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.

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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

College Mania: The Spell is (Almost) Broken, But Hyper-Credentialism Remains

For decades, America was gripped by college mania, a culturally and structurally manufactured frenzy that elevated higher education to near-mythical importance. Students, families, and society were swept up in the belief that a college degree guaranteed status, financial security, and social validation. This was no mere aspiration; it was a fevered obsession, fueled by marketing, rankings, policy incentives, and social pressure. Today, the spell is breaking, but the demand for credentials persists.

Historically, the term “college mania” dates to the 19th century, when historian Frederick Rudolph used it to describe the fervent founding of colleges in the United States, driven by religious zeal and civic ambition. Over time, the mania evolved. Postwar expansion of higher education through the GI Bill normalized college attendance as a societal expectation. Rankings, elite admissions, and media coverage transformed selective schools into symbols of prestige. By the early 2000s, for-profit colleges exploited the frenzy, aggressively marketing to students while federal and state policy incentivized enrollment growth over meaningful outcomes.

The early 2010s revealed the fragility of this system in what I have described as the College Meltdown: structural dysfunction, declining returns on investment, predatory practices, and neoliberal policy failures exposed the weaknesses behind the hype. At its height, college mania spun students and families into a cycle of aspiration, anxiety, and debt.

Now, even students at the most elite institutions are disengaging. Many do not attend classes, treating lectures as optional, prioritizing networking, internships, or social signaling over actual learning. This demonstrates that the spell of college mania is unraveling: prestige alone no longer guarantees engagement or meaningful educational outcomes. Families are questioning the value of expensive degrees, underemployment is rising, and alternative pathways, including vocational training, apprenticeships, and nontraditional credentials, are gaining recognition.

Yet the paradox remains: for many jobs, credentials are still required. Nursing, engineering, teaching, accounting, and countless professional roles cannot be accessed without degrees. The waning mania does not erase the need for qualifications; it simply exposes how much of the cultural obsession — the anxiety, overpaying, and overworking — was socially manufactured rather than inherently necessary for employment. Students are now forced to navigate this tension: pursuing credentials while seeking value, purpose, and meaningful learning beyond the symbol of the degree itself.

The breaking of the spell is not unique to higher education. History demonstrates that manias — economic, social, or cultural — rise and fall. College mania, once fueled by collective belief and systemic reinforcement, is now unraveling under the weight of its contradictions. Institutions must adapt by emphasizing authentic education rather than prestige, while policymakers can prioritize affordability, accountability, and outcomes. Students, in turn, may pursue paths aligned with practical skills, personal growth, and career readiness rather than chasing symbolic credentials alone.

The era of college mania may be ending, but with the spell broken comes an opportunity. Higher education can be reimagined as a system that serves public good, intellectual development, and genuine opportunity, balancing the need for credentials with the pursuit of meaningful education.

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Sources:

Frederick Rudolph, The American College and University: A History (1962).
Frank Bruni, Where You Go Is Not Who You’ll Be: An Antidote to the College Admissions Mania (2015).
Dahn Shaulis, Higher Education Inquirer, “College Meltdown and the Manufactured Frenzy” (2011–2025).
Stanford Law Review, Private Universities in the Public Interest (2025).
Higher Education Handbook of Theory & Research, Volume 29 (2024).
Recent reporting on student engagement, class attendance, and labor-market requirements for degrees, 2023–2025.

COLLEGE MANIA! America’s Legal High for Families

In America, the pursuit of a college degree has become more than just a step toward a stable future—it’s a culturally sanctioned high, a ritual of aspiration, and a national obsession. “College mania,” as we call it, doesn’t just grip students. It draws in entire families, especially parents who never had the opportunity to attend college themselves. For them, college is a dream they couldn’t fulfill—so they pass it on to their children like a sacred torch.

In today’s America, college mania ranks alongside the thrill of legal marijuana, the rush of sports betting, or the intense puzzle-solving of escape rooms. But while those highs are seen as distractions or vices, the college high is viewed as noble. It’s the American Dream repackaged for the 21st century, and it’s addictive.

The Parents’ Fix

Many parents, especially from working-class or immigrant backgrounds, have internalized the belief that college is the only legitimate path to a better life. Even if they never attended themselves—or perhaps because they didn’t—they want their children to have “more.” More options. More money. More dignity. More safety.

For them, college is the ultimate symbol of success. It’s a way out of generational struggle, an antidote to low-wage work and economic precarity. These parents attend college fairs they don’t understand, cry during campus tours, and invest their savings—and sometimes retirement funds—into test prep, tutoring, and private admissions consultants.

And why wouldn’t they? The entire system—from high school counselors to state and federal policymakers—tells them that college is not just a good idea, but a moral imperative. Not sending your child to college becomes a form of parental failure.

From Hope to Hysteria

College mania often starts early. Children are told in elementary school that their GPA will “matter someday.” By middle school, they’re crafting résumés. High school becomes a war zone of advanced placement courses, volunteer hours, and résumé-building internships. College becomes the grand finale—and parents are cast as both financiers and emotional support staff for the show.

The process has become so intense that some parents—often those who didn’t go to college themselves—feel powerless, swept up in a world of rankings, deadlines, jargon, and predatory loan offers. Many turn to social media for answers, which only fuels the pressure with glossy images of Ivy League acceptance letters and first-day dorm selfies.

The high hits when the letter of acceptance comes. The name-brand college. The merit scholarship. The status symbol. But what comes next isn’t always a soft landing.

The Come-Down

Just like legal highs, the rush of college mania fades fast. Students often find themselves isolated, overwhelmed, or stuck in majors that don’t translate into real employment. Debt piles up. Mental health declines. Parents—who only wanted the best—find themselves watching their children struggle with uncertain futures despite the promise they were sold.

And in the background, an entire industry profits: textbook publishers, loan servicers, admissions consultants, and real estate developers building luxury student housing. Parents and students carry the emotional and financial burden. Institutions rarely do.

The Illusion of Escape

College is marketed as an escape room for the working class—a solvable puzzle with a promised reward at the end. But unlike escape rooms, there are no clues, no guaranteed exit, and often no prize. The thrill comes from trying. The letdown comes from realizing that the door might not open at all.

And yet, families return to the game, generation after generation. College remains the one culturally approved addiction—an expensive, emotionally loaded, legally protected gamble on the future.

College Mania: The American Fixation

College mania isn’t just about education—it’s about class mobility, identity, parental love, and social status. It’s a dopamine rush wrapped in moral virtue, sanctioned by school boards and senators alike. For parents who never went to college, the dream lives on not in themselves, but in their kids. The dream is still alive—but the system surrounding it is broken, bloated, and often brutal.

Until we can rethink what education means—and who it's really for—college mania will continue to dominate American family life. And like all highs, it will leave too many people coming down hard.

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The Higher Education Inquirer documents the myths, markets, and mechanisms of higher education in the United States.

On the 8th Anniversary of the College Meltdown

We started this blog eight years ago, in 2016, to highlight rampant greed and corruption in US higher education, and to raise awareness of this system to students-consumers-workers and their families.  Before that, we spent years in the ruthless higher ed business: seeing folks like ourselves struggling with underemployment, and juggling jobs, family obligations, and student loan debt.  

 

On December 12, 2016, the College Meltdown blog (now known as the Higher Education Inquirer) was born. Our first article was "When college choice is a fraud." That article presented the argument that higher education for the working class was often a choice between predatory for-profit colleges and community colleges that were indifferent to their students. 

While some things have changed on the higher education terrain, like the closing of some predatory for-profit schools, there is still a large degree of truth to the original premise. And much of the public has caught on: working class folks increasingly see college choice as a fraud. To worsen matters, college is increasingly considered a fraud by the middle-class, who see themselves and others underemployed and laden with debt. While a college mania for elite schools still exists, skepticism has turned to cynicism, with higher education in general.   

Bright Spots

One positive change has been for the growth of College Promise programs. These programs, available in many states, have made community college more affordable by providing tuition free or at a low cost. College Promise programs have shored up community college enrollment.  Community college enrollment began declining in 2010, but has shown some resilience as it also enrolls high school students for dual-enrollment.  

More Cynicism Ahead

The rest of US higher education for the working class and much of the middle-class, is less promising. For-profit colleges faced increased scrutiny, and some closed down, but others morphed into state-owned robocolleges that were still of questionable value. Remaining for-profit colleges also rebounded as they closed physical campuses and became exclusively online. 

While many state flagship universities continue to thrive, lesser know state universities have seen dramatic enrollment losses, even as they develop an online presence.

Online Program Managers, third-party vendors for universities, gained scrutiny in the 2020s, but ultimately there was little oversight. Even without oversight, OPMs began to fold because they were not offering the value they promised, even with degrees and certificates from elite universities like Harvard, Yale, and MIT.  

Student loan debt has continued to rise, despite public outcries. But Republicans have blocked efforts for debt forgiveness in court, making college choice increasingly seen, and now known, as a bad bet by tens of millions of Americans. 

In 2021, we changed our name to the Higher Education Inquirer to reflect a more objective stance. But the College Meltdown, as a social phenomenon, continues. 

College Mania!, College Meltdown, and the other "C" Words

What are we seeing in US higher education and American society today?  Lower college enrollments (for some colleges), high student loan debt (for some consumers) and upward mobility and increasing wealth for others. Many of us hope to be the fortunate ones, through hard work and persistence.

Culture and society (including myths, marketing and advertising, and media) tell folks that higher education is essential and elite education is necessary for upward social mobility. Others see higher education, especially borrowing money to go to school, as a road to nowhere: of untold debt and unhappiness. What people are seeing would seem to be confusing, but it shouldn't be if we understand our system and how it works.  

 

Capitalism (also known as neoliberalism) is the underlying program or structure that guides behavior in the US. We are immersed in it. It also guides other values that we may hold about family, religion, government, and the economy. Under this system, the differences between the rich and poor have been increasing for more than a half century and life expectancy and fertility rates are stagnant.

Consumers are bombarded with stories that reflect how we should perceive higher education. The stories that we see and hear may vary and may appear contradictory if we are willing to look at all sides. Some of the stories are myths, others are downright lies. Targeted marketing means that we may not get the same messages as others. 

Class is how the program of capitalism works, with elites at the top, small business owners and managers in the middle, and workers who do the labor necessary to keep society running.  These distinctions may be small in some places and enormous in others, and there may even be overlap in wealth and income.  Social mobility is possible, but in the US social mobility is stagnant for many non-immigrants. Workers are sometimes appreciated but often unappreciated and even scapegoated. 

Communities are diverse and cut across class boundaries and even geography. Groups seen as homogeneous are rarely that. And stereotypes are used (and misused) as a short hand for understanding other people or even ourselves. 

Civics is a formal understanding how the program/system works and typically how to be a good citizen. The idea of what makes a good citizen varies. Civics can be used as a tool of social control or a tool of reform and innovation. 

Conflict consists of opposing thoughts and actions. It can exist inside of us as well as outside, causing cognitive dissonance for those who are mindful. Some degree of conflict is necessary for society to be healthy. Too much conflict can destroy the fabric of society. 

College Inc. Redux is Overdue

We desperately need a PBS Frontline updating of College Inc. This 2010 documentary by Martin Smith and Rain Media took us behind the curtains, into the big business of US for-profit higher education. At the time, College Inc. made an important statement: that for-profit higher education had become a racket, funded by greedy Wall Street investors, and that government oversight was necessary to rein in the worst abuses at schools like Corinthian Colleges and Ashford University.

 

 

From 2010 to 2012, the Senate Harkin Commission researched and exposed the systemic abuses of the largest for-profit colleges. And under President Obama, some of these abuses were addressed through policy changes at the US Department of Education, Department of Veterans Affairs, and Department of Defense. 

 

Times Have Changed, Not In a Good Way

 

Much has happened in the last decade and a half since College Inc. was produced. US higher education did not become less predatory, even as a number of for-profit colleges (Corinthian Colleges, ITT Tech, Art Institutes, Le Cordon Bleu, and Virginia College) were shuttered. Republicans worked to ensure that meaningful policy changes, like gainful employment safeguards, were blocked. And some of the worst predators (Kaplan and Ashford) morphed into businesses owned by state universities (Purdue and University of Arizona).

 

Online education has become pervasive despite concerns about its effectiveness. Content creators and facilitators have replaced instructors at large robocolleges like Southern New Hampshire University, Grand Canyon University, Liberty University Online, and the University of Phoenix. 

 

The for-profit (aka neoliberal) mentality has spread. Online Program Managers (OPMs) have brought for-profit education to non-profit institutions, carrying with it an enormous cost to consumers. Advertising and marketing has become out of control, helping fuel a manufactured College Mania of anxious parents and their children. 

 

Despite the College Mania, folks have become more skeptical of higher education, and for good reason. Student loan debt has further crippled the lives of millions of Americans as Republicans have stepped in to block debt forgiveness. Community colleges and some state universities have gone through significant enrollment declines. Small colleges have closed. And elite colleges have become more wealthy and powerful and controversial. Something not on the radar in the 2010 documentary or in popular culture at the time. 

Academia Insider (Andy Stapleton)

Andy Stapleton of Academia Insider provides a great public service to consumers by exposing the social realities of graduate school education. These YouTube videos should serve as an antidote to the College Mania! that persists in our society and pervades our popular culture--helping higher education consumers become more conscious of their most significant (and costly) life choices.

This YouTube video shows the bottom of the barrel, fake PhD's from diploma mills.  It's not something that has gotten much media attention, but it looks like a problem, especially for employers doing their due diligence in hiring. 

Stapleton provides many other videos that cover a variety of topics: from grad school applications to finding work after graduate school.  

 

Related links:

 

Academia Insider website 

 

Andy Stapleton's YouTube Channel

For-Profit College Owners Charged for Selling Fake Nursing Diplomas (David Halperin, Republic Report)

Zombie colleges roam the internet, here's how to spot a legitimate, living university (Chris Quintana, USA Today)

How You Pick Your College Could Cost You Lots (Mark Salisbury)

Is Your Private College Financially Healthy? (Gary Stocker)

Lies, Damn Lies, and Projections: Higher Ed Business and the Enrollment Cliff

While nothing is for sure, we at the Higher Education Inquirer believe higher education enrollment is going to continue on a slow downward slope for the foreseeable future, and that it could get worse. Looking at the numbers we see, it's difficult to imagine anyone arguing this. But today there is a debate between those who believe in the enrollment cliff and those who do not.

The Debate

Carleton College Professor Nathan Grawe has used the term "enrollment cliff" to describe the decline that is projected to come to a number of states within the next two years and with a trend that will last for a number of years. He uses information from a number of sources, including the Western Interstate Commission for Higher Education (WICHE) to make these estimates. These projected declines are the result of a decline in births during and after the Great Recession. US fertility and birth rates have been declining for generations, but enrollment has been shored up by in-migration and higher rates of high school graduation. These rates could increase as abortions are criminalized.  

US Department of Education enrollment projections are fueling the debate for enrollment cliff deniers. But HEI has observed that ED has been wrong in its projections for years and has largely maintained its faulty formula. Presumably the enrollment cliff deniers also don't believe in the projections by WICHE which predicts modest declines in the number of high school graduates. For the record, these deniers are not uniform in their beliefs, values, or their intentions. 

University of Wisconsin-River Falls Professor Neil Kraus, author of the Fantasy Economy: Neoliberalism, Inequality, and the Education Reform Movement, believes that "in the aggregate, higher ed enrollments are fairly constant over time, and if you go back decades, have gradually gone up." Kraus has a point. Relatively stable birth rates would seemingly keep enrollments stable, but there are other social, economic, and political factors in the equation. 

It's a Racket on Both Sides 

Some enrollment deniers may not be so sincere. Many in the education business, including the Department of Education, have vested interests in believing everything is OK. But it's not OK. And while funding is important, it's not the entire answer, especially when the money goes into the wrong (greedy) hands, as it frequently does. 

Higher education has become a racket that has garnered increasing public skepticism about its value. That does not mean that parents won't continue to buy into the college mania and encourage all their children to go to a college regardless of the costs, and the potential debt.   

Some who believe in the enrollment cliff, and pitch it to others, may also be insincere. The President of the University of Idaho, for example, has used the enrollment cliff to rationalize their purchase of the University of Phoenix to shore up their revenues, even though Idaho is not likely to feel dramtic looses in enrollment. There are undoubtedly many others who are using this phenomenon to scare people into buying and selling their products and services.

Coming to a Consensus?

Perhaps the term "enrollment cliff" needs to be defined or the term to define the enrollment decline needs to be renamed. No one can deny that US higher education has seen an enrollment peak and a slow steady decline since 2011. There are also estimates that population declines will occur in many states, as a result of out-migration patterns that have been ongoing. There are other states that will continue to see enrollment gains, especially in the South and West. Maybe enrollment cliff is too harsh a term, but reduced enrollment cannot be ignored. 

Related links: 

Department of Education Fails (Again) to Modify Enrollment Projections

State Budgets Are Downsizing (Pew)

College Meltdown 3.0 Could Start Earlier (And End Worse) Than Planned

Baby Boomers Turning 80: The Flip Side of the 2026 Enrollment Cliff

State Universities and the College Meltdown

"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent

US Department of Education Fails to Recognize College Meltdown

Forecasting the US College Meltdown

Higher Education, Technology, and A Growing Social Anxiety

The Era We Are In

We are living in a neoliberal/libertarian era filled with technological change, emotional and behavioral change, and social change. An era resulting in alienation (disconnection/isolation) for the working class and anomie (lawlessness) among elites and those who serve them. We are simultaneously moving forward with technology and backward with human values and principles. Elites are reestablishing a more brutal world, hearkening back to previous centuries--a world the Higher Education Inquirer has been observing and documenting since 2016. No wonder folks of the working class and middle class are anxious. 

Manufactured College Mania

For years, authorities such as the New York Federal Reserve expressed the notion (or perhaps myth) that higher education was an imperative for young folks. They said that the wealth premium for college graduates was a million dollars over the course of a lifetime--ignoring the fact that a large percentage of people who started college never graduated--and that tens of millions of consumers and their families were drowning in student loan debt. 

2U, Guild Education, and a number of online robocolleges reflected the neoliberal promise of higher education and online technology to improve social mobility.  The mainstream media were largely complicit with these higher ed schemes. 

2U brought advanced degrees and certificates to the masses, using brand names such as Harvard, MIT, Yale, USC, University of North Carolina, and the University of Texas to promote the expensive credentials that did not work for many consumers. 

Guild Education brought educational opportunities to folks at Walmart, Target, Macy's and other Fortune 500 companies who would be replacing their workers with robotics, AI, and other technologies. But the educational opportunities were for credentials from subprime online schools like Purdue University Global. Few workers took the bait. 

As 2U files for bankruptcy, it leaves a number of debt holders holding the bag, including more than $500M to Wilmington Trust, and $30M to other vendors and clients, including Guild Education, and a number of elite universities. Guild Education is still alive, but like 2U, has had to fire a quarter of its workers, even downsizing its name to Guild, as investor money dries up. It continues to spend money on its image, as a Team USA sponsor.    

The online robocolleges (including Liberty University, Grand Canyon University, University of Phoenix, Purdue University Global, and University of Arizona Global)  brought adult education and hope to the masses, especially those who were underemployed. In many cases, it was false hope, as they also brought insurmountable student debt to American consumers. Billions and billions in debt that cannot be repaid, now considered toxic assets to the US government. 

Along the way there have been important detractors in popular culture, especially on the right. Conservative radio celebrity Dave Ramsey, railed against irresponsible folks carrying lots of debt, including student loan debt. He was not wrong, but he did not implicate those who preyed on student consumers. On the left, the Debt Collective also railed against student loan debt, long before the right, but they were often ignored or marginalized. 

Adapting to a Brutal System

The system  works for elites and some of those who serve them, but not for others, even some of the middle class. Good jobs once at the end of the education pipeline have been replaced by 12-hour shifts, 60 hour work weeks, bullsh*t jobs, and gig work. 

Working-class Americans are living shorter lives, lives in some cases made worse not so much by lack of education, but by the destruction of union jobs, and by social media, and other intended and unintended consequences of technology and neoliberalism. Millions of folks, working class and some middle class, who have invested in higher education and have overwhelming debt and fading job prospects, feel like they have been lied to.

We also have lives made more sedentary and solitary by technology. Lives made more hectic and less tolerable. Inequality making lives too easy for those with privilege and lives too difficult for the working class to manage. Lives managed by having fewer relationships and fewer children. Many smartly choosing not to bring children into this new world. All of this manufactured by technology and human greed.  

The College Dream is Over...for the Working Class

There are two competing messages about higher education: the first that college brings opportunity and wealth and the second, that higher education may bring debt and misery. The truth is, these different messages are meant for two groups: pushing brand name schools and student loans for the most ambitious middle class/working class and a lesser form of education for the struggling working class. 

In 2020, Gary Roth said that the college dream was over. Yet the socially manufactured college mania continues, flooding the internet with ads for college and college loans, as social realities point to a future with fewer good and meaningful jobs even for those with degrees. Higher education will continue to work for some, but should every consumer, especially among the struggling working class, believe the message is for them? 

Related links:

More than half of college grads are stuck in jobs that don't require degrees (msn.com)

AI-ROBOT CAPITALISTS WILL DESTROY THE HUMAN ECONOMY (Randall Collins)

Edtech Meltdown 

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

2U Declares Chapter 11 Bankruptcy. Will Anyone Else Name All The Elite Universities That Were Complicit?

College Mania!: An Open Letter to the NY Fed (2019)

"Let's all pretend we couldn't see it coming": The US Working-Class Depression (2020)

The College Dream is Over (Gary Roth, 2020)

Academic Capitalism and the next phase of the College Meltdown (updated January 26, 2022)

It appears we have entered a new phase of Academic Capitalism and the College Meltdown. The previous phase involved College Mania! and the growth of the "educated underclass" (including gig workers, adjuncts and postdocs), Wall Street over-speculation, the divestment of corporations from employee benefits, and the rise and fall of for-profit colleges: Corinthian Colleges, ITT Tech, Education Management Corporation, Apollo Group, Education Corporation of America, and Laureate Education.  

Enrollment at proprietary schools is down about 40 percent from its peak in 2010 and higher education enrollment has dropped every year for the last decade.  In absolute numbers, community colleges have taken the largest hit.  Regional public universities have also experienced large enrollment declines.

At other schools, student aid has shifted from "needs based" to "merit based" making college choice for low- and moderate income families an even riskier choice. 

Student loan debt has crippled millions of working families, but neoliberal experts at Goldman Sachs and the Federal Reserve do not see a significant problem. 

According to the Federal Reserve, the student debt problem is ameliorated by the decline in births to people of lower socio-economic status.  The FED has also consistently reported that the debt is not a huge drag on the economy (less than 0.05 percent per year). Those developments, along with an anemic but growing student debt movement, have meant that the chance for progressive and meaningful change is limited under the Biden administration, but possible in the long run.  

This new phase of the College Meltdown has strong roots in the 1980s and involves the continued growth of the educated underclass (including elite overproduction in higher education) and more bulls*t jobs, the privatization of public higher education, the proliferation and consolidation of online program managers (OPMs) working for name brand and lesser known schools, non-profit subprime colleges, robocolleges, continued grade inflation, and the fall of the US federal student loan program. In 2020 and 2021, higher education also received three massive federal bailouts.  

Larger developments include the resurgence of authoritarianism, the hollowing out of America, and the global climate change crisis.  Despite these glaring existential problems, a looming college enrollment cliff in 2026, and growing dismay by working families, irrational exuberance and false optimism continues among most college business officers and middle-class consumers.  

Will austerity and excesses in the system lead to even more dramatic failures? Will the states and federal government ask for more transparency and accountability of the government funds that keep the system afloat?

What should we be observing in this new phase:  

1. The growth (and power) of the "educated underclass"

2. The effects of student loan debt on working families and social institutions (including religion and the economy) 

3. The state of the student loan forgiveness movement and popular opinion about student loan forgiveness

4. The health of the US Department of Education's Student Loan Portfolio

5. The growth of Online Program Managers

6. The degree that public universities are serving their citizens

7. The amount of money spent on marketing and advertising in higher education

8. Analyses of the FED, big banks, and rating agencies about the K-12 pipeline, higher education, student loan debt, and the growth of the educated underclass 

9. Local, state, and federal responses to "savage inequalities" in the K-12 pipeline, student loan debt, and the growth of the "educated underclass"

10. The rise of authoritarianism/neofascism in US education and the US as a whole  (e.g. mass surveillance, anti-intellectualism, hate crimes)

11. In deference to Bryan Alexander and his upcoming book "Universities on Fire" I must include global climate change as a phenomenon that must be observed and dealt with.  Failure to address this existential problem makes the other issues irrelevant.  

References

• Lawsuit alleges top colleges illegally collude to limit financial aid (Ivana Saric, Axios)
• USC Pushed a $115,000 Online Degree. Graduates Got Low Salaries, Huge Debts (Lisa Bannon and Andrea Fuller, WSJ)
• The Semi-Rich and Elite Overproduction (Matthew Stewart, Peter Turchin and Higher Ed)
• Student Debt From Private Lenders Hits All-Time High (Alexis Gravely, Inside Higher Education)
• Students Are Living In Hotels & Cars Due To Lack Of Campus Housing In California (Dantee Ramos)
• The Grade Inflation–College Completion Connection (Elizabeth Redden, Inside Higher Education)
• Low Literacy Levels Among U.S. Adults Could Be Costing The Economy $2.2 Trillion A Year (Forbes)
• Colleges See Best Gains in Decades Thanks to Private Investments (Janet Lorin, Bloomberg)
• Enrollment algorithms are contributing to the crises of higher education (Alex Engler, Brookings Institution)
• A Generation of American Men Give Up on College: ‘I Just Feel Lost (Douglas Belkin, WSJ)
• The Great Master’s-Degree Swindle (Kevin Carey, CHE)
• The Number of Colleges Continues to Shrink (Doug Lederman, Inside Higher Education)
• Pennsylvania system board votes to merge 6 institutions into 2 (Jeremy Bauer-Wolf, Higher Ed Dive)
• ‘Financially Hobbled for Life’: The Elite Master’s Degrees That Don’t Pay Off (Melissa Korn and Andrea Fuller, WSJ)
• Spring Numbers Show 'Dramatic' Drop In College Enrollment (Elissa Nadworny, NPR)
• States Step In To Stop Colleges Holding Transcripts Ransom For Unpaid Bills (Jon Marcus, NPR)
• Bond Boom Comes to America’s Colleges and Universities (Juliet Chung and Melissa Korn, WSJ)
• Colleges Could Lose $183 Billion During Pandemic (Emma Whitford, IHE)
• A Brutal Tally: Higher Ed Lost 650,000 Jobs Last Year (Dan Bauman, CHE)
• Tempering the Baby Bust Financial Hit (Phillip B. Levine, IHE)

This article was updated November 11, 2021 to include a link to elite overproduction in higher education and on January 26, 2022 to include a list of recent references.  

College Mania!: An Open Letter to the NY Fed (Opinion)

• Despite Rising Costs, College Is Still a Good Investment (Jaison R. Abel and Richard Deitz, NY Fed)
• The Educated Underclass: (Gary Roth in Inside Higher Education)
• College Is Not an Investment (George Leef in Forbes, 2013)
• "Crapademia" and the Mis-overeducation of America
• Is College Still Worth It? It’s Complicated (Saint Louis Fed)

I just about had a heart attack reading the headlines from two NY Federal Reserve researchers in Buffalo, that college was still a "good investment" despite the costs. The authors, Jaison R. Abel and Richard Deitz, showed a few graphs indicating that college completion still resulted in significant wage premiums, and muttered something about “back of envelope” projections to prove their point.

Are these people mad? Have they not read Annie Nova (CNBC), Jillian Berman (Marketwatch) or Mike Vasquez (Chronicle of Higher Education)? Have they not glanced at Wikipedia or thelayoff.com or bothered to use IPEDS help? Have they read Suzanne Mettler’s “Degrees of Inequality”? Have they ever heard of the layoff.com or College Meltdown? Don't they listen to Dave Ramsey on the radio? The answer is no and probably no, no, no, no, no, no, definitely not because it’s too heavy, no, no, and no.

Have these guys no understanding of the outrageous costs of higher education: tuition, housing, board, text books, transportation, computers, fees, officially licensed college t-shirts, football tickets, concert tickets, pizza, beer, drugs, pregnancy tests, and who know what all else?

Don't they know about the millions who are underemployed after college, the millions that have delayed leaving home, delayed marriage, delayed having children, and delayed starting businesses? Don’t they know anyone who is suffering from the College Meltdown? Have they ever heard of the “gig economy” or talked to an “adjunct professor”? Don't they have friends or coworkers who have nervously cosigned on loans for their children?

Speaking of businesses, haven’t these NY Fed guys figured out that there is a failing for-profit college system, Bryant & Stratton College, luring people with slick ads, whose corporate headquarters is literally two blocks from their office? A school whose target demographics include single mothers with jobs and people with two jobs, who already can't make ends meet?

In 2019, subprime Bryant & Stratton College will be luring hardcore gamers with their esports programs. BSC already has junior college basketball at the dwindling Buffalo campus.

If you read the small print in the NY Fed article, these two wise guys from Buffalo oh so briefly mention that the wage premium doesn’t apply to 25 percent of the people who start. They note that the wage premium is muted in the 40 percent who don’t finish college. And the wealth premium, you know, the actual return on investment after trying to pay off the loans? Forget about it.

They don’t mention that college students are selling their bodies ("Sugar Babies") across the US or selling drugs to get through college. (For the record, I sold my body very cheap to the US Army for an ROTC scholarship to get out of Western Pennsylvania).

These guys don’t mention that more than 40 percent of all student debtors are not paying off their principal. Or that millions of Millennials with student debt are delaying marriage and kids, not starting families or businesses. And by having fewer kids, they are setting the nation up for another phase of the College Meltdown in 2026.

Nor did they note that peak enrollment was in 2010-11 and that numbers have decreased every year since then. I suppose they’d say that was all due to a great economy, like so many others who do not live near reality, even in Buffalo. Really, it would never have anything to do with outrageous prices or record-setting inequality.

And wait a second. Aren’t these two the guys who wrote College is Not for Everyone, back in 2014? What has happened? Have they too contracted College Mania?

Perhaps the men are talking about the business of education, which has been a good investment for some. The higher ed “racket” involving dorm building, restaurant building, gyms and climbing walls.  Or the student loan business that’s booming and student loan asset-backed securities also known as SLABS. Or the online program managers that actually run colleges online. Or the marketing and ad agencies that are profiting hand over fist, as some students literally live in their cars or struggle with hunger. Or maybe they are talking about the bright future behind unregulated “human capital contracts” (What could go wrong?).

But why should I be so angry, literally fed up? The NY Fed is not the only organization feeding the “College Mania!” It’s everyone, aside from Dave Ramsey, Thomas Frank, and too few others. But who reads Thomas Frank? Hopefully it’s the same people who read the two guys from the NY Fed.