Trump Signs Crypto Bill: A Gateway to Corruption and Financial Oppression

On July 17, 2025, Donald Trump signed into law the “American Digital Freedom Act,” a sweeping piece of legislation that federalizes and deregulates cryptocurrency markets in the United States. While hailed by supporters as a victory for innovation and financial autonomy, the new law is more accurately understood as a major victory for crypto billionaires, libertarian think tanks, and political operatives seeking to reshape American financial life with minimal public accountability.

This bill, which strips oversight powers from the Securities and Exchange Commission (SEC) and restricts consumer protections, was heavily influenced by the cryptocurrency lobby. It legitimizes risky, unregulated financial products, undermines state enforcement power, and further embeds private power into public infrastructure. Far from delivering financial freedom to everyday Americans, this law opens the door to unprecedented corruption and control, continuing a pattern long warned about in the pages of the Higher Education Inquirer.

Echoes of Student Debt, EdTech Fraud, and Neoliberal Capture

In our May 2025 article, "How the New Cryptocurrency Bill Could Open the Door to Corruption and Control," we warned that the crypto bill was less about democratizing finance and more about creating new extractive markets. As with the for-profit college industry, the gigification of academic labor, and the student loan crisis, the crypto sector markets itself to the financially desperate, the underemployed, and the debt-burdened.

Cryptocurrency platforms promise opportunity and empowerment, just as subprime for-profit colleges did during the early 2000s. Instead, they profit from volatility, speculation, and financial illiteracy. The collapse of companies like FTX and the unraveling of various "blockchain for education" experiments—like those pitched by Minerva, 2U, and Lambda School—should have served as a warning. Instead, the American Digital Freedom Act enshrines their business models into law.

From Financial Risk to Political Weapon

While proponents describe the law as a pro-innovation framework, the political context suggests otherwise. The crypto bill was pushed through by some of the same operatives behind efforts to weaken the Department of Education, dismantle Title IX protections, and privatize public universities. The legislation also dovetails with Trump-aligned plans to create “digital citizenship” systems linked to financial identity—a move critics argue could be used to surveil and suppress dissent.

By reducing AML (Anti-Money Laundering) standards and weakening Know Your Customer (KYC) rules, the new law also makes it easier for dark money to enter U.S. elections and political campaigns. The line between crypto lobbying, national security risks, and voter manipulation is already blurred—and this legislation will only accelerate the trend.

As the Higher Education Inquirer, there is a growing convergence of tech capital, deregulated finance, and political ideology that promotes “freedom” while gutting accountability. The crypto bill fits squarely within this pattern.

Targeting the Dispossessed

The communities that will bear the brunt of the consequences are already stretched thin: working-class students drowning in loan debt, unemployed graduates with useless credentials, and gig workers living paycheck to paycheck. These are the same groups now being told that speculative crypto investments are their only shot at economic mobility.

It’s no surprise that crypto apps are targeting community college students, veterans, and underbanked populations with gamified interfaces and referral incentives—echoing the same predatory logic as diploma mills. Instead of building generational wealth, these platforms often lock users into a new form of digital serfdom, driven by data extraction and monetized hype.

The Long Game of Financialized Authoritarianism

The Higher Education Inquirer has consistently highlighted the dangers of unregulated private capital colonizing public institutions. Whether through for-profit colleges, hollow credential marketplaces, or now unregulated crypto markets, the pattern is the same: promise empowerment, deliver exploitation, and consolidate power.

The crypto bill signed by Trump is not an end—it is a gateway. A gateway to a political economy where finance, tech, and politics are indistinguishable, and where the price of dissent may be counted not only in speech, but in digital wallets and blockchain-based reputations.

We will continue reporting on the consequences of this legislation—especially where it intersects with higher education, student debt, and the erosion of democratic infrastructure. If you’ve been affected by crypto scams in academic settings or targeted by blockchain-backed “innovation” schemes, we want to hear from you.

Sources:

• “How the New Cryptocurrency Bill Could Open the Door to Corruption and Control,” Higher Education Inquirer, May 2025

• “Socrates in Space: University of Austin and the Billionaire Pipeline,” Higher Education Inquirer, July 2024

• U.S. Congressional Record, July 17, 2025

• CoinDesk, “Trump Signs Historic Crypto Deregulation Bill,” July 2025

• Public Citizen, “Crypto Lobby’s Push to Rewrite U.S. Law,” June 2025

• SEC Chair Gary Gensler’s Remarks, April–June 2025

• Financial Times, “Digital Authoritarianism and Financial Surveillance,” May 2025

FOIA Requests Are Foundational to HEI Research

The Higher Education Inquirer has filed 34 Freedom of Information requests with the US Department of Education over the last two years.  The documents that we receive have been essential ingredients in the legitimacy of our articles.  We also submit FOIA requests to the Federal Trade Commission, the Department of Veterans Affairs, and the Department of Defense, as well as media requests with the State Department and Securities and Exchange Commission.  As a public service, we also provide the documents, in digital form, at no cost to those who request them.  

 

Corinthian Colleges: A For-Profit Empire, Lifelong Debt, and No Justice for the Victims

In the pantheon of higher education scandals, few match the scale and damage caused by Corinthian Colleges Inc. (CCI). Once hailed by Wall Street as a model for the future of "career education," Corinthian collapsed in 2015 amid federal investigations, lawsuits, and public outrage. The company left behind a trail of financial ruin: more than half a million former students burdened with life-altering debt and degrees of little or no value.

And yet—no one went to jail.

 
A Machine Built on Deception

Founded in 1995, Corinthian Colleges grew rapidly by acquiring small vocational schools and rebranding them under the names Everest, Heald, and WyoTech. Backed by investors and pumped with federal financial aid dollars, the company aggressively marketed to low-income individuals, single mothers, veterans, and people of color—those often excluded from traditional higher education.

Its business model depended not on education outcomes, but on enrollment numbers and federal subsidies. Behind its TV commercials and high-pressure call centers, Corinthian was fabricating job placement rates, enrolling unqualified students, and saddling them with tens of thousands in debt for programs that were often substandard or unaccredited.

At its peak, Corinthian enrolled more than 100,000 students and took in over $1.4 billion annually in federal aid.

 
The Collapse and the Fallout

In 2014, under pressure from federal and state regulators—particularly California Attorney General Kamala Harris—the U.S. Department of Education began tightening scrutiny. When CCI failed to provide accurate job placement data, the government cut off access to Title IV funds. Corinthian tried to sell off its campuses piecemeal before declaring bankruptcy in 2015.

The closure stranded tens of thousands of students mid-degree and left hundreds of thousands with massive debt for worthless credentials.
Lifelong Damage

Many Corinthian students never recovered. Some lost years of work and study. Many saw their credit scores destroyed. Others defaulted and faced wage garnishment, loss of tax refunds, and psychological trauma.

Although the Biden administration in 2022 announced $5.8 billion in loan cancellation for more than 560,000 former Corinthian students—the largest discharge of federal student loans in U.S. history—many students were excluded. Others had taken out private loans or never received proper notification. Some died before receiving relief. Others continue to pay interest on fraudulent debts.

 
The Executives Who Walked Away

While students and their families were left in financial ruin, Corinthian’s executives escaped virtually untouched.

Jack D. Massimino, Corinthian’s longtime CEO and chairman, collected millions in compensation over the years—reportedly more than $3 million in a single year (2010). Despite leading the company through its most fraudulent period, Massimino was never criminally charged. He quietly disappeared from public view after the company’s collapse.

Patrick J. Carey, former Chief Operating Officer and later CEO after Massimino stepped down, also avoided prosecution. Carey was involved in the company’s operations during the period when job placement numbers were allegedly falsified.

William D. White, former Chief Financial Officer, signed off on SEC filings during years of misleading statements to investors and regulators, yet he too faced no criminal charges.

A handful of lawsuits and civil enforcement actions targeted the company, but not its top brass. The Obama-era Department of Education fined Corinthian $30 million for misrepresentations at its Heald campuses in California—but again, no individuals were held accountable.

The Securities and Exchange Commission (SEC) filed a civil suit in 2016 against Massimino and two other executives—Robert Owen (former CEO of Everest) and David Moore (former Vice President of Career Services)—but the penalties were civil, not criminal. The matter was quietly resolved years later, with no admission of guilt and limited financial penalties.

 
A Legal and Regulatory Failure

The failure to prosecute Corinthian’s leadership reveals the broader dysfunction of federal oversight. The Department of Education continued to funnel billions to Corinthian even after whistleblowers and state attorneys general raised serious concerns. Accreditors rubber-stamped programs with low graduation and job placement rates. Congress held hearings but passed little reform.

And when the reckoning came, it was the students—not the executives or shareholders—who paid the price.

 
A Cautionary Tale Still Unfolding

The Corinthian Colleges scandal is not simply a story of corporate greed. It is a story of systemic complicity—of a regulatory system that rewards enrollment over outcomes, that protects corporate actors while ignoring the human cost.

Today, many former Corinthian students remain in financial limbo, excluded from relief due to paperwork errors, technicalities, or bureaucratic delays. Some have moved on, but with scars—financial, emotional, and psychological—that may never fully heal.

Meanwhile, the men who engineered this billion-dollar fraud have retired or moved on to new ventures. Their profits are intact. Their reputations barely scratched.

Borrower Defense to Repayment: A Broken Lifeline

In theory, Borrower Defense to Repayment (BDR) was supposed to be the lifeline for students defrauded by predatory institutions like Corinthian Colleges. Enshrined in federal law since the 1990s and expanded during the Obama administration, BDR allows borrowers to seek federal student loan cancellation if their school misled them or violated certain state laws. In practice, however, this “safety net” has been riddled with delay, denial, and political sabotage.

During the Trump administration, then-Education Secretary Betsy DeVos all but dismantled BDR, slow-walking or denying tens of thousands of claims and rewriting the rules to make relief nearly impossible to obtain. Her Department of Education sat on a mountain of applications, many of them from Corinthian students, and forced some defrauded borrowers to repay loans they never should have owed.

Legal battles ensued. A class action suit brought by student borrowers (Sweet v. Cardona) eventually compelled the Department of Education to process tens of thousands of long-delayed claims. But the damage from years of neglect and politicization left lasting scars.

The Biden administration, to its credit, sought to restore the original intent of Borrower Defense. In 2022, it wiped out $5.8 billion in federal loans for former Corinthian students—an unprecedented act of relief. And yet, it was not complete justice.

Thousands of borrowers still have pending BDR applications. Some were denied under DeVos-era policies and must reapply. Others have struggled to access relief due to confusing eligibility requirements or missing documentation. And those with private loans—outside the reach of BDR entirely—remain stuck with illegitimate debt and few legal options.

More troubling, the system remains vulnerable to future political manipulation. Without statutory protections, BDR can be gutted again by a future administration, leaving borrowers once more at the mercy of ideology and inertia.

Corinthian’s legacy, then, lives on—not just in the ruined finances of its former students but in the unsteady scaffolding of a student loan forgiveness system still prone to failure. If Borrower Defense to Repayment is to mean anything, it must become more than a postscript to scandals like Corinthian. It must become a durable right—shielded from politics, enforced with urgency, and backed by a real commitment to justice.

The Higher Education Inquirer will continue to investigate how many were excluded, why relief was delayed, and what deeper reforms are needed—not just to help the Corinthian generation, but to prevent the next generation from falling into the same trap.

Sources:

U.S. Department of Education press releases (2015–2024)
SEC v. Massimino, Owen, Moore (2016)
California v. Corinthian Colleges, Inc. (AG Kamala Harris)
The Atlantic, “The Lie That Got Half a Million People Into Debt”
The Chronicle of Higher Education archives
Debt Collective reports and legal filings
U.S. Senate HELP Committee (Harkin Report, 2012)
Inside Higher Ed, “Corinthian Execs Walk Away”
Sweet v. Cardona case documents and related rulings
Borrower Defense regulations: 34 CFR § 685.206 and subsequent amendments

Let us know if you have a Corinthian story to share. Justice demands it be told.

As the Wealth Gap Widens, Executive Security Spending Surges

As economic inequality intensifies in the United States, corporate leaders are allocating more resources to personal security. CEOs, board members, and high-ranking executives in multiple sectors—including healthcare, tech, logistics, finance, and higher education—are investing in expanded protective measures in response to growing public anger and incidents like the 2024 assassination of UnitedHealthcare CEO Brian Thompson by Luigi Mangione.

In 2023, Meta Platforms spent $14 million on CEO Mark Zuckerberg’s personal security. Alphabet spent $5.9 million, Amazon reported $1.6 million, and JPMorgan Chase allocated $1.2 million for CEO protection, according to public filings with the Securities and Exchange Commission (SEC). These expenditures have risen steadily in recent years. The Institute for Policy Studies reports an 11 percent increase in executive security costs among the top 500 U.S. firms between 2021 and 2023.

The killing of Thompson in December 2024 catalyzed a wave of security upgrades. According to Business Insider, 40 UnitedHealthcare executives hired bodyguards, relocated, or altered travel routines. UnitedHealth later disclosed $1.7 million in new executive security costs, according to STAT News. Analysts and security firms have since labeled the trend the “Luigi effect.”

These developments are not confined to healthcare. Energy, retail, agriculture, and higher education executives are also responding to rising threats—many rooted in public dissatisfaction over price inflation, labor exploitation, and environmental degradation. In higher education, university presidents have increased security in response to student debt protests and adjunct faculty organizing. In logistics, following union drives and layoffs at UPS and Amazon, senior officials enhanced security at warehouses and corporate campuses.

These actions are occurring in a regulatory environment that has shifted in favor of corporate consolidation. The Federal Trade Commission (FTC), under financial and political pressure, has seen a reduction in staffing and enforcement capacity. According to the FTC’s FY2024 budget report, the agency operated with fewer than 1,100 full-time employees—a 20 percent decline from a decade earlier. Congressional budget cuts and increased legal challenges from corporations have further limited the FTC’s ability to investigate and block mergers, enforce antitrust laws, or monitor deceptive corporate practices.

This decline in federal oversight has emboldened monopolistic behavior across industries. It has also allowed firms to suppress labor rights, raise prices, and consolidate control—actions that contribute directly to the growing frustration among workers and consumers. With weakened regulatory agencies and stagnant wages, the perception of impunity among corporate elites has only sharpened public resentment.

The Higher Education Inquirer affirms its commitment to nonviolence. Acts like those carried out by Luigi Mangione are not acceptable responses to injustice. But his case has become a symbolic reference point, signaling how far some individuals may go when democratic tools of accountability are weakened. Escalating security budgets are not just a reaction to individual threats—they are a measurable indicator of social distrust and institutional breakdown.

The solution is not fortification, but reform. Corporate leaders have an opportunity to respond by narrowing executive compensation gaps, supporting collective bargaining, addressing climate and public health impacts, and reducing their influence over regulatory systems. The FTC’s decline is a structural signal, just like the rise in CEO security costs. Both reveal a system drifting further from democratic accountability.

The path forward must be shaped by transparency, public policy, and peaceful resistance. If not, the costs—financial, social, and moral—will continue to rise.

Sources

• U.S. Securities and Exchange Commission (SEC) Proxy Filings: Meta (2023), Amazon (2023), Alphabet (2023), JPMorgan Chase (2023)

• Business Insider. “UnitedHealthcare Execs Hired Bodyguards After CEO’s Killing.” June 2025

• STAT News. “UnitedHealth Discloses $1.7 Million in Security Costs Post-Murder.” April 2025

• Institute for Policy Studies. Executive Excess 2023

• Federal Trade Commission. “Fiscal Year 2024 Congressional Budget Justification.” https://www.ftc.gov

• Economic Policy Institute. “CEO Pay Has Grown 1,209% Since 1978.” 2023

• Pew Research Center. “Public Trust in Institutions, 2023”

• Chronicle of Higher Education. “Presidents Increase Security Amid Campus Protests.” 2024

• New York Post. “Executives Rush to Boost Security in Wake of ‘Luigi Effect’.” May 2025

The Real Downgrade: America’s Bond Rating Is Falling—But Our Quality of Life Is Falling Faster

In July 2025, the United States was dealt another blow to its financial credibility: a downgrade of its sovereign bond rating by Fitch Ratings, with warnings from Moody’s and S&P that further cuts may be imminent. The downgrade reflects ballooning federal deficits, unsustainable debt servicing costs, and chronic political dysfunction. Meanwhile, the Congressional Budget Office has lowered GDP projections for the remainder of the decade, citing long-term productivity declines, labor instability, and extreme climate disruption.

Yet behind these headline-grabbing financial developments lies a much more dangerous, and far more insidious, crisis: the downgrade of American quality of life. This is not measured in basis points or stock indices, but in rising mortality rates, falling life expectancy, crumbling infrastructure, unaffordable housing, and the widespread erosion of trust in national institutions. No credit agency can fully quantify it, but Americans are living through it every day.

Add to this grim picture the looming risk of a crypto-fueled financial collapse—an entirely preventable disaster that Congress now seems intent on accelerating.

The U.S. Congress is on the brink of passing a sweeping cryptocurrency bill that, under the banner of “fostering innovation,” may be setting the stage for the next major financial crisis. While crypto lobbyists and venture capitalists celebrate the bill as long-overdue regulatory clarity, critics argue it guts consumer protections, legalizes financial opacity, and drastically weakens federal oversight.

The bill, pushed forward by a bipartisan coalition flush with campaign donations from the crypto industry, transfers much of the regulatory authority over digital assets from the Securities and Exchange Commission (SEC) to the more industry-friendly Commodity Futures Trading Commission (CFTC). In doing so, it reclassifies most cryptocurrencies as commodities, effectively shielding them from the stricter standards that govern securities and financial disclosures.

Loopholes in the bill allow for weakened Know-Your-Customer (KYC) and Anti-Money Laundering (AML) requirements. It legalizes many decentralized finance (DeFi) platforms that operate without any institutional accountability. Oversight of stablecoins—whose volatility helped crash markets in 2022—is minimal. The bill even offers tax exemptions for certain crypto gains, encouraging high-risk speculation under the guise of "financial inclusion."

This legislation arrives not in a vacuum but after multiple crypto meltdowns that wiped out more than $2 trillion in market value between 2021 and 2022. Companies like FTX, Celsius, and Voyager Digital collapsed in spectacular fashion, leaving millions of retail investors with empty wallets while insiders escaped with fortunes. Despite this history, Congress appears ready to invite a repeat—only on a much larger, more systemically dangerous scale.

A full-blown crypto crash under this new legal framework could trigger a financial chain reaction through pension funds, university endowments, small banks, and public finance institutions already dabbling in digital assets. Lacking meaningful regulatory authority, the federal government would be left unable to respond effectively—much like in the early days of the 2008 mortgage crisis.

The real casualties of this will not be Silicon Valley billionaires or hedge fund managers. It will be working Americans, already burdened by stagnant wages, crushing student loan debt, and unaffordable housing. Desperate for financial relief or upward mobility, many are being drawn into crypto speculation. When the crash comes, they’ll be the ones holding the bag—again.

Young people, especially recent college graduates, are particularly vulnerable. Burdened with degrees that offer little job security, forced into gig work or unpaid internships, and priced out of housing and healthcare, they now face a new threat: the destruction of their meager savings and long-term stability in yet another engineered financial disaster. As the Higher Education Inquirer has reported, this educated underclass is not a fluke of the labor market—it is a design of an extractive economic system that prioritizes capital over community, and deregulation over accountability.

This crypto bill is just the latest chapter in a broader crisis of governance. America is no longer investing in the basics that make life livable—healthcare, housing, education, climate infrastructure—but it continues to write blank checks for speculative markets and corporate interests. The national obsession with GDP and innovation has created an economy that generates record profits but widespread misery. We’ve become a nation of downward mobility, hidden under the veneer of “growth.”

As public services are hollowed out, life expectancy is falling. Maternal and infant mortality are rising. Suicide and drug overdoses have become common causes of death. Public schools and universities are under attack from all sides—defunded, corporatized, and politicized. Millions go without healthcare, adequate food, or secure housing. And amid it all, Congress is preparing to deregulate one of the most volatile sectors of the global economy.

The U.S. bond rating matters—but it does not capture the full truth of our national decline. GDP growth means little when it’s accompanied by hunger, burnout, sickness, and despair. The real downgrade isn’t in our financial paper—it’s in our national soul.

If this crypto bill passes, we may look back on it as the moment when lawmakers abandoned even the pretense of protecting the public in favor of appeasing tech lobbyists and private equity donors. A financial crash is not just likely—it is all but inevitable. And when it happens, it will further degrade the quality of life for a population already stretched to the breaking point.

The Higher Education Inquirer calls on journalists, educators, student activists, and policymakers to treat this crisis with the seriousness it demands. Our future should not be mortgaged to crypto speculators and congressional opportunists.

The credit downgrade is a symptom. The GDP slump is a warning. But the real emergency is human: a population losing faith in its institutions, its economy, and its future.

And unless we change course, that’s a downgrade no rating agency can reverse.

Sources:

Fitch Ratings Downgrade Report, July 2025
Congressional Budget Office Economic Outlook, 2025–2030
Redfin Housing Market Insights, Q2 2025
CDC Life Expectancy and Mortality Data, 2024
Brookings Institution: “Crypto and Systemic Risk” (2024)
Senate Financial Services Committee Testimony, May 2025
National Bureau of Economic Research: “GDP vs. Wellbeing” (2023)

A Brief History of U.S. Financial Downturns and Collapses: Speculation, Deregulation, Environmental Stress, and the Crises to Come

Since the Treaty of Paris in 1783, the United States has experienced repeated financial collapses—economic convulsions shaped by cycles of speculation, deregulation, and systemic inequality. While official narratives often frame these crises as isolated, unexpected events, the truth is more systemic. Time and again, economic downturns have been driven by elite greed, weakened regulatory institutions, and the exploitation of both people and the planet. Today, amid climate chaos, digital finance, and eroding public trust, the United States stands on the brink of another, potentially greater, financial reckoning.

The country’s first financial panic, in 1792, was triggered by speculative schemes in government securities. Treasury Secretary Alexander Hamilton’s efforts to stabilize the new economy through the Bank of the United States led to rampant speculation on public debt. A brief crisis followed when overextended investors panicked. A few years later, the Panic of 1797 resulted from overleveraged land investments and a tightening of British credit. These early shocks revealed a fundamental pattern: deregulated markets rewarded insiders and punished everyone else.

Throughout the 19th century, financial panics became a fixture of American capitalism. The Panic of 1819, the nation’s first true depression, followed a credit boom tied to western land speculation and aggressive lending by the Second Bank of the United States. As cotton prices collapsed and farmers defaulted on loans, banks failed, and mass unemployment followed. The Panic of 1837, catalyzed by President Andrew Jackson’s dismantling of the national bank and his hard-money policies, triggered a deep depression that lasted through most of the 1840s. The financial collapse of 1857, in turn, stemmed from global trade imbalances, railroad speculation, and the failure of major financial institutions like the Ohio Life Insurance and Trust Company.

Even at this early stage, economic expansion was fueled by environmental exploitation. Railroads cut through forests and Indigenous territories. Monoculture farming destroyed topsoil. Western land, viewed as limitless, was extracted for immediate profit, with no regard for sustainability or stewardship.

The late 19th century’s Gilded Age brought a series of devastating crashes that reflected the unchecked power of monopolists and financiers. The Panic of 1873, known as the beginning of the Long Depression, began with the collapse of Jay Cooke & Company, a bank overinvested in railroads. The depression persisted for years and was marked by widespread unemployment, strikes, and a backlash against corporate excess. In 1893, another railroad bubble burst, leading to bank runs, industrial failures, and one of the worst economic downturns of the century. At every turn, environmental damage—from deforestation to mining disasters—intensified.

The 20th century began with new waves of speculation and consolidation, culminating in the infamous crash of 1929 and the Great Depression. In the 1920s, the U.S. economy boomed on the back of industrial expansion, easy credit, and a largely unregulated stock market. Wall Street profits masked deep inequality and rural poverty. When the bubble burst in October 1929, the collapse wiped out millions of investors and plunged the country into a decade-long depression. Environmental catastrophe followed in the form of the Dust Bowl, a man-made disaster brought about by overfarming and soil mismanagement across the Great Plains. Families lost both their farms and their future, creating a mass migration of the economically displaced.

In response, the Roosevelt administration implemented the New Deal, which included financial reforms like the Glass-Steagall Act, the Securities and Exchange Commission, and public investment in infrastructure. But by the late 20th century, many of these safeguards were systematically dismantled. The wave of deregulation began in earnest during the Reagan era. The Savings and Loan Crisis of the 1980s, a direct result of financial deregulation and speculative lending, cost American taxpayers more than $160 billion. At the same time, environmental protections were weakened, leading to an explosion of toxic sites and a spike in chronic health problems, especially in low-income communities.

In the 1990s and early 2000s, the rise of Silicon Valley and the dot-com bubble marked a new chapter in speculative capitalism. Investors poured money into tech startups with little revenue or product. The bubble burst in 2000, wiping out trillions in paper wealth and exposing the fragility of digital economies built on hype rather than value. This was followed by the more devastating crash of 2008, the result of subprime mortgage fraud, unregulated derivatives, and the repeal of Glass-Steagall in 1999. Wall Street firms packaged risky home loans into complex securities and sold them across the globe. When the housing market collapsed, so did the global financial system.

The 2008 crash led to the Great Recession, which resulted in millions of foreclosures, lost jobs, and deep cuts to public services. African American and Latinx communities, already targeted by predatory lenders, were especially hard hit. At the same time, sprawling housing developments—many built in environmentally fragile areas—were abandoned or devalued, further highlighting the links between financial speculation and ecological risk.

More recently, the COVID-19 pandemic triggered a sharp recession in 2020. Lockdowns and mass illness disrupted labor markets, supply chains, and public institutions. The federal government responded with massive fiscal and monetary stimulus, which lifted financial markets even as millions lost jobs or left the workforce. Low interest rates and stimulus checks fueled speculative booms in housing, stocks, and digital assets like cryptocurrency.

Cryptocurrency, originally touted as a decentralized alternative to Wall Street, became a magnet for speculative excess. Bitcoin and Ethereum surged to record highs, only to crash repeatedly. The collapse of major crypto exchanges like FTX in 2022 revealed rampant fraud, regulatory gaps, and a new frontier of financial exploitation. In addition to its financial instability, cryptocurrency mining has significant environmental costs, consuming more electricity than many small nations and accelerating carbon emissions in areas powered by fossil fuels.

The current moment is defined by overlapping crises: speculative bubbles in tech and crypto, a fragile labor market, worsening inequality, and a rapidly destabilizing climate. Insurance companies are retreating from high-risk areas due to wildfires, floods, and hurricanes. Crop failures and water shortages threaten food security. Global supply chains are vulnerable to both pandemics and extreme weather. At the same time, deregulatory fervor continues, with efforts to weaken environmental laws, consumer protections, and financial oversight.

If history is any guide, these trends point toward the likelihood of a greater collapse—one not confined to Wall Street but cascading through housing, education, healthcare, and global systems. Future downturns may not be triggered by a single event like a stock crash or pandemic but by an interconnected series of shocks: climate disaster, resource wars, digital speculation, and institutional failure.

Higher education will not be spared. Universities increasingly rely on endowments tied to volatile markets, student debt, and partnerships with speculative industries. The growth of for-profit colleges, online "robocolleges," and gig-economy credentialism has created a hollow system that produces degrees but not economic security. Many young Americans—especially those from working-class and marginalized communities—now face a lifetime of debt and precarious employment. They are the product of a financialized education system that promised upward mobility and delivered downward pressure.

In the end, financial collapses in the U.S. have never been merely economic—they have been moral and political failures as well. They reflect a system that too often prioritizes speculation over stability, deregulation over justice, and private gain over public good. Some of the wealthiest figures in this system—like Peter Thiel and other techno-libertarian futurists—actively invest in escape plans: buying bunkers in New Zealand, funding longevity startups, or betting on crypto anarchy, all while anticipating societal collapse. But most Americans don’t have the luxury of opting out. What we need instead is a commitment to rebuilding systems grounded in equity, sustainability, and democratic accountability. While the risks ahead are real, so are the opportunities—especially if the people most affected by past collapses organize, speak out, and help shape a more resilient and just future.

For more critical perspectives on inequality, education, and economic justice, follow the Higher Education Inquirer.

What do the University of Phoenix and Risepoint have in common? The answer is a compelling story of greed and politics.

In the increasingly commodified world of higher education, the University of Phoenix and Risepoint (formerly Academic Partnerships) represent parallel tales of how private equity, political influence, and deceptive practices have shaped the online college landscape. While their paths have diverged in branding and institutional affiliation, the underlying motives and outcomes share disturbing similarities.

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The University of Phoenix: A Legacy of Legal and Ethical Trouble

The University of Phoenix (UOP) has been a central player in the for-profit college boom, particularly during and after the 2000s. Under the ownership of Apollo Education Group, and later the Vistria Group, UOP has faced a relentless stream of lawsuits, regulatory scrutiny, and public outrage.

In 2019, the Federal Trade Commission (FTC) reached a $191 million settlement with UOP over allegations of deceptive advertising. UOP falsely claimed partnerships with major corporations like Microsoft, AT&T, and Twitter to entice students. The result was $50 million in restitution and $141 million in student debt relief.

But the legal troubles didn’t stop there. In 2022 and 2023, the U.S. Department of Education included UOP in a broader class action that granted $37 million in borrower defense discharges. These claims stemmed from deceptive marketing and predatory recruitment practices.

Meanwhile, in 2024, the California Attorney General settled with UOP for $4.5 million over allegations of illegally targeting military service members between 2012 and 2015. The university’s controversial relationship with the military community also led to a temporary VA suspension of GI Bill enrollments in 2020.

The legal history includes False Claims Act suits brought by whistleblowers, including former employees alleging falsified records, incentive-based recruiter pay, and exaggerated graduation and job placement statistics. In 2019, Apollo Education settled a securities fraud lawsuit for $7.4 million.

More recently, UOP has been embroiled in political controversy in Idaho. In 2023 and 2024, the Idaho Attorney General challenged the state's attempt to acquire UOP, citing Open Meetings Act violations and lack of transparency. Though a federal judge initially dismissed the suit, Idaho’s Supreme Court allowed an appeal to proceed.

Through all of this, Vistria Group—UOP’s private equity owner since 2017—has reaped massive profits. Vistria was co-founded by Marty Nesbitt, a close confidant of Barack Obama, underscoring the bipartisan political protection that shields for-profit education from lasting accountability.

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Risepoint and the Online Program Management Model

Risepoint, formerly Academic Partnerships (AP), tells a similarly troubling story, albeit from the Online Program Manager (OPM) side of the education-industrial complex. Founded in 2007 by Randy Best, a well-connected Republican donor with ties to Jeb Bush, AP helped universities build online degree programs in exchange for a significant cut of tuition—sometimes up to 50%.

This tuition-share model, though legal, has raised ethical red flags. Critics argue it diverts millions in public education dollars into private hands, inflates student debt, and incentivizes aggressive, misleading recruitment. The most infamous case was the University of Texas-Arlington, which paid AP more than $178 million over five years. President Vistasp Karbhari resigned in 2020 after it was revealed he had taken international trips funded by AP.

Risepoint was acquired by Vistria Group in 2019, placing it in the same portfolio as the University of Phoenix and other education businesses. The firm’s growing influence in higher education—fueled by Democratic-aligned private equity—reflects a deeper entanglement of politics, policy, and profiteering.

In 2024, Minnesota became the first state to ban new tuition-share agreements with OPMs like Risepoint. This legislative action followed backlash from a controversial deal between Risepoint and St. Cloud State University, where critics accused the firm of extracting excessive revenue while offering questionable value.

Further pressure came from the federal level. In 2024, Senators Elizabeth Warren, Sherrod Brown, and Tina Smith issued letters to major OPMs demanding transparency about recruitment tactics and tuition-share models. The Department of Education followed in January 2025 with new guidance restricting misleading marketing by OPMs, including impersonation of university staff.

Despite this, Risepoint continued expanding. In late 2023, the company purchased Wiley’s online program business for $150 million, signaling consolidation in a turbulent industry. Yet a 2024 report showed 147 OPM-university contracts had been terminated in 2023, and new contracts fell by over 50%.

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What Ties Them Together: Vistria Group

Vistria Group sits at the center of both sagas. The Chicago-based private equity firm has made education—especially online and for-profit education—a core pillar of its investment strategy. With connections to both Democratic and Republican power brokers, Vistria has deftly navigated the regulatory landscape while profiting from public education dollars.

Its ownership of the University of Phoenix and Risepoint demonstrates a clear strategy: acquire distressed or controversial education companies, clean up their public image, and extract revenue while avoiding deep reforms. Through Vistria, private equity gains access to billions in federal student aid with minimal oversight and a bipartisan shield.

The result is a higher education ecosystem where political influence, corporate profit, and public exploitation collide. And whether through online degrees from the University of Phoenix or public-private partnerships with Risepoint, students are often the ones left bearing the cost.

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As scrutiny intensifies and state and federal lawmakers demand reform, the futures of Risepoint and the University of Phoenix remain uncertain. But one thing is clear: their shared story reveals how higher education has become a battleground of greed, power, and politics.

How the New Cryptocurrency Bill Could Accelerate a US Financial Collapse

The United States Congress is on the brink of passing a sweeping cryptocurrency bill that, under the guise of fostering innovation, may be paving the way for the next financial crisis. While crypto lobbyists and venture capitalists tout the legislation as a long-overdue framework for digital assets, critics warn that the bill’s deregulatory nature undermines consumer protections, enables fraud, and weakens the federal government’s ability to prevent a systemic collapse.

The proposed legislation—championed by a bipartisan coalition of lawmakers with significant donations from the crypto industry—shifts regulatory authority from the Securities and Exchange Commission (SEC) to the more industry-friendly Commodity Futures Trading Commission (CFTC). This move effectively reclassifies most cryptocurrencies as commodities rather than securities, shielding them from stringent disclosure and investor protection requirements.

The Bill’s Key Provisions: A Gift to Speculators

Among the most controversial elements of the bill:

• Loosening of Know-Your-Customer (KYC) and Anti-Money Laundering (AML) safeguards for certain crypto entities;

• Legalization of certain decentralized finance (DeFi) platforms, many of which operate without clear accountability;

• Minimal oversight of stablecoins, despite their systemic risks as shown in the 2022 TerraUSD collapse;

• Tax exemptions for certain crypto gains, incentivizing speculative investment.

Supporters argue these measures will solidify America’s dominance in financial innovation. But the bill’s leniency raises echoes of past financial debacles—from the dot-com bubble to the 2008 subprime mortgage crisis—where unregulated markets spiraled out of control.

A House Built on Sand

Cryptocurrency markets have already proven themselves to be volatile, largely unbacked, and susceptible to manipulation. The 2022 crash wiped out over $2 trillion in market value and exposed the fragility of companies like FTX, Celsius, and Voyager Digital—each of which left everyday investors devastated while insiders cashed out early.

Now, by codifying a legal gray zone as a financial free-for-all, the US government may be inviting a larger catastrophe. With trillions of dollars potentially flowing into underregulated crypto assets, a major crash could trigger a chain reaction through the broader financial system, especially as more institutional players and retirement funds are drawn into the space under the new law.

An Economy at Risk

The consequences of a crypto-induced financial collapse could be profound:

• Working families—already crushed by student debt, housing inflation, and stagnant wages—may be lured into speculative investments out of desperation, only to lose their savings in the next collapse.

• University endowments and public pension systems—some of which have already dabbled in crypto—could suffer catastrophic losses, compounding the higher education affordability crisis.

• State and federal regulators, stripped of the tools needed to intervene effectively, will be unable to respond to crises in real-time, much as they were in the early days of the 2008 crash.

Moreover, this deregulatory trend sets a dangerous precedent: one in which the government abdicates its responsibility to protect the public in favor of appeasing Silicon Valley and Wall Street interests.

The Educated Underclass Will Pay the Price

As financial elites speculate with impunity, the economic fallout will disproportionately affect young people, especially recent college graduates burdened with debt and lacking stable employment. Many of these individuals are already being pushed into gig work, underemployment, or unpaid labor under the guise of "internship experience." A crypto-fueled crash could devastate whatever remaining economic foothold they have.

As the Higher Education Inquirer has chronicled, the rise of the educated underclass is not merely a generational shift—it is a structural consequence of policies that prioritize capital over community, markets over morals, and deregulation over democratic control. This bill is just the latest example.

A Crisis of Governance

Far from being a step forward, the new cryptocurrency bill reflects a larger crisis in American governance. It prioritizes short-term gains and corporate lobbying over long-term stability and social equity. By turning over the keys of financial regulation to the very industries that have proven incapable of self-regulation, the US may be steering itself into another devastating collapse.

The Higher Education Inquirer urges lawmakers, journalists, educators, and citizens to scrutinize this legislation with the urgency it deserves. A failure to act could turn today’s crypto dreams into tomorrow’s financial nightmare—one that once again leaves the working class holding the bag.

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For further investigative reporting on the intersection of finance, higher education, and social equity, follow the Higher Education Inquirer.

HEI Continuing Investigations Include SEC FOIA Requests

The Higher Education Inquirer has recently sent Freedom of Information (FOIA) requests to the US Securities and Exchange Commission (SEC) regarding two edtech companies, 2U and Ambow Education.  In both cases, we have requested the number of SEC complaints lodged against these corporations.  

2U has dealt with a number of shareholder lawsuits, starting in 2019. In 2024, the online program manager for elite universities went through Chapter 11 bankruptcy and was delisted by the NASDAQ.  The FOIA is 25-01645. We are requesting a count of the number of complaints made against 2U since 2016.

Ambow Education has also had financial problems over the years and we have documented some of these problems since 2022.  One of its two US schools, Bay State College, was closed in 2023.  The FOIA is 25-01633. We are requesting a count of the number of complaints made against Ambow since 2010.

Ambow Education Continues to Fish in Murky Waters

In May 2022, The Higher Education Inquirer began investigating Ambow Education after we received credible tips about the company as a bad actor in US higher education, particularly with its failure to adequately maintain and operate Bay State College in Boston. The Massachusetts Attorney General had already stepped in and fined the school in 2020 for misleading students. 

As HEI dug deeper, we found that Ambow failed years before under questionable circumstances. And we worked with a number of news outlets and staffers in the offices of Senator Elizabeth Warren and Representative Ayanna Pressley to get justice for the students at Bay State College. 

Murky Waters

Since that 2022 story we continued to investigate Ambow Education, its CEO/CFO/Board Chair Jin Huang, and Ambow's opaque business practices. Not only were we concerned about the company's finances, we were wary of any undue influence the People's Republic of China (PRC) had on Ambow, which the company had previously acknowledged in SEC documents. 

A Chinese proverb says it's easier to fish in murky waters. And that's what it seemed like for us to investigate Ambow, a company that used the murky waters in American business as well as anyone. But not everything can remain hidden to US authorities, even if the company was based out of the Cayman Islands, with a corporate headquarters in Beijing. 

In November 2022, Ambow sold all of its assets in the People's Republic of China, and in August 2023 Bay State College closed abruptly. We reported some strange behaviors in the markets to the Securities and Exchange Commission, but they had nothing to tell us. Ambow moved its headquarters to a small rental space in Cupertino, where it still operates. 

HybriU

In 2024, Ambow began spinning its yarns about a new learning platform, HybriU, using Norm Algood of Synergis Education as its huckster. HybriU appeared at the Consumer Electronics Show in Las Vegas and at the ASU-GSV conference in San Diego and used their presence as signs of legitimacy. It later reported a $1.3 million contract with a small company out of Singapore. Doing a reverse image search, we found that some of the images on the HybriU website were stock photos.

There is no indication that HybriU's OOOK technology, first promoted in the PRC in 2021, is groundbreaking, although glowing press releases counter that. HybriU says that its technology is being used in classrooms, but no clients (schools or businesses)  have been mentioned.  If Ambow Education can prove the HybriU technology is promising and valuable to consumers, we will publicy acknowledge it.  

Continued PRC Interests 

Besides having an auditor from the People's Republic of China, Ambow has apparently shown an interest in working with Chinese interests in Morocco and Tunisia.

Ambow Education's Financial Health

In 2025, Ambow Education remains alive but with fewer assets and only the promise of doing something of value with those assets. Its remaining US college, the NewSchool of Architecture and Design in San Diego has seen its enrollment dip to 280 students. And there are at least three cases in San Diego Superior Court pending (for failure to pay rent and failing to pay the school's former President).  The US Department of Education has the school under Heightened Cash Monitoring (HCM2) for administrative issues. Despite these problems, NewSchool has been given a cleaner bill of health by its regional accreditor, WSCUC, changing the school's Warning status to a Notice of Concern.

A report by Argus Research, which Ambow commissioned, also described Ambow in a generally positive light, despite the fact that Ambow was only spending $100,000 per quarter on Research and Development. That report notes that Prouden, a small accounting firm based in the People's Republic of China is just seeing Ambow Education's books for the first time. In April 2025 we wonder if we'll get adequate information when Ambow reports its 2024 annual earnings, or whether we find just another layer of sludge. 

Feds Cancel Debts for 261,000 Students of Disgraced School Now Run by U. of Arizona (David Halperin)

The Biden Department of Education announced today it has approved $4.5 billion in loan debt cancellation for 261,000 borrowers who attended for-profit Ashford University between March 2009 and April 2020. It also announced it would seek to ban Andrew Clark, the CEO of Ashford’s demised parent company, Zovio, from contracting with the federal government.

The announcement brings some measure of relief and justice to a huge number of former students of Ashford, which evolved from a single campus in Iowa that Zovio acquired in 2005 to a massive, high-priced, poor-quality, mostly-online school that got billions from taxpayers while leaving many worse off than when they enrolled. Ashford and Zovio were held liable and penalized $20 million for scamming students by a California court following a 2022 trial brought by that state’s attorney general. The verdict was upheld on appeal.

The former students were enrolled at Ashford by aggressive recruiters who told a lot of falsehoods but could say, truthfully, that the school was approved for federal student grants and loans by the Department of Education. The Department let these students down by keeping its good housekeeping seal on the school and thus keeping predatory Ashford eligible for taxpayer money. The Biden administration deserves credit for at last righting some of this wrong.

The California trial echoed numerous past reports of abuses by Zovio and Ashford. In fact, at a hearing focused on Ashford way back in 2011, then-Senator Tom Harkin (D-IA) declared Ashford “an absolute scam.” The California court found that Zovio and Ashford “created a high pressure culture in admissions that prioritized enrollment numbers over compliance.” The case included detailed testimony from Ashford employees about a deceptive operation engineered by senior Zovio executives — and about numerous lives ruined by a school that never earned the certifications that would allow graduates to even be eligible for the teaching, social work, and other jobs they sought.

Unfortunately for today’s students, Ashford continues to operate. It just changed its name to University of Arizona Global Campus (UAGC). In August 2020, Zovio sold Ashford to the University of Arizona, in a shady deal that allowed Zovio to hide the school under the apron of the powerful state university and shed the stigma that for-profit schools like Ashford had brought upon themselves — and yet still permit Zovio to make big money with a long term contract to run Ashford’s operations. After the California verdict, the University of Arizona forced Zovio out of the arrangement, but it hired most of Zovio’s employees and carried on with Zovio’s playbook. Mounting evidence of financial losses and continued predatory practices at the school likely played a role in the resignation of the school’s president last year.

The Department said that the California AG office had requested today’s loan discharges for Ashford students, based on evidence developed in its lawsuit “around widespread misrepresentations in nine separate areas, including students’ ability to obtain needed licensure, transfer credits, the cost and amount of financial aid, and the time it would take to earn a degree.” The Department said it conducted its own review of the evidence before acting.

Ashford has been sued or investigated by other federal and state agencies, including the U.S. Justice Department, Securities and Exchange Commission, and Consumer Financial Protection Bureau, and the attorneys general of Iowa, Massachusetts, New York, and North Carolina. A 2015 settlement with the CFPB forced Ashford to discharge $23.5 million in high-interest private loans and pay an $8 million civil penalty.

“Numerous federal and state investigations have documented the deceptive recruiting tactics frequently used by Ashford University,” U.S. Under Secretary of Education James Kvaal said in a statement today. “In reality, 90 percent of Ashford students never graduated, and the few who did were often left with large debts and low incomes. Today’s announcement will finally provide relief to many students who were harmed by Ashford’s illegal actions.”

In 2023 the Department announced $72 million in debt cancellation for more than 2,300 Ashford borrowers who who applied for relief. But with today’s action, a much larger group of former Ashford students will get automatic relief, without having to apply and prove their cases. The Department says it will email former Ashford students informing them of the discharge.

When it announced that first $72 million in relief in 2023, the Department said it planned to come after the University of Arizona to recoup the losses, which federal permits. Today’s announcement creates an even greater risk of liability for the state school. U of A has denied it would be responsible, but its purchase agreement with Zovio suggests otherwise.

Separately, the Department issued a Notice of Proposed Government-Wide Debarment from Federal Procurement and Non-Procurement Transactions to Clark, the founder and former CEO of Zovio — aiming at a decision that would, among other things, prevent Clark from working as a principal or executive of any college getting federal aid.

In a statement today, the Department said it was acting against Clark “because Ashford violated federal regulations regarding making substantial misrepresentations. The evidence from the California litigation, and other sources, which the Department independently reviewed, is mountainous. The conduct of Ashford can be imputed to Mr. Clark because he participated in, knew, or had reason to know of Ashford’s misrepresentations. Mr. Clark not only supervised the unlawful conduct, he personally participated in it, driving some of the worst aspects of the boiler-room-style recruiting culture.”

The Department said it would refer the proposed debarment to its Office of Hearings and Appeals, with a recommendation that Clark be banned for “not less than three years .” (Three years?) Clark would have an opportunity to oppose the move.

I’m not sure Clark will bother, if indeed the debarment effort goes forward under the administration of former Trump University head Donald J. Trump. Clark’s last reported job on his LinkedIn page is as CEO of Zovio, which went out of business in 2022. Clark made tens or even hundreds of millions running Zovio, with annual compensation topping $20 million in at least one year.

Clark abruptly left the company in 2021. Others responsible for awful Zovio, which changed its name from Bridgepoint Education in 2019, include Ryan Craig, a private equity man who served on the board from 2003 to 2022, and Robert Eitel, who worked at the company from 2015 to 2017 and later was one of Betsy DeVos’s top aides in the first Trump Department of Education.

On Monday, the Department of Education granted similar automatic debt relief to 73,600 borrowers who attended schools of the disgraced chain Center for Excellence Higher Education. That operation’s CEO, Eric Juhlin, was similarly debarred by the Department in 2021.

Unfortunately for today’s students, who will now be at the mercy of the incoming Trump administration, in addition to Ashford-n0w-UAGC, there are still many awful, large for-profit chains still running, including Perdoceo and the University of Phoenix.

There’s one other thing the Biden administration could do to halt Ashford’s abuses before it turns over the keys to the Trump administration, which last time did almost everything possible to help predatory schools abuse students: It could act on the long-pending application by Arizona to approve the change of ownership of Ashford. It should reject the application. And the University of Arizona should shut down this scam school once and for all.

When I first got involved in the issue of for-profit colleges, back in 2010, I received a phone call from a man who said he was on a golf course in the San Diego area, where Zovio, then called Bridgepoint, was located. He said that a bunch of Bridgepoint executives were playing golf while loudly mocking Ashford students. He held up the phone so I could hear the laughter.

[Editor's note: This article originally appeared on Republic Report.]

When Banks Lost Control of the Student Loan Mess

History can be many things. It can be both informative and purposely deceptive. And from time to time, historical events need to be revisited if we seek the truth. We also find critical historical analysis essential when we think about US higher education and student loan debt from a People's perspective.

In a previous article we said Best and Best's classic The Student Loan Mess needed to be updated and reexamined. Although the book was an exceptional chronicle of the student loan industry from 1958 to 2013, it missed at least one key event, the 2008-2010 bailout of Sallie Mae and a number of banks who made questionable private loans guaranteed by the US government. This lesson is especially important if the US government decides to get out of the student loan business or reduce government oversight of student loans.

From 1965 to 2010, the federal government was a backstop for private student loans, Guaranteed Student Loans, also known as the FFEL loans. Annual volume of private loans skyrocketed, from $5B in 2001 to over $20B in 2008, when 14 percent of all undergraduates had one. A secondary market for private student loan debt (student loan asset-backed securities) also began to flourish. An industry group, America's Student Loan Providers (ASLP), provided political cover for private lenders.

In 2007, President George W. Bush signed the College Cost Reduction and Access Act of 2007 (HR 2669) which cut subsidies to lenders and increasing grants to students. But this did little to contain the growing mountain of student loan debt. A mountain of unrecoverable debt that was crushing millions of consumers as the US was facing an enormous economic crisis, the Great Recession.

In rereading The Student Loan Mess, we also discovered that these private entities had not only made questionable loans, some private lenders had also bribed university officials to become preferred lenders. How commonplace this student loan grift was has not been adequately explored.

In 2008, the Bush government began a bailout of these private lenders, the Ensuring Continued Access to Student Loans Act (ECASLA), which amounted to $110B. This event occurred largely without notice. And because a larger Great Recession was happening, the ECASLA never received much media attention.

As part of Health Care and Education Reconciliation Act of 2010, President Obama's takeover of the Guaranteed Student Loan program in 2010, did get attention. Ending the Guaranteed Student Loan program was supposed to save the US government $66B over an 11-year period. This rosy projection never materialized. The FFEL loans acquired by the U.S. Department of Education (ED) during the transition to the Direct Loan program are now part of the Direct Loan portfolio. The U.S. Department of Education (ED) acquired an additional $20.4 billion in face amount of FFEL loans from lenders during the transition from the FFEL program to the Direct Loan program.

The FFEL loans that were not acquired by the U.S. Department of Education (ED) during the transition to the Direct Loan program remained with the original private lenders. These loans continue to be serviced by the private lenders that issued them.

For-profit colleges, the engine for much of this bad debt, did get scrutiny, and from 2010 to 2023, their presence was reduced. But overpriced education and edugrift continued in many forms. And after a short respite from 2020 to 2024, the mountain of bad student loan debt continues to grow.

Related links:

A Report on the Loan Purchase Programs Created by ECASLA

Student Loan Debt Clock

America's Student Loan Providers | C-SPAN.org

Student Loan History (New America)

FTC and California AG Have Been Investigating Online College Provider 2U (David Halperin)

Struggling online program management operation 2U has this year been under investigation by both the Federal Trade Commission and California’s attorney general, filings in federal bankruptcy court reveal.

Maryland-based 2U, which has faced scrutiny and lawsuits over alleged deceptive practices and has struggled with heavy debt, filed for Chapter 11 bankruptcy in federal court in Manhattan in July. The company emerged from bankruptcy on September 13, after a federal court approved its restructuring plan, but not before at least two filings in the case indicated that the FTC and the California AG are probing the company.

The very last page of a 128-page filing that 2U’s lawyers submitted in the bankruptcy case on September 4 notes that the FTC and California’s AG requested language in the court’s proposed order “that explicitly preserves governmental claims.”  Since there are apparently no contractual or business ties between 2U and the FTC or the California AG, the governmental claims almost certainly relate to a law enforcement request or investigation that could potentially result in penalties or judgments against the company. The notation indicates that 2U reached agreement with the federal and state law enforcement agencies that their claims would not be voided by the proposed bankruptcy restructuring.

Similarly, a September 23 filing includes an extensive list of 2U’s creditors — entities that may be owed money by the company. One entity on that list is “UNITED STATES FEDERAL TRADE COMMISSION” and the contact listed is the email address for Kimberly Nelson, an attorney in the FTC’s enforcement division, the branch, within the FTC’s Bureau of Consumer Protection, that investigates and brings actions against companies for deceptive and unfair business practices. (The California attorney general’s office does not appear on that particular list of creditors.)

An FTC spokesperson declined to comment. A spokesperson for the California Department of Justice emailed a statement saying, “To protect its integrity, we’re unable to comment on, even to confirm or deny, a potential or ongoing investigation.”

2U did not respond to a request for comment. 

David Vladeck, a former director of the FTC’s Bureau of Consumer Protection, told me today that he “can’t imagine any other reason” that the FTC and the California AG would appear in these bankruptcy documents other than that those agencies were “looking at” 2U. “The FTC often gets involved when a company under investigation is in bankruptcy,” Vladeck said. “I think it is absolutely fair to say that the FTC and the California AG are investigating this company.” 

Vladeck also said that, at least when he was at the FTC (from 2009 to 2012), a vote of the FTC commissioners would have been required to authorize commission lawyers to submit a filing in a bankruptcy case that would disclose a potential investigation of a company. 

Until its reorganization became effective on September 23, 2U was a publicly-traded company, and therefore was required to report significant events, such as the existence of a federal or state law enforcement investigation, in public filings to the Securities and Exchange Commission. I can’t, however, find any reference to an FTC or California AG investigation in 2U’s SEC filings this year. Company practices regarding an SEC disclosure threshold vary, and I don’t know if the FTC and California AG communications with 2U were of sufficient magnitude that they should have triggered such a reporting obligation for 2U. 

2U has long been a leader in the OPM space, partnering with colleges and universities to offer programs online. As of earlier this year, more than 67,000 students were enrolled in 2U programs, including more than 43,000 pursuing degrees at programs branded by public and private colleges. But advocates and students charge that 2U has offered low-quality programs using deceptive marketing and recruiting, often misleading students into thinking they are interacting with personnel of a well-known school rather than 2U employees.

In February, 2U had warned in Securities and Exchange Commission filings that it may not be able to stay in business. Yet in March, the company approved nearly $5 million in bonuses for a handful of top executives, including $2.3 million for CEO Paul Lalljie.

[Editor's note: This article originally appeared on Republic Report.] 

Why the Higher Education Inquirer Continues to Gain Popularity

The Higher Education Inquirer (HEI) continues to grow, with no revenues, no advertising, and no SEO help. And for good reason. HEI fills a niche for student/consumers and workers and their allies. It provides valuable information about how the US higher education system works and what folks can do to navigate that system. 

We cover layoffs and union organizing and strikes in higher education, and we expose predators with some degree of risk-risk that other outlets often won't take. We take a stand on holding big business accountable and we side with struggling student debtors and their families. We question and interrogate higher ducation technology and credentials.  And we dispel myths, disinformation, and hype. 

We research documents of all sorts, including information from the US Department of Education, Securities and Exchange Commission, Department of Veterans Affairs, Department of Defense, Department of Labor, and Federal Election Commission. 

The Higher Education Inquirer provides trustworthy information and expert opinions and analysis. Our list of authors is diverse and impressive, for many reasons. HEI treats our readers with respect. It gives students and workers a voice, accepting information and evidence from whistleblowers. And it allows for comments (including anonymous comments), comments that we value. 

When others do accept our research, we appreciate it. HEI has been a background source for the NY Times, Bloomberg, Chronicle of Higher Education, ProPublica, Forbes, Military Times, the American Prospect, and several other outlets. We strive to be ahead of the learned herd.