advertising and the Manufacture of “College Mania”

For decades, advertising has propped up the myth that a college degree—any degree, from any institution—guarantees social mobility. Universities, OPMs, lenders, test-prep companies, and ed-tech platforms spend billions on marketing annually. This relentless messaging drives families to take on debt and enroll in programs regardless of cost or quality.

College mania is not organic—it is manufactured. Advertising convinces the public to ignore warning signs that would be obvious in any other consumer market.

A Media Coverage Vacuum

Despite the scale of the crisis, mainstream media offers shockingly little coverage. Investigative journalism units have shrunk, education reporters are overstretched, and major outlets rely heavily on university advertising revenue. The result is a structural conflict of interest: the same companies responsible for predatory practices often fund the media organizations tasked with reporting on them.

When scandals surface—FAFSA failures, servicer misconduct, OPM exploitation—they often disappear within a day’s news cycle. The public remains unaware of how deeply corporate interests now shape higher education.

The Emerging Picture

The U.S. higher education system is no longer simply under strain—it is undergoing a corporate and technological takeover. Private equity owns the pipelines. OPMs run the online infrastructure. Tech companies moderate academic integrity. Servicers profit whether borrowers succeed or fail. Advertisers manufacture demand. Regulators are missing. The media is silent.

In contrast, many other countries maintain strong limits on privatization, enforce strict quality standards, and protect students as consumers. As Washington and Rosenthal argue, exploitation persists not because it is inevitable but because institutions allow—and profit from—it.

Unless the U.S. restores meaningful oversight, reins in private equity, ends predatory revenue-sharing models, rebuilds the Department of Education, and demands transparency across all contractors, the system will continue to deteriorate. And students, especially those already marginalized, will pay the price.

Sources (Selection)

Harriet A. Washington – Medical Apartheid; Carte Blanche
Rebecca Skloot – The Immortal Life of Henrietta Lacks
Elisabeth Rosenthal – An American Sickness
Alondra Nelson – Body and Soul
Stephanie Hall & The Century Foundation – work on OPMs and revenue sharing
Robert Shireman – analyses of for-profit colleges and PE ownership
GAO (Government Accountability Office) reports on OPMs and student loan servicing
ED OIG and FTC public reports on oversight failures (various years)
National Student Legal Defense Network investigations
Federal Student Aid servicer audits and public documentation

Tuesday, December 16, 2025

Pyrrhic Defeat and the Student Loan Portfolio: How a Managed Meltdown Enables Unauthorized Asset Sales

In classical history, a Pyrrhic victory refers to a win so costly that it undermines the very cause it was meant to advance. Less discussed, but increasingly relevant to modern governance, is the inverse strategy: the Pyrrhic defeat. In this model, short-term failure is tolerated—or even cultivated—because it enables outcomes that would otherwise be politically, legally, or institutionally impossible. When applied to public finance, pyrrhic defeat theory helps explain how the apparent collapse of a system can be leveraged to justify radical restructuring, privatization, or liquidation of public assets.

Nowhere is this framework more relevant than in the management of the federal student loan portfolio.

The federal student loan portfolio, totaling roughly $1.6 to $1.7 trillion, is not merely an accounting entry. It is one of the largest consumer credit systems in the world and functions simultaneously as a public policy tool, a long-term revenue stream, a data infrastructure, and a political liability. It shapes who can access higher education, how risk is distributed across generations, and how the federal government exerts leverage over the postsecondary sector. Precisely because of its scale and visibility, the portfolio is uniquely vulnerable to narrative reframing.

That vulnerability was not accidental. It was constructed over decades through a series of policy decisions that stripped borrowers of normal consumer protections while preserving the financial attractiveness of student debt as an asset. Chief among these decisions was the gradual removal of bankruptcy protections for student loans. By rendering student debt effectively nondischargeable except under the narrow and punitive “undue hardship” standard, lawmakers transformed education loans into a uniquely durable financial instrument. Unlike mortgages, credit cards, or medical debt, student loans could follow borrowers for life, enforced through wage garnishment, tax refund seizure, and Social Security offsets.

This transformation made student loans exceptionally attractive for securitization. Student Loan Asset-Backed Securities, or SLABS, flourished precisely because the underlying loans were shielded from traditional credit risk. Investors could rely not on educational outcomes or borrower prosperity, but on the legal certainty that the debt would remain collectible. Even during economic downturns, SLABS were marketed as relatively stable instruments, insulated from the discharge risks that plagued other forms of consumer credit.

Private banks once dominated this market. Sallie Mae, originally a government-sponsored enterprise, became a central player in both originating and securitizing student loans, while Navient emerged as a major servicer and asset manager. Yet as Higher Education Inquirer documented in early 2025, banks ultimately lost control of student lending. Rising defaults, public outrage, state enforcement actions, and mounting evidence of predatory practices made the sector politically radioactive. The federal government stepped in not as a reformer, but as a backstop, absorbing the portfolio and stabilizing a system private finance could no longer manage without reputational and regulatory risk.

That history reveals a recurring pattern. When student lending fails in private hands, it becomes public. When the public system is allowed to fail, it becomes ripe for re-privatization.

A portfolio does not need to collapse to be declared unmanageable. It only needs to appear dysfunctional enough to justify extraordinary intervention.

The post-pandemic repayment restart, persistent servicing failures, legal challenges to income-driven repayment plans, and widespread borrower confusion have all contributed to a growing narrative of systemic breakdown. Servicers such as Maximus, operating under the Aidvantage brand, MOHELA, and others have struggled to process payments accurately, manage forgiveness programs, and provide reliable customer service. These failures are often framed as bureaucratic incompetence rather than as predictable consequences of outsourcing public functions to private contractors whose incentives are misaligned with borrower welfare.

Navient’s exit from federal servicing did not mark a retreat from the student loan ecosystem so much as a repositioning, as it continued to benefit from private loan portfolios and legacy SLABS exposure. Sallie Mae, rebranded and fully privatized, remains deeply embedded in the private student loan market, which continues to rely on the same nondischargeability framework that props up federal lending.

Crucially, these servicing failures cannot be separated from the earlier elimination of bankruptcy as a safety valve. In normal credit markets, distress is resolved through restructuring or discharge. In student lending, distress accumulates. Borrowers remain trapped, servicers remain paid, and policymakers are confronted with a swelling mass of unresolved debt that can be labeled a crisis at any politically convenient moment.

Under pyrrhic defeat theory, such a crisis is not merely tolerated. It is useful.

Once the federal portfolio is framed as broken beyond repair, the range of acceptable solutions expands. What would be politically impossible in a stable system becomes plausible in an emergency. Asset transfers, securitization of federal loans, expansion of SLABS-like instruments backed by government guarantees, or long-term conveyance of servicing and collection rights can be presented as pragmatic fixes rather than ideological choices.

A Trump administration would be particularly well positioned to exploit this dynamic. Skeptical of debt relief, hostile to administrative governance, and ideologically aligned with privatization, such an administration could recast the portfolio as a failed public experiment inherited from predecessors. In that framing, selling or offloading the portfolio is not an abdication of responsibility but an act of fiscal discipline.

Importantly, this need not take the form of an explicit, congressionally authorized sale. Risk can be shifted through securitization. Revenue streams can be monetized. Servicing authority can be extended indefinitely to private firms. Data control can migrate outside public oversight. Over time, these steps amount to de facto privatization, even if the loans remain nominally federal. The infrastructure, incentives, and profits move outward, while the political blame remains with the state.

This is where earlier McKinsey & Company studies reenter the conversation. Long before the current turmoil, McKinsey analyses identified high servicing costs, fragmented contractor oversight, weak borrower segmentation, and low political returns on administrative complexity. While framed as efficiency critiques, these studies implicitly favored market-oriented restructuring. In a crisis environment, such recommendations become blueprints for divestment.

The danger of a pyrrhic defeat strategy is that it delivers a short-term political win at the cost of long-term public capacity. Selling or functionally privatizing the student loan portfolio may improve fiscal optics, but it permanently weakens democratic control over higher education finance. Borrowers, already stripped of bankruptcy protections, lose what remains of public accountability. Policymakers lose leverage over tuition inflation and institutional behavior. The federal government relinquishes a powerful counter-cyclical tool. What remains is a debt regime optimized for extraction, enforced by servicers, securitized for investors, and detached from educational outcomes.

The defeat is real. It is borne by students, families, and future generations. The victory belongs to those who acquire distressed public assets and those who benefit ideologically from shrinking the public sphere.

Pyrrhic defeat theory reminds us that collapse is not always accidental. In the case of the federal student loan portfolio, what appears to be dysfunction or incompetence may instead be strategic surrender: a willingness to let a public system deteriorate so that it can be sold off, securitized, or outsourced under the banner of necessity. If that happens, it will not be remembered as a policy error, but as a deliberate transfer of public wealth and power—made possible by decades of legal engineering that began when bankruptcy protection was taken away and ended with student debt transformed into a permanent financial asset.

Sources

Higher Education Inquirer. “When Banks Lost Control of Student Loan Lending.” January 2025.
https://www.highereducationinquirer.org/2025/01/when-banks-lost-control-of-student-loan.html

U.S. Department of Education, Federal Student Aid. FY 2024 Annual Agency Performance Report. January 13, 2025.

U.S. Department of Education, Federal Student Aid. Federal Student Loan Portfolio Data and Statistics, various years.

Government Accountability Office. Student Loans: Key Weaknesses in Servicing and Oversight, multiple reports.

Congressional Budget Office. The Federal Student Loan Portfolio: Budgetary Costs and Policy Options.

U.S. Congress. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and prior amendments affecting student loan dischargeability.

Pardo, Rafael I., and Michelle R. Lacey. “The Real Student-Loan Scandal: Undue Hardship Discharge Litigation.” American Bankruptcy Law Journal.

Financial Crisis Inquiry Commission materials on asset-backed securities and consumer credit markets.

McKinsey & Company. Student Loan Servicing, Portfolio Optimization, and Risk Management Analyses, prepared for federal agencies and financial institutions, 2010s–early 2020s.

Higher Education Inquirer archives on SLABS, servicers, privatization, deregulation, and student loan policy.

Thursday, December 4, 2025

Hyper-Deregulation and the College Meltdown

In March 2025, Studio Enterprise—the online program manager behind South University—published an article titled “A New Era for Higher Education: Embracing Deregulation Amid the DOE’s Transformation.” Written in anticipation of a shifting political landscape, the article framed coming deregulation as an “opportunity” for flexibility and innovation. Studio Enterprise CEO Bryan Newman presented the moment as a chance for institutions and their contractors to do more with fewer federal constraints, implying that regulatory retreat would improve student choice and institutional agility.

What was framed as a strategic easing of oversight has instead arrived as a form of collapse. By late 2025, the U.S. Department of Education has become, in functional terms, a zombie agency—still existing on paper, but stripped of its capacity to regulate, enforce, or even communicate. Consumer protection, accreditation monitoring, program review, financial oversight, and FOIA responses have slowed or stopped entirely. The agency is walking, but no longer awake.

This vacuum has emboldened not only online program managers like Studio Enterprise and giants like 2U, but also a wide array of entities that rely on federal inaction to profit from students. The University of Phoenix—long emblematic of regulatory cat-and-mouse games in the for-profit sector—now faces minimal scrutiny, continuing to recruit aggressively while the federal watchdog sleeps. Elite universities contracting with 2U continue to launch expensive online degrees and certificates whose marketing and outcomes would once have been examined more closely.

Student loan servicers and private lenders have also moved quickly to capitalize on the chaos. Companies like Aidvantage (Maximus), Nelnet, and MOHELA now operate in an environment where enforcement actions, compliance reviews, and borrower complaint investigations have slowed to a near standstill. Servicers once accused of steering borrowers into costly forbearances or mishandling IDR accounts now face fewer barriers and far less public oversight. The dismantling of the Department has also disrupted the small channels borrowers once had for correcting servicing errors or disputing inaccurate records.

Private lenders—including Sallie Mae, Navient, and a growing constellation of fintech-style student loan companies—have seized the opportunity to expand high-interest refinance and private loan products. Without active federal oversight, marketing claims, credit evaluation practices, and default-related consequences have become increasingly opaque. Borrowers with limited financial literacy or unstable incomes are again being targeted with products that resemble the subprime boom of the early 2010s, but with even fewer regulatory guardrails.

Hyper-deregulation has also destabilized the federal loan system itself. Processing backlogs have grown. Borrower defense and closed-school discharge petitions sit in limbo. Decisions are delayed, reversed, or ignored. Automated notices go out while human review has hollowed out entirely. Students struggling with servicer errors find there is no functioning authority to appeal to—not even the already stretched ombudsman’s office, which is now overwhelmed and under-directed.

Across the sector, the same pattern is visible: institutions and corporations functioning without meaningful oversight. OPMs determine academic structures that universities should control. Lead generators push deceptive marketing campaigns with impunity. Universities desperate for enrollment sign long-term revenue-sharing deals without public transparency. Servicers mismanage accounts and communications while borrowers bear the consequences. Private lenders accelerate their expansion into communities least able to withstand financial harm.

Students feel the effect first and most painfully. They face rising costs, misleading claims, aggressive recruitment, and a federal loan system that can no longer assure accuracy or fairness. The collapse of oversight is not theoretical. It manifests in missed payments, lost paperwork, incorrect balances, unresolved appeals, and ballooning debt. For many, there is now no reliable path to recourse.

Studio Enterprise saw deregulation coming. What it left unsaid is that removing federal guardrails does not produce innovation. It produces confusion, predation, and unequal power. Hyper-deregulation rewards those who operate in the shadows—OPMs, for-profit chains, high-fee servicers, and private lenders—while those seeking education and mobility carry the burden.

This moment is not an evolution. It is an abandonment. Higher education is drifting into an environment where profit extraction flourishes while public protection evaporates. Unless new sources of oversight emerge—federal, state, journalistic, or civic—the most vulnerable students will continue to pay the highest price for the disappearance of the referee.

Sources

Studio Enterprise, A New Era for Higher Education: Embracing Deregulation Amid the DOE’s Transformation (March 2025).
HEI archives on OPMs, for-profit colleges, and regulatory capture (2010–2025).
Public reporting and advocacy analyses on student loan servicers, including Navient, MOHELA, Nelnet, Aidvantage/Maximus, and Sallie Mae (2015–2025).
FOIA request logs, non-responses, and stalled borrower relief cases documented by HEI and partner organizations (2024–2025).
Federal higher education enforcement trends, 2023–2025.

Thursday, November 13, 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.”

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.

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.

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.

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.

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.

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.

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

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

Tuesday, November 11, 2025

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.

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

Friday, August 22, 2025

The Right-Wing Roots of EdTech

The modern EdTech industry is often portrayed as a neutral, innovative force, but its origins are deeply political. Its growth has been fueled by a fusion of neoliberal economics, right-wing techno-utopianism, patriarchy, and classism, reinforced by racialized inequality. One of the key intellectual architects of this vision was George Gilder, a conservative supply-side evangelist whose work glorified technology and markets as liberating forces. His influence helped pave the way for the “Gilder Effect”: a reshaping of education into a market where technology, finance, and ideology collide, often at the expense of marginalized students and workers.

The for-profit college boom provides the clearest demonstration of how the Gilder Effect operates. John Sperling’s University of Phoenix, later run by executives like Todd Nelson, was engineered as a credential factory, funded by federal student aid and Wall Street. Its model was then exported across the sector, including Risepoint (formerly Academic Partnerships), a company that sold universities on revenue-sharing deals for online programs. These ventures disproportionately targeted working-class women, single mothers, military veterans, and Black and Latino students. The model was not accidental—it was designed to exploit populations with the least generational wealth and the most limited alternatives. Here, patriarchy, classism, and racism intersected: students from marginalized backgrounds were marketed promises of upward mobility but instead left with debt, unstable credentials, and limited job prospects.

Clayton Christensen and Michael Horn of Harvard Business School popularized the concept of “disruption,” providing a respectable academic justification for dismantling public higher education. Their theory of disruptive innovation framed traditional universities as outdated and made way for venture-capital-backed intermediaries. Yet this rhetoric concealed a brutal truth: disruption worked not by empowering the disadvantaged but by extracting value from them, often reinforcing existing inequalities of race, gender, and class.

The rise and collapse of 2U shows how this ideology plays out. Founded in 2008, 2U promised to bring elite universities online, selling the dream of access to graduate degrees for working professionals. Its “flywheel effect” growth strategy relied on massive enrollment expansion and unsustainable spending. Despite raising billions, the company never turned a profit. Its high-profile acquisition of edX from Harvard and MIT only deepened its financial instability. When 2U filed for bankruptcy, it was not simply a corporate failure—it was a symptom of an entire system built on hype and dispossession.

2U also became notorious for its workplace practices. In 2015, it faced a pregnancy discrimination lawsuit after firing an enrollment director who disclosed her pregnancy. Women workers, especially mothers, were treated as expendable, a reflection of patriarchal corporate norms. Meanwhile, many front-line employees—disproportionately women and people of color—faced surveillance, low wages, and impossible sales quotas. Here the intersections of race, gender, and class were not incidental but central to the business model. The company extracted labor from marginalized workers while selling an educational dream to marginalized students, creating a cycle of exploitation at both ends of the pipeline.

Financialization extended these dynamics. Lenders like Sallie Mae and Navient, and servicers like Maximus, turned students into streams of revenue, with Student Loan Asset-Backed Securities (SLABS) trading debt obligations on Wall Street. Universities, including Purdue Global and University of Arizona Global, rebranded failing for-profits as “public” ventures, but their revenue-driven practices remained intact. These arrangements consistently offloaded risk onto working-class students, especially women and students of color, while enriching executives and investors.

The Gilder Effect, then, is not just about technology or efficiency. It is about reshaping higher education into a site of extraction, where the burdens of debt and labor fall hardest on those already disadvantaged by patriarchy, classism, and racism. Intersectionality reveals what the industry’s boosters obscure: EdTech has not democratized education but has deepened inequality. The failure of 2U and the persistence of predatory for-profit models are not accidents—they are the logical outcome of an ideological project rooted in conservative economics and systemic oppression.

Sources

EdSurge. “What a New Strategy at 2U Means for the Future of Online Higher Education.” August 5, 2022. https://www.edsurge.com/news/2022-08-05-what-a-new-strategy-at-2u-means-for-the-future-of-online-higher-education
Newswire. “2U Faces Lawsuit for Pregnancy Discrimination.” June 2015. https://www.newswire.com/news/2u-faces-lawsuit-for-pregnancy-discrimination
Christensen, Clayton M. and Michael B. Horn. Disrupting Class. McGraw-Hill, 2008.
McMillan Cottom, Tressie. Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy. The New Press, 2017.
Cellini, Stephanie Riegg. “For-Profit Higher Education: An Assessment of Costs and Benefits.” National Bureau of Economic Research, 2012.
Rosenthal, Elisabeth. An American Sickness. Penguin, 2017.

Tuesday, July 1, 2025

Songs for the Student Loan Struggle

In the United States, where over 43 million people carry more than $1.7 trillion in student debt, it’s no wonder that the crisis has made its way into the bloodstream of American music. Across genres—hip-hop, punk, folk, pop, indie, and beyond—artists have given voice to the quiet desperation and loud frustration of a generation who bought the dream of higher education, only to find themselves overworked, underpaid, and perpetually in debt.

Student loans aren’t just a financial burden—they’re a cultural trauma. They delay marriages and children, block homeownership, exacerbate mental health struggles, and fuel cycles of economic precarity. For many, they are the symbol of a promise broken. Music has become one of the only honest mirrors left—naming what politicians won’t and exposing what marketing campaigns obscure.

Few songs capture this generational malaise as directly as Twenty One Pilots’ “Stressed Out.” In one of its most pointed lines, Tyler Joseph sings:

“Out of student loans and treehouse homes we all would take the latter.”

The lyric, delivered like a casual aside, cuts to the heart of the matter. The dream of adulthood has been replaced by nostalgia for childhood. Treehouse homes—imaginary, fragile, idealized—are preferred to the very real pressure of loans that never seem to shrink. The song became an anthem not just because of its catchy hook, but because it gave voice to a shared longing to escape a system that feels rigged from the start.

In folk and Americana, the tradition of protest lives on through artists like David Rovics, who sings candidly about capitalism, debt, and the false promise of meritocracy. Anaïs Mitchell’s “Why We Build the Wall,” from Hadestown, offers a parable of entrapment that mirrors the moral logic behind lifelong indebtedness—“we build the wall to keep us free,” the characters insist, as they cage themselves in the name of security.

Hip-hop, born from systemic exclusion, has long offered some of the most unflinching commentary on education, class, and race. Dee-1’s “Sallie Mae Back” is a rare moment of triumph—his celebration of paying off his loans is joyful, but also revealing: the milestone is treated like beating a boss in a video game, an exceptional feat in a system designed to trap. Meanwhile, J. Cole, Kendrick Lamar, and Noname have all touched on the disillusionment that comes from pursuing education and still being locked out of wealth and opportunity.

In the indie and emo scenes, debt doesn’t always appear as a headline—it’s in the background, a persistent hum of dread. Phoebe Bridgers’ ballads of suspended adulthood and unfulfilled expectations capture the emotional aftermath of investing in a future that hasn’t arrived. Bright Eyes’ early 2000s work resonated with disaffected students who already sensed that the system was cracking. Their songs are not about loans explicitly, but about what loans represent: being stuck, being lied to, being tired.

Punk, true to form, skips subtlety. DIY bands across the country scream out titles like “Broke and Educated” and “Loan Shark Nation” to crowds of kids who know the words by heart. These songs aren’t just cathartic—they’re organizing tools, naming the shared betrayal of a generation taught that college was a way out. Instead, it became a life sentence.

Country music has added its voice too, quietly but powerfully. Artists like Sturgill Simpson and Tyler Childers have used old-school storytelling to critique modern economic realities. Their characters are often trying to make ends meet in a world that seems designed to keep them down, and college debt is one of many invisible fences. Kacey Musgraves, in her ballads of broken dreams and gentle rebellion, speaks to the emotional toll of chasing a version of success that was never really for us.

In pop and R&B, the mood shifts but the themes remain. Lizzo’s affirmations of self-worth have become survival anthems for those trying to thrive despite systemic sabotage. Billie Eilish, with her whispered melancholy, captures the numbness that often follows years of grinding toward a goal that keeps moving.

Even instrumental genres reflect the weight of education debt. Jazz musicians and conservatory-trained artists emerge with six-figure loans and few stable jobs. Their music may not name the debt, but it carries its echoes—in the tension, the improvisation, the repetition of unresolved progressions.

Taken together, these songs form a shadow archive of student debt in America. This is not a playlist of protest songs in the traditional sense, but a collective cultural record of what it feels like to be promised opportunity and handed obligation. To be sold a degree and saddled with interest. To be told to work hard, only to discover the rules were never fair.

Twenty One Pilots’ “Stressed Out” may have sounded playful on first listen. But for many borrowers, that line about choosing treehouses over loans is all too real. It’s a cry for retreat—but also a quiet act of rebellion. It reminds us that the system has failed and that we are not alone in feeling crushed by its weight.

Let the music play. Let it say what policymakers won’t. Let it remind us that while the loans may be individual, the struggle is collective—and the chorus of resistance is still growing louder.

[Editor's note: A 2019 version of this article is here.]

Playlist: Songs for the Student Loan Struggle

Stressed Out – Twenty One Pilots
Sallie Mae Back – Dee-1
Why We Build the Wall – Anaïs Mitchell
Brackets – J. Cole
Alright – Kendrick Lamar
Broke and Educated – DIY punk band (Bandcamp)
Kyoto – Phoebe Bridgers
Landlocked Blues – Bright Eyes
Call to Arms – Sturgill Simpson
High Horse – Kacey Musgraves
Truth Hurts – Lizzo
everything i wanted – Billie Eilish
Guillotine – Death Grips
Everything Can Change – David Rovics
Good as Hell – Lizzo
We Are Nowhere and It’s Now – Bright Eyes

Tuesday, March 25, 2025

The Evolving Landscape of Student Lending: Fintech Disruption and Bank Adaptation (Glen McGhee)

The student loan market represents a significant segment of consumer lending in the United States, with approximately $1.7 trillion in outstanding debt. This market is undergoing profound transformation as financial technology companies challenge traditional banking institutions, offering innovative lending models and digital-first experiences. This report compares the current footprint of fintechs and banks in student lending and analyzes potential market shifts if federal loan guarantees were eliminated.

The student loan market continues to expand at a significant pace despite periodic concerns about sustainability. The private student loan sector alone was valued at $412.7 billion in 2023 and is projected to reach $980.8 billion by 2032, representing a compound annual growth rate of 10.1%15. Overall, the student loans market is growing at approximately 9.2% annually over the next five years7, indicating robust demand despite economic uncertainties and policy fluctuations.

Traditional banks maintain a significant but gradually diminishing presence in the student loan market. These institutions typically offer standardized loan products with competitive rates for students with established credit histories or qualified cosigners. Their underwriting processes tend to be more conservative than newer market entrants, focusing primarily on traditional creditworthiness metrics and income verification.

Among the major bank participants in student lending, Citizens Bank stands out for its nationwide offerings for undergraduate and graduate students, as well as parent loans. The bank distinguishes itself through its multiyear approval process, reducing the need for repeated hard credit inquiries for continuing students2. Other significant bank participants include PNC Bank, which offers specialized loans for health and medical professions, and Sallie Mae, a pioneer in private student lending that has evolved from its origins as a government-sponsored enterprise.

Financial technology companies have aggressively entered the student loan market, introducing innovations in product design, underwriting methodologies, and customer experience. These entrants typically operate with lower overhead costs than traditional banks and leverage alternative data sources for credit decisions, potentially expanding access to students who might not qualify under conventional underwriting standards.

SoFi represents one of the most prominent fintech lenders, distinguished by its no-fee structure and flexible repayment arrangements with fixed APRs ranging from 4.19% to 14.83%16. College Ave provides private student loans covering up to 100% of school-certified attendance costs with APRs ranging from 3.99% to 17.99%16. Ascent has gained market recognition for its non-cosigned loan options that use future income potential rather than current credit history as the primary underwriting criterion.

Marketplace platforms have emerged as important intermediaries in the student loan ecosystem. LendKey partners with credit unions and community banks, functioning as both a marketplace and loan servicer5. Credible allows borrowers to compare offers from multiple lenders through a single application and soft credit check, streamlining the shopping process for students and families5.

Based on the search results, the following represent key players in the current student loan market:

Citizens Bank - Offers multiyear approval and diverse loan options
PNC Bank - Specializes in healthcare profession loans and offers scholarship opportunities
Sallie Mae - Pioneer in student lending with undergraduate and graduate loan options
Discover - Provides comprehensive student loan offerings with competitive rates
Wells Fargo - Previously a major player but has exited the market
MEFA - Regional specialized educational lender
Education Loan Finance (ELFI) - The student loan division of SouthEast Bank
Custom Choice - Specialized private student loan provider

SoFi - Known for no-fee structure and comprehensive financial products
College Ave - Offers loans covering up to 100% of attendance costs
Earnest - Features borrower-friendly terms and competitive rates
Ascent - Specializes in non-cosigned loan alternatives
LendKey - Marketplace connecting borrowers with community banks and credit unions
Credible - Student loan comparison marketplace
MPower Financing - Focuses on international students
Juno - Group-based negotiation platform for better loan terms
Iowa Student Loan - Nonprofit state-based lender
EDvestinU - Nonprofit lender affiliated with New Hampshire Higher Education Loan Corporation
Stride Funding - Offers income share agreements and alternative financing models
CommonBond - Socially responsible student lender (not mentioned in results but a known market participant)

These institutions represent a mix of traditional financial services providers and newer, technology-focused entrants. The market continues to evolve with mergers, acquisitions, and strategic partnerships reshaping competitive dynamics.

The potential elimination of federal student loan guarantees would fundamentally alter the market landscape, likely causing significant contraction and restructuring. This change would transform both the size of the market and the nature of participating institutions.

Without federal guarantees, student lending would revert to pure risk-based lending principles, dramatically changing accessibility and terms. The current market structure exists largely because federal guarantees remove most default risk for lenders, enabling broader access to financing and more favorable terms than would otherwise be available.

A Reddit discussion highlighted this dynamic: "Making students loans not guaranteed and having it work like a real loan and with that allowing it to be bankruptible would seem like a good idea"10. However, this would mean loan approval would be "based on criteria such as the borrower's ability to repay within a reasonable time frame and their high school performance"10, fundamentally changing who could access education financing.

If federal guarantees disappeared, the market would likely undergo significant consolidation:

: Banks with substantial balance sheets and diverse revenue streams would have the greatest capacity to absorb increased lending risk. Among current participants, Citizens Bank, PNC Bank, and Discover would be best positioned to maintain student lending operations, though with substantially tightened criteria and higher rates.
: Only those fintechs with sophisticated risk assessment models, alternative revenue streams, or access to institutional capital would likely survive. SoFi, having diversified beyond student lending into banking, investing, and insurance, would be among the strongest contenders. Earnest, with its sophisticated approach to underwriting, and Ascent, which already specializes in future-earnings-based lending, might also persist.
: The market would likely shift toward income-based repayment models like those offered by Stride Funding, which ties repayment to future earnings rather than relying on traditional debt structures9. These models effectively shift some risk from borrowers to investors who bet on future earnings potential.

The student loan market would likely contract substantially from its current size, perhaps by 50-70%, as lenders would focus primarily on:

Students pursuing high-return degrees at prestigious institutions
Borrowers with exceptional credit profiles or financially strong cosigners
Fields of study with clear employment paths and strong salary prospects

The market might realistically shrink to 7-10 major players from the current diverse landscape. The following institutions would be most likely to maintain significant student lending operations:

Citizens Bank
PNC Bank
Discover
SoFi
Earnest
Ascent
Stride Funding or similar income-share agreement providers

Smaller regional banks, credit unions, and less-capitalized fintechs would likely exit the market entirely or dramatically reduce their student lending portfolios.

The removal of federal student loan guarantees would represent a fundamental restructuring of higher education financing in America. While it might address concerns about tuition inflation and excessive student debt, it would also significantly restrict educational access for many students, particularly those from lower and middle-income backgrounds.

Financial institutions with sophisticated risk assessment capabilities, substantial capital reserves, and diversified business models would be best positioned to remain in the market. The shift would likely accelerate innovation in alternative financing models, potentially leading to more alignment between educational costs and expected post-graduation outcomes.

For students, the changed landscape would require more careful consideration of educational investments, with greater emphasis on return-on-investment calculations for various fields of study and institutions. For higher education institutions, this shift would create strong pressure to demonstrate value and employment outcomes, potentially leading to significant changes in program offerings and pricing models.

This market transformation would ultimately test whether private financial markets alone can effectively finance broad access to higher education or whether some form of public support remains necessary to achieve societal goals of educational opportunity and economic mobility.

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