The Higher Education Inquirer: Investigating the Dark Corners of U.S. Higher Ed

For nearly a decade, the Higher Education Inquirer (HEI) has cultivated a reputation for relentless, independent journalism in a field often dominated by press-release rewrites and trade-conference boosterism. In 2024 and 2025, that commitment has been on full display, with a series of investigations that not only expose institutional negligence and corporate greed, but also demand structural change.

Following the Money: GI Bill Loopholes and Veteran Betrayal

One of HEI’s most impactful 2025 stories examined how billions in GI Bill funds—more than Pell Grants or state scholarships—are diverted to for-profit and low-performing nonprofit institutions. Despite promises of career advancement, many veterans end up underemployed and in debt. The reporting points to deliberate policy gaps, such as the weakened 90–10 rule, that incentivize predatory recruitment over educational quality.

Student Debt Transparency: A FOIA Offensive

HEI has also launched an ambitious Freedom of Information Act campaign to shed light on the federal student loan portfolio and on how rarely student loan debt is discharged through bankruptcy. Requests to the Department of Education seek data going back to 1965—records that could help quantify decades of policy drift away from borrower relief.

The FOIA strategy doesn’t stop at the Department of Education. HEI has queried the Securities and Exchange Commission for complaint data against online program managers 2U and Ambow Education, bringing corporate accountability into sharper focus.

Beyond the Campus: Immigration, Religion, and Geopolitics

While student debt remains a central concern, HEI has broadened its investigative reach. In March 2025, it filed a FOIA with the State Department for details on more than 300 revoked student visas, a move to illuminate opaque policies that can upend lives without public explanation.

Other pieces have examined the rise of Christian cybercharter schools, warning of a drift toward ideological indoctrination in taxpayer-funded education. Internationally, HEI has scrutinized the Gaza Humanitarian Foundation’s U.S. media tour, questioning the intersection of higher education, faith-based advocacy, and political agendas.

Why This Work Matters

What makes HEI’s journalism unique is its sustained follow-through. Many outlets publish a single exposé and move on. HEI revisits stories months or years later, tracking the real-world consequences of policy changes and institutional behavior. This persistence has helped keep public attention on issues like the Corinthian Colleges collapse and the broader failure to deliver promised student debt relief.

By pairing data-driven reporting with insider accounts and whistleblower input, HEI not only documents abuse but also lays out pathways for reform. In a higher education system where financialized logic often outweighs student welfare, that combination is increasingly rare—and increasingly necessary.

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Sources:

• Higher Education Inquirer

• Higher Education Inquirer – GI Bill Reform

• University Leadership Central

• Student Affairs Connection

From Hackathon to Higher Ed: BlackRock’s Quiet Capture of the University

BlackRock’s recent promotional piece, “From Hackathon to Higher Ed: The BlackRock for Universities Story,” presents the financial giant as an innovative, student-focused partner in education. On the surface, it’s a compelling narrative: a creative idea born at a company hackathon grows into a program that gives college students access to powerful investment tools and mentorship from professionals. But beneath this polished story lies a deeper concern—one that speaks to the creeping corporatization of higher education and the normalization of Wall Street ideologies on campus.

BlackRock for Universities (BLK4U) isn’t just an educational outreach initiative. It’s a branding vehicle. It exposes students—especially those in student-managed investment funds (SMIFs)—to BlackRock’s proprietary Aladdin platform, a cornerstone of the company’s vast influence in the global asset management industry. The program’s reach into university classrooms and finance labs presents itself as educational, but it’s fundamentally about cultivating loyalty and familiarity with BlackRock’s tools and worldview.

BLK4U’s narrative of empowerment masks a deeper structural reality: it privileges institutions that already have access to well-funded investment programs. While the article notes some outreach to HBCUs and diverse student groups, the core of the initiative targets elite universities with robust finance programs. The result is a form of digital gatekeeping, where certain students are primed to succeed in finance while others are left out of the pipeline entirely. Rather than democratizing opportunity, BLK4U reinforces existing hierarchies—between institutions, students, and regions.

What’s missing from BlackRock’s story is any serious reflection on the ethical dimensions of its work or the broader implications of its presence in academia. Students aren’t being asked to examine the role that BlackRock plays in climate finance, corporate governance, housing markets, or public pensions. They’re not learning about the critiques of financialization or the democratic consequences of concentrated economic power. They’re learning how to use Aladdin.

In this way, BLK4U exemplifies the shift from education as a public good to education as workforce training. Students are taught to speak the language of portfolio optimization, but not to question why wealth is so unequally distributed or how the financial sector has shaped those outcomes. They’re trained in storytelling, but not in accountability.

The story’s hackathon origin is meant to emphasize grassroots innovation, but hackathons themselves are often used within corporations to generate ideas that serve institutional goals—not the public interest. It’s unlikely that a program like BLK4U would have moved forward if it didn’t align with BlackRock’s long-term strategy of influence-building, talent acquisition, and brand saturation. Calling this initiative a “win for students” is disingenuous without acknowledging the asymmetries of power it reinforces.

Even BlackRock’s claim to promote “financial well-being” deserves scrutiny. Whose financial well-being? For whom is this education truly built? The firm manages trillions in assets for governments, pension funds, and corporations, but its influence has drawn bipartisan criticism—from the left for its role in exacerbating inequality and climate risk, and from the right for its ESG positions and market dominance. Embedding BlackRock’s ideology into college finance programs risks training the next generation of financial professionals not to challenge that power, but to replicate it.

What we see in BLK4U is not an isolated case, but part of a broader trend in which corporate actors shape higher education behind the scenes. Whether through tech platforms, consulting partnerships, or curriculum design, companies like BlackRock are quietly steering the future of education toward their own ends. These programs may look like public service, but they function as strategic investments in control and compliance.

As the Higher Education Inquirer has long documented, the privatization of knowledge and the encroachment of financial interests into academic life are not theoretical concerns—they are unfolding in real time. BlackRock’s venture into the classroom is not just a story about mentorship or innovation. It’s a story about soft power, captured institutions, and the narrowing of what education is allowed to be.

In a truly democratic education system, students would not only learn how to use tools like Aladdin—they would also learn how to critique them. Until that’s part of the curriculum, programs like BLK4U deserve far more skepticism than celebration.

Triumphalism in Decline: A Critique of “They Attack Because We’re Strong”

In his recent Inside Higher Ed opinion piece, “They Attack Because We’re Strong,” Frank Fernandez argues that American higher education is under fire not because it is failing, but because it is too powerful and influential. He calls for a long-view perspective that celebrates the accomplishments of U.S. colleges and universities over the past century. But his essay—well-intentioned as it may be—reads less as a sober reflection and more as institutional nostalgia, untethered from the brutal realities of the present.

Fernandez’s triumphalism overlooks or distorts several truths. It is true that U.S. universities have had moments of undeniable achievement: scientific breakthroughs, professional training, and expansion of access. But to say “higher education won” is to ignore the hollowing out of public trust, the corporatization of academia, and the structural harm inflicted on millions of students and contingent workers. If this is victory, it has come at a staggering cost.

“Higher Education Won”? Who Lost?

One of the glaring absences in Fernandez’s narrative is any sustained acknowledgment of the student debt crisis—more than $1.7 trillion in outstanding loans that have left borrowers in financial limbo for decades. The author does not address how rising tuition, stagnating wages, and declining public investment have turned the promise of higher education into a burden for the working class and communities of color.

Nor does he wrestle with the implications of an adjunct majority workforce. Most college instructors today work under precarious contracts with little pay, no benefits, and no job security. This is not a sign of institutional strength. It is a labor crisis.

The rhetorical move to compare today’s struggles with the early 20th century glosses over the fact that the institutions that once expanded access are now increasingly exclusionary. Public flagships and elite privates alike are doubling down on selectivity, building billion-dollar endowments, and investing in luxury amenities while cutting humanities departments and hiking student fees.

If the past 100 years have brought expansion, the past 20 have brought erosion.

Legitimacy Cannot Be Willed into Being

Fernandez concedes that “our challenge in this new era is primarily one of legitimacy.” But he frames this as a problem of perception, not performance. He cites faculty critiques over gendered language in a voter turnout study as a distraction, implying that the real work of the academy is hindered by too much internal debate. But that line of thinking presumes that legitimacy can be restored by tone and unity, not by systemic reform.

Legitimacy is not gained by declaring relevance—it is earned through material impact. That means resisting extractive tuition models, ending the abuse of contingent labor, and seriously confronting how the industry has facilitated racial and economic stratification.

It also means acknowledging that some of the conservative critiques—about administrative bloat, about ideological insularity, about weak accountability mechanisms—are not entirely without merit. These issues are not the inventions of “Trump acolytes,” but of decades of elite capture and mission drift.

A House Divided

Perhaps most troubling is Fernandez’s call for national solidarity among faculty and institutional leaders, modeled after the early AAUP. But today’s higher education system is profoundly stratified. Community colleges face declining enrollments and funding cliffs. HBCUs and regional publics have long been underresourced. For-profit colleges exploit the most vulnerable. And elite institutions continue to hoard wealth and status.

There is no shared struggle here. There is no unified front. The idea that faculty from a state university in Texas or an adjunct at a California community college share the same institutional mission as leadership at Princeton or Stanford is a comforting illusion. Solidarity will not emerge without reckoning with this inequality.

Conclusion

Fernandez asks us to see the attacks on higher ed as a signal of strength. But what if these attacks are, in part, the result of decades of institutional failure? What if irrelevance is not imposed from the outside but cultivated from within—through inaccessibility, arrogance, and systemic exploitation?

If higher education is to have a future worth defending, it will require more than collective nostalgia and appeals to tradition. It will require a commitment to equity, transparency, and accountability—not just to the ideals of the past, but to the people failed by the system today.

Sources:

• U.S. Department of Education. “Student Loan Portfolio Summary.” Federal Student Aid.

• AAUP. “Data Snapshot: Contingent Faculty in US Higher Ed.”

• Center for American Progress. “The Cost of Cuts: A Look at the Ongoing Crisis in Public Higher Education.”

• Georgetown University CEW. “The College Payoff.”

• The Century Foundation. “How Public Colleges Have Been Undermined.”

• National Center for Education Statistics (NCES). Integrated Postsecondary Education Data System (IPEDS).

Crisis Talk as Business Strategy: A Review of a Chronicle of Higher Education Mass Email

On July 22, 2025, The Chronicle of Higher Education distributed a mass email promoting an upcoming online event titled “The Path Ahead for Higher Ed”. The message, signed by Deputy Managing Editor Ian Wilhelm, framed the event as a vital opportunity for “higher ed’s business and nonprofit partners” to better understand the current challenges colleges face and how they might “help and provide value.”

While presented as a call for collaboration, the subtext of the message suggests a commercial logic that raises deeper questions about the Chronicle’s position in the higher education ecosystem. The email is not aimed at students, educators, or the broader public, but rather at vendors and consultants — those who stand to profit from institutional volatility.

Key Themes: Crisis and Commerce

Wilhelm identifies a list of familiar problems: demographic shifts, declining admissions, skepticism about the value of a degree, student protests, and political upheaval. These issues are real. According to data from the National Student Clearinghouse, total postsecondary enrollment in the U.S. has declined by more than 10 percent since 2012, with sharper drops among community colleges and for-profit institutions.

A recent ECMC Foundation survey (2024) shows that just 39 percent of teenagers believe education beyond high school is necessary — down from 60 percent in 2019. Public trust in higher education has also declined. A 2023 Gallup poll showed that only 36 percent of Americans had a “great deal” or “quite a lot” of confidence in colleges and universities, down from 57 percent in 2015.

What’s less clear is how a marketing webinar for outside vendors will meaningfully address these structural issues. The Chronicle’s event is positioned not as a public forum or investigative inquiry, but as a networking and insight session for firms involved in “technology, student services, consulting, design, or another function.” The framing shifts the conversation from public good to private opportunity.

The Chronicle’s Role: Observer or Participant?

For decades, The Chronicle of Higher Education has maintained a reputation as a leading source of news and analysis on academia. But it also functions as a platform for advertisers and vendors to access a lucrative market of institutional clients. In 2023, The Chronicle earned an estimated 65 percent of its revenue from advertising and sponsored content, according to industry data aggregated by MediaRadar.

This business model complicates its journalistic neutrality, especially when the publication hosts events that blur the line between reporting and consulting. The July email does not disclose whether the August 13 session is sponsored, or which companies may be involved. Nor does it acknowledge the Chronicle’s role in promoting firms that may contribute to the very instability being discussed — including online program managers (OPMs), edtech platforms, and private equity–backed service providers.

The Missing Voices

Absent from the message are the voices of students, contingent faculty, and debt-burdened alumni — those most impacted by the policies and market strategies shaping higher education. Nearly 70 percent of instructional staff in U.S. colleges are now non-tenure-track, often working without benefits or job security. Student loan debt remains at $1.7 trillion, with over 5 million borrowers in default as of early 2025, according to Federal Student Aid.

These constituencies are not addressed in the email. Instead, the implicit audience is those with the capital and infrastructure to offer “solutions” to the crisis — many of whom have historically benefited from that very crisis.

Chronicle of Higher Ed Business

The Chronicle’s invitation reflects a common pattern in U.S. higher education: the packaging of systemic decline as a service opportunity. Whether the August 13 event delivers meaningful insight or simply reinforces the revolving door between higher education institutions and their vendors remains to be seen.

But the framing is clear. This is not a convening to discuss how to reduce tuition, reinvest in teaching, or restore public trust. It is a pitch to business partners on how to better position themselves in a distressed but still profitable sector.

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Sources:

National Student Clearinghouse Research Center, “Current Term Enrollment Estimates,” Spring 2024
ECMC Foundation, “Question the Quo Survey,” 2024
Gallup, “Confidence in Institutions,” 2023
MediaRadar, “Education Media Ad Spend Trends,” 2023
U.S. Department of Education, Federal Student Aid Portfolio, Q1 2025
American Association of University Professors (AAUP), “Annual Report on the Economic Status of the Profession,” 2024

Did Higher Education Ever Have a Soul? A Response to Frank Bruni

In his New York Times opinion piece, “I’m Watching the Sacrifice of College’s Soul,” Frank Bruni laments the erosion of academic rigor and the rise of artificial intelligence in the college classroom. He worries that students read less, care more about networking, and rely too much on AI to write their papers. And he ties this perceived moral decay to the broader culture war era under a second Trump administration.

But if we are truly asking whether college has lost its soul, the answer lies not just in classroom etiquette, grade inflation, or even AI. These are surface symptoms. The deeper rot goes back much further—and runs much deeper.

In 2025, as student debt surpasses $2 trillion, adjuncts live paycheck to paycheck, and billion-dollar university endowments sit idle amid growing social crises, the question lingers like a ghost in the lecture hall: Did higher education ever have a soul?

Bruni suggests that something noble has been lost. But to mourn a fall from grace assumes there was grace to begin with. It assumes the soul of higher education was once intact—whole, ethical, virtuous. That assumption demands interrogation.

A Soul in Theory
From the founding of Harvard in 1636 to the post-WWII GI Bill expansion, there have always been idealistic threads: Socratic dialogue, liberal education, shared governance, land-grant missions to uplift the working class. Thinkers like John Dewey and W.E.B. Du Bois believed that education could be democratic and emancipatory, a crucible for ethical development and social justice.

But for every Du Bois, there was a Booker T. Washington being positioned to serve capitalism. For every land-grant university, there were extractive relationships with Indigenous lands and communities. For every golden age of college access, there were doors closed to women, Black Americans, and the working poor.

The soul, it seems, has always lived uneasily beside the dollar.

The Neoliberal Turn
In the last half-century, the contradictions have only grown starker. Beginning in the late 1970s and accelerating in the Reagan era, higher education became increasingly privatized, commodified, and financialized. Universities morphed into entrepreneurial corporations, presidents became CEOs, students became customers, and faculty became precarious gig workers. The soul of higher education—if ever there was one—was sold off in pieces. Not in a single transaction, but through thousands of small decisions: outsourcing food services, patenting research, expanding sports empires, launching predatory online programs, partnering with Wall Street, and calling it “innovation.”

Today, we see the results:

For-profit colleges and edtech firms exploiting vulnerable populations.

Public universities chasing out-of-state tuition while abandoning their mission to serve local and working-class communities.

DEI initiatives used as branding while workers on campus remain underpaid, underinsured, and over-policed.

Boards of trustees stacked with bankers, developers, and tech executives more loyal to markets than to mission.

And beyond the classrooms that Bruni mourns, darker truths persist—truths rarely explored in glossy alumni magazines or New York Times op-eds:

Fraternities continue to operate as quasi-criminal enterprises, protected by wealthy alumni and timid administrations. Hazing deaths, sexual assault, racial abuse, and alcohol-fueled violence are treated as unfortunate exceptions, rather than the predictable outcomes of a toxic culture of entitlement and silence.

NCAA football, the crown jewel of many flagship universities, thrives on the unpaid labor of student-athletes whose bodies are sacrificed for weekend entertainment and television contracts. Behind the pageantry lie lifelong injuries, untreated concussions, and a trail of lawsuits over traumatic brain damage—while coaches and athletic directors rake in seven-figure salaries.

These are not footnotes to the story of higher education’s moral decline. They are the story—central to understanding what kind of “soul” has actually animated American higher education for decades.

A Soul in Struggle
Yet to say higher education never had a soul would be to erase the people who have fought—and still fight—for it to matter.

The soul has lived in the pushback: in student protests for civil rights and against apartheid; in hunger strikes for living wages and union recognition; in the quiet resilience of community college faculty who refuse to give up on their students despite impossible workloads and poverty wages. It’s found in the Black campus movements of the 1960s and today, in the labor organizing of adjuncts and graduate students, and in underfunded tribal colleges and HBCUs resisting systemic neglect.

And the soul is alive in critique itself—in those willing to ask not only what students are learning, but why the university exists, who it serves, and who it exploits.

Where Do We Go from Here?
Frank Bruni mourns the death of something noble. But perhaps what’s dying isn’t the soul of higher education—it’s the illusion that the soul was ever fully alive within institutions so deeply enmeshed in money, hierarchy, and exclusion.

If higher education once had a soul, it now lies fragmented—compromised by institutional betrayal, bureaucratic inertia, and a corporate logic that values prestige over people. But to ask whether it ever had a soul is to ask whether the soul resides in institutions at all, or in the people struggling within and against them.

Perhaps we shouldn’t romanticize the past, but neither should we resign ourselves to the present.

The soul of higher education may never have been whole. But it has always been contested. And in that contest—between commerce and conscience, exclusion and liberation, silence and speech—we may yet find the spark to reimagine what education could be.

Because if the university is to be saved, its soul must be fought for—not assumed, and certainly not bought.

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Sources:

• Bruni, Frank. “I’m Watching the Sacrifice of College’s Soul.” New York Times, July 14, 2025.

• U.S. Department of Education. Federal Student Aid Portfolio Summary. https://studentaid.gov/data-center

• The Century Foundation. “The Adjunct Crisis.”

• Flanagan, Caitlin. “Death at a Penn State Fraternity.” The Atlantic, November 2017.

• NPR. “Inside the Secret World of College Fraternities.”

• ESPN. “Concussion Lawsuits and the NCAA.”

• The Chronicle of Higher Education. “How Billion-Dollar Endowments Avoid Spending.”

• The Guardian. “Inside America’s College Debt Machine.”

• American Association of University Professors (AAUP). “Trends in Faculty Employment Status.”

• The Intercept. “EdTech and the Exploitation of Students.”

• Washington Post. “DEI for PR, Not for Pay.”

• Inside Higher Ed. “Boards of Trustees: Who They Really Represent.”

• NLRB Rulings and Union Filings, 2010–2025.

Flirtin' with Disaster: American Higher Education and the Debt Trap

They call it a “path to opportunity,” but for millions of students and their families, American higher education is just Flirtin' with Disaster—a gamble with long odds and staggering costs. Borrowers bet their future on a credential, universities gamble with public trust and private equity, and the system as a whole plays chicken with economic and social collapse. Cue the screeching guitar of Molly Hatchet’s 1979 Southern rock anthem, and you’ve got a fitting soundtrack to the dangerous dance between institutions of higher ed and the consumers they so aggressively court.

The Student as Collateral

For the last three decades, higher education in the United States has increasingly behaved like a high-stakes poker table, only it’s the students who are holding a weak hand. Underfunded public colleges, predatory for-profits, and tuition-hiking private universities all promise upward mobility but deliver it only selectively. The rest? They leave the table with debt, no degree, or both.

Colleges market dreams, but they sell debt. Americans now owe more than $1.7 trillion in student loans. And while some elite schools can claim robust return-on-investment, most institutions below the top tiers produce increasingly shaky value propositions—especially for working-class, first-gen, and BIPOC students. For them, education is often less an elevator to the middle class than a trapdoor into a lifetime of wage garnishment and diminished credit.

Institutional Recklessness

Universities themselves are no saints in this drama. Fueled by financial aid dollars, college leaders have expanded campuses like land barons—building luxury dorms, bloated athletic programs, and administrative empires. Meanwhile, instruction is increasingly outsourced to underpaid adjuncts, and actual student support systems are skeletal at best.

The recklessness isn’t limited to for-profits like Corinthian Colleges, ITT Tech, and the Art Institutes, all of which collapsed under federal scrutiny. Even brand-name nonprofits—think USC, NYU, Columbia—have been exposed for enrolling students into costly, often ineffective online master’s programs in partnership with edtech firms. The real product wasn’t the degree—it was the debt.

A Nation at the Brink

From community colleges to research universities, institutions are now being pushed to their financial and ethical limits. The number of colleges closing or merging has skyrocketed, especially among small private colleges and rural campuses. Layoffs, like those at Southern New Hampshire University and across public systems in Pennsylvania, Oregon, and West Virginia, show that austerity is the new norm.

But the real disaster is systemic. The American college promise—that hard work and higher ed will lead to security—is unraveling in real time. With declining enrollments, aging infrastructure, and increasing political pressure to defund or control curriculum, many schools are shifting from public goods to privatized risk centers. Even state flagship universities now behave more like hedge funds than educational institutions.

Consumers or Victims?

One of the cruelest ironies is that students are still told they are "consumers" who should “shop wisely.” But education is not like buying a toaster. There’s no refund if your college closes. There’s no protection if your degree is devalued. And there's no bankruptcy for most student loan debt. Even federal forgiveness efforts—like Borrower Defense or Public Service Loan Forgiveness—are riddled with bureaucratic landmines and political sabotage.

In this asymmetric market, the house almost always wins. Institutions keep the revenue. Third-party contractors keep their profits. Politicians collect campaign checks. And the borrowers? They’re left flirtin’ with disaster, hoping the system doesn’t collapse before they’ve paid off the last dime.

No Exit Without Accountability

There’s still time to change course—but it will require radical rethinking. That means:

• Holding institutions and executives accountable for false advertising and financial harm.

• Reining in tuition hikes and decoupling higher ed from Wall Street’s expectations.

• Fully funding community colleges and public universities to serve as real social infrastructure.

• Expanding debt cancellation—not just piecemeal forgiveness—for those most harmed by a failed system.

• Ending the exploitation of adjunct labor and restoring the academic mission.

Otherwise, higher education in the U.S. will continue on its reckless path, a broken-down system blasting its anthem of denial as it speeds toward the edge.

As the song goes:
"I'm travelin' down the road and I'm flirtin' with disaster... I got the pedal to the floor, my life is runnin' faster."
So is the American student debt machine—and we’re all strapped in for the ride.

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Sources:

• U.S. Department of Education, Federal Student Aid Portfolio

• “The Trillion Dollar Lie,” Student Borrower Protection Center

• The Century Foundation, “The High Cost of For-Profit Colleges”

• Inside Higher Ed, Chronicle of Higher Education, Higher Ed Dive

• National Center for Education Statistics

• Molly Hatchet, Flirtin’ with Disaster, Epic Records, 1979

Will Maximus and Its Subsidiary AidVantage See Cuts?

Maximus Inc., the parent company of federal student loan servicer Aidvantage, is facing growing financial and existential threats as the Trump administration completes a radical budget proposal that would slash Medicaid by hundreds of billions of dollars and cut the U.S. Department of Education in half. These proposed changes could gut the very federal contracts that have fueled Maximus's revenue and investor confidence over the last two decades. Once seen as a steady player in the outsourcing of public services, Maximus now stands at the edge of a political and technological cliff.

The proposed Trump budget includes a plan to eliminate the Office of Federal Student Aid and transfer the $1.6 trillion federal student loan portfolio to the Small Business Administration. This proposed restructuring would remove Aidvantage and other servicers from their current roles, replacing them with yet-unnamed alternatives. While Maximus has profited enormously from servicing loans through Aidvantage—one of the major federal loan servicers—it is unclear whether the company has any role in this new Trump-led student loan regime. The SBA, which lacks experience managing consumer lending and repayment infrastructure, could subcontract to politically favored firms or simply allow artificial intelligence to replace human collectors altogether.

This possibility is not far-fetched. A 2023 study by Yale Insights explored how AI systems are already outperforming human debt collectors in efficiency, compliance, and scalability. The report examined the growing use of bots to handle borrower communication, account resolution, and payment tracking. These developments could render Maximus’s human-heavy servicing model obsolete. If the federal government shifts toward automated collection, it could bypass Maximus entirely, either through privatized tech-driven firms or through internal platforms that require fewer labor-intensive contracts.

On the health and human services side of the business, Maximus is also exposed. The company has long served as a contractor for Medicaid programs across several states, managing call centers and eligibility support. But with Medicaid facing potentially devastating cuts in the proposed Trump budget, Maximus’s largest and most stable contracts could disappear. The company’s TES-RCM division has already shown signs of unraveling, with anonymous reports suggesting a steep drop-off in clients and the departure of long-time employees. One insider claimed, “Customers are dropping like flies as are longtime employees. Not enough people to do the little work we have.”

Remote Maximus employees are also reporting layoffs and instability, particularly in Iowa, where 34 remote workers were terminated after two decades of contract work on state Medicaid programs. Anxiety is spreading across internal forums and layoff boards, as workers fear they may soon be out of a job in a shrinking and increasingly automated industry. Posts on TheLayoff.com and in investor forums indicate growing unease about the company’s long-term viability, particularly in light of the federal budget priorities now taking shape in Washington.

While Maximus stock (MMS) continues to trade with relative strength and still appears profitable on paper, it is increasingly reliant on government spending that may no longer exist under a Trump administration intent on dismantling large parts of the federal bureaucracy. If student loan servicing is eliminated, transferred, or automated, and Medicaid contracts dry up due to funding cuts, Maximus could lose two of its biggest revenue streams in a matter of months. The company’s contract with the Department of Education, once seen as a long-term asset, may become a political liability in a system being restructured to reward loyalty and reduce regulatory oversight.

The question now is not whether Maximus will be forced to downsize—it already is—but whether it will remain a relevant player in the new federal landscape at all. As artificial intelligence, austerity, and ideological realignment converge, Maximus may be remembered less for its dominance and more for how quickly it became unnecessary.

The Higher Education Inquirer will continue tracking developments affecting federal student loan servicers, government contractors, and the broader collapse of the administrative state.

Does higher ed still make sense for students, financially? (Bryan Alexander)

[Editor's note: This article first appeared at BryanAlexander.org.]

Is a college degree still worth it?

The radio program/podcast Marketplace hosted me as a guest last week to speak to the question.  You can listen to it* or read my notes below, or both.  I have one reflection at the end of this post building on one interview question.

One caveat or clarification before I get hate mail: the focus of the show was entirely on higher education’s economics.  We didn’t discuss the non-financial functions of post-secondary schooling because that’s not what the show (called “Marketplace”) is about, nor did we talk about justifying academic study for reasons of personal development, family formation, the public good, etc.  The conversation was devoted strictly to the economic proposition.

The hosts, Kimberly Adams and Reema Khrais, began by asking if higher ed still made financial sense.  Yes, I answered, for a good number of people – but not everyone.  Much depends on your degree and your institution’s reputation.  And I hammered home the problem of some college but no degree.  The hosts asked if that value proposition was declining.  My response: the perception of that value is dropping.  Here I emphasized the reality, and the specter, of student debt, along with anxieties about AI and politics.  Then I added my hypothesis that the “college for all” consensus is breaking up.

Next the hosts asked me what changing (declining) attitudes about higher education mean for campuses.  I responded by outlining the many problems, centered around the financial pressures many schools are under.  I noted Trump’s damages then cited my peak higher education model.  Marketplace asked me to explain the appeal of alternatives to college (the skilled trades, certificates, boot camps, etc), which I did, and then we turned to automation, which I broke up into AI vs robotics, before noting gender differences.

Back to college for all: which narrative succeeds it?  I didn’t have a good, single answer right away.  We touched on a resurgence of vocational technology, then I sang the praises of liberal education.  We also talked about the changing value of different degrees – is the BA the new high school diploma? Is a master’s degree still a good idea?  I cited the move to reduce degree demands from certain fields, as well as the decline of the humanities, the crisis of computer science, and the growing importance of allied health.

After my part ended, Adams and Khrais pondered the role of higher education as a culture war battlefield.  Different populations might respond in varied ways – perhaps adults are more into the culture war issues, and maybe women (already the majority of students) are at greater risk of automation.

So what follows the end of college for all?

If the American consensus that K-12 should prepare every student for college breaks down, if we no longer have a rough agreement that the more post-secondary experience people get, the better, the next phase seems to be… mixed.  Perhaps we’re entering an intermediary phase before a new settlement becomes clear.

One component seems to be a resurgence in the skilled trades, requiring either apprenticeship, a short community college course of study, or on the job training.  Demand is still solid, at least until robotics become reliable and cost-effective in these fields, which doesn’t seem to be happening in at least the short term.  This needs preparation in K-12, and we’re already seeing the most prominent voices calling for a return to secondary school trades training.  There’s a retro dimension to this which might appeal to older folks. (I’ve experienced this in conversations with Boomers and my fellow Gen Xers, as people reminisce about shop class and home ec.)

A second piece of the puzzle would be businesses and the public sector expanding their education functions.  There is already an ecosystem of corporate campuses, online training, chief learning officers, and more; that could simply grow as employers seek to wean employees away from college.

A third might be a greater focus on skills across the board. Employers demand certain skills to a higher degree of clarity, perhaps including measurements for soft skills.  K-12 schools better articulate student skill achievement, possibly through microcredentials and/or expanded (portfolio) certification. Higher education expands its use of prior learning assessment for adult learners and transfer students, while also following or paralleling K-12 in more clearly identifying skills within the curriculum and through outcomes.

A fourth would be greater politicization of higher education.  If America pulls back from college for all, college for some arrives and the question of who gets to go to campus becomes a culture war battlefield.  Already a solid majority of students are women, so we might expect gender politics to intensify, with Republicans and men’s rights activists increasingly calling on male teenagers to skip college while young women view university as an even more appropriate stage of their lives.  Academics might buck 2025’s trends and more clearly proclaim the progressive aims they see postsecondary education fulfilling, joined by progressive politicians and cultural figures.  Popular culture might echo this, with movies/TV shows/songs/bestsellers depicting the academy as either a grim ideological factory turning students into fiery liberals or as a safe place for the flowering of justice and identity.

Connecting these elements makes me recall and imagine stories.  I can envision two teenagers, male and female, talking through their expectations of college. One sees it as mandatory “pink collar” preparation while the other dreads it for that reason.  The former was tracked into academic classes while the latter appreciated maker space time and field trips to work sites. Or we might follow a young man as he enters woodworking and succeeds in that field for years, feeling himself supported in his masculinity and also avoiding student debt, until he decides to return to school after health problems limit his professional abilities.  Perhaps one business sets up a campus and an apprenticeship system which it codes politically, such as claiming a focus on merit and not DEI, on manly virtues and traditional culture. In contrast another firm does the same but without any political coding, instead carefully anchoring everything in measured and certified skill development.

Over all of these options looms the specter of AI, and here the picture is more muddy.  Do “pink collar” jobs persist as alternatives to the experience of chatbots, or do we automate those functions?  Does post-secondary education become mandatory for jobs handling AIs, which I’ve been calling “AI wranglers”?  If automation depresses the labor force, do we come to see college as a gamble on scoring a rare, well paying job?

I’ll stop here.  My thanks to Marketplace for the kind interview on a vital topic.

*My audio quality isn’t the best because I fumbled the recording. Sigh.

Harvard and Yale Selling Off Private Equity Stakes

Harvard and Yale—titans of American higher education and longtime bellwethers of endowment strategy—are quietly offloading billions in private equity holdings. These moves, confirmed through multiple reports and market insiders, signal a significant shift in institutional investing, with potential ripple effects across the higher ed landscape and beyond.

The two Ivies, boasting the largest university endowments in the world ($50.7 billion for Harvard, $40.7 billion for Yale as of 2024), have long championed the “Yale model” of endowment investing: high allocations to illiquid assets such as private equity, venture capital, hedge funds, and real assets like timberland and oil. But the bloom is off the rose.

From Darling to Dilemma

Private equity once promised high returns, portfolio diversification, and access to elite deals not available to public investors. In the wake of the 2008 financial crisis, as traditional markets stagnated, institutions doubled down on alternative investments. For years, this strategy paid off—at least on paper.

But cracks have been forming.

Private equity valuations have come under scrutiny as deal activity has slowed, interest rates have risen, and exits through IPOs and acquisitions have dried up. Many private equity funds are now sitting on aging portfolios—so-called "zombie funds"—that have not returned capital in years. Meanwhile, limited partners like universities are increasingly liquidity-constrained, especially as operating costs rise and tuition-dependent revenues remain fragile.

Harvard Management Company and Yale’s Investment Office, once aggressive buyers, are now sellers on the secondary market. Reports indicate both institutions are using intermediaries to quietly market stakes in private equity funds—often at discounts of 10% to 20%, or more, below net asset value.

A Broader Retreat?

This retreat isn’t just about balance sheet management. It’s a broader reassessment of what endowments should be doing—and what risks they should be bearing.

Universities face mounting scrutiny over their massive, tax-advantaged endowments and their relationships with Wall Street. Critics question why institutions with social missions are entangled in opaque, leveraged, and sometimes predatory industries. Private equity firms, after all, have been deeply involved in sectors like healthcare, housing, for-profit education, and prison services—areas where returns often come at the cost of public welfare.

Moreover, the mismatch between the long lock-up periods of private equity investments and the growing need for financial flexibility is becoming more apparent. University administrators now must navigate volatile geopolitical conditions, student protests over divestment, and uncertain federal funding. Liquidity matters more than it did a decade ago.

The End of the Yale Model?

David Swensen, Yale’s late investment chief, revolutionized university finance with his embrace of illiquid alternatives. But times have changed. While the strategy made Yale’s endowment a model for copycats, today it may represent an outdated orthodoxy.

Harvard and Yale’s pivot may be the beginning of the end for the “Yale model” as we know it. Other institutions—especially smaller endowments that tried to mimic the Ivies—may find themselves stuck with toxic assets, unable to unload them without taking steep losses.

In fact, some mid-tier and small colleges may have to choose between covering operational costs and holding on to underperforming private equity positions. For those with limited financial cushions, the fallout could be existential.

Higher Ed’s Reckoning with Risk

The endowment shift also raises a philosophical question: What is the purpose of university wealth?

As elite schools back away from the riskier corners of Wall Street, perhaps it's time for a broader reckoning—about not just how universities invest, but why. Should institutions built on ideals of knowledge, access, and social progress be hand-in-glove with industries known for wage suppression, regulatory arbitrage, and asset stripping?

Harvard and Yale may be late to that moral realization. But their financial pivot is a sign that even the most powerful players can’t ignore reality forever.

In the age of growing student debt, declining public trust, and ballooning inequality, selling off a few private equity funds is a small move. But it could be the start of a larger shift—one where higher education finally begins to question whether its financial strategies align with its educational mission.

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If you have insights into university endowment strategies or are a whistleblower inside the private equity world, contact us confidentially at 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.

The Cruelty of Compliance: How the Trump Administration’s FSA Notice Doubles Down on Student Debtors While Privileging the Higher Education Racket

The U.S. Department of Education, under the renewed influence of the Trump Administration and its deep-pocketed friends in the for-profit and debt collection industries, has issued a chilling reminder of just how little it cares for the tens of millions of Americans drowning in student debt. Cloaked in bureaucratic language and peppered with sanctimonious calls for “shared responsibility,” the Department’s latest notice is, in truth, a battle cry in its war to privatize higher education, scapegoat the vulnerable, and enrich corporate cronies at the expense of working families.

Let’s call this what it is: a renewed assault on the student debtor class—the adjunct professors, the first-generation college students, the single mothers, the underemployed graduates who were sold a dream of economic mobility and handed a lifetime of debt servitude.

According to the Department, only 38% of borrowers are current on their loans, and nearly a quarter of all loans are in default or severe delinquency. Rather than treating this figure as evidence of systemic failure—ballooning tuition, predatory lending, lack of loan forgiveness—the Department responds by resuming draconian collection measures like the Treasury Offset Program and Administrative Wage Garnishment. This means that the government will begin seizing tax refunds and garnishing wages of those already pushed to the economic brink.

Worse, the Department has the audacity to wrap this cruelty in the rhetoric of “support” and “outreach.” Borrowers are told that they’ll be reminded of their “repayment obligations” as if they have simply forgotten—not that they’ve been buried under compound interest, stagnating wages, and fraudulent institutions that peddled worthless degrees. The supposed “enhancements” to income-driven repayment plans are little more than PR spin, insufficient to address the tidal wave of suffering inflicted by a broken system.

Then comes the most insulting part: the Department deflects blame onto institutions while simultaneously pressuring them to track down and guilt-trip former students. Colleges are urged to contact former enrollees and remind them they’re obligated to pay. Why? Not out of concern for their welfare—but because high cohort default rates (CDRs) might threaten those institutions' eligibility for federal aid money.

So we see the real game here: this isn’t about protecting students. It’s about protecting the federal loan program as a revenue engine and shielding the reputations of colleges—especially the for-profit diploma mills that flourished under prior Republican administrations. These institutions can continue hiking tuition and churning out underprepared graduates because the government, under Trump and his Department of Education appointees, would rather collect on unpayable loans than hold schools accountable.

Even more dystopian is the Department’s plan to publicly release “loan non-payment rates by institution.” While transparency sounds virtuous, this move will undoubtedly be weaponized—not to shut down abusive schools but to further stigmatize borrowers, especially those from marginalized backgrounds who attended underfunded schools with few resources.

Nowhere in this document is there any meaningful discussion of debt relief, student protections, or reining in college costs. Nowhere is there a reckoning with the fact that federal student aid has been transformed from a tool of opportunity into a tool of coercion. Instead, the Trump Administration signals it is open for business—the business of extracting wealth from the poor and funneling it into the private sector.

This notice is more than a policy update. It is a declaration of values. And those values are clear: Profit over people. Compliance over compassion. Privatization over public good.

The Higher Education Inquirer stands with the debtors. We see through the lies of “fiscal responsibility” and “integrity.” And we will continue to expose every cynical maneuver designed to crush the educated underclass in the name of neoliberal orthodoxy.

To student borrowers: You are not alone. You are not a failure. You are a victim of a system that was never built to serve you.

Here's the actual post from the US Department of Education, Federal Student Aid, dated May 5, 2025:

 

The United States faces critical challenges related to the federal student loan programs. According to estimates from the U.S. Department of Education (Department), only 38% of Direct Loan and Department-held Federal Family Education Loan Program borrowers are in repayment and current on their student loans. We also estimate that almost 25% of the entire portfolio is either in default or a late stage of delinquency. 

Given these challenges, the Department is taking immediate steps to engage student borrowers and support the repayment of their federal student loans. As announced in an April 21, 2025, press release, today, the Department will resume collections on its defaulted federal student loan portfolio with the restart the Treasury Offset Program and, later this summer, Administrative Wage Garnishment. The Department has also initiated an outreach campaign to remind all borrowers of their repayment obligations and provide resources and support to assist them in selecting the best repayment plan for their circumstances. The Department has also launched an enhanced income-driven repayment (IDR) plan process, simplifying how borrowers enroll in IDR plans and eliminating the need for many borrowers to manually recertify their income each year. 

Role of Institutions in Loan Repayment

Maintaining the integrity of the Title IV, Higher Education Act of 1965 (HEA) loan programs has always been a shared responsibility among student borrowers, the Department, and participating institutions. Although borrowers have the primary responsibility for repaying their student loans, institutions play a key role in the Department’s ongoing efforts to improve loan repayment outcomes, especially as the cost of college set solely by institutions has continued to skyrocket. Institutions are responsible for providing clear and accurate information about repayment to borrowers through entrance and exit counseling, and colleges and universities are responsible for disclosing annual tuition and fees and the net price to students and their families on the costs of a postsecondary education. The financial aid community has demonstrated its commitment to providing direct advice and counsel to students regarding their borrowing, but institutions must refocus and expand these efforts as pandemic flexibilities come to an end.

Under section 435 of the HEA, institutions are required to keep their cohort default rates (CDR) low and will lose eligibility for federal student assistance, including Pell Grants and federal student loans, if their CDR exceeds 40% for a single year or 30% for three consecutive years. The Department reminds institutions that the repayment pause on student loans ended in October 2023, and CDRs published in 2026 will include borrowers who entered repayment in 2023 and defaulted in 2023, 2024, or 2025. The Department further reminds institutions that those borrowers whose delinquency or default status was reset in September 2024 could enter technical default status / be delinquent on their loans for more than 270 days beginning in June and default this summer. As such, we strongly urge all institutions to begin proactive and sustained outreach to former students who are delinquent or in default on their loans to ensure that such institutions will not face high CDRs next year and lose access to federal student aid. 

Outreach to Former Students to Prevent Defaults

Given the urgent need to ensure that more student borrowers enter repayment and stay current on their loans, the Secretary urges each participating institution to provide the following information to all borrowers who ceased to be enrolled at the institution since January 1, 2020, and for whom they have contact information: 

• Remind the borrower that he or she is obligated to repay any federal student loans that have not been repaid and are not in deferment or forbearance;

• Suggest that the borrower review information on StudentAid.gov about repayment options; and 

• Request that the borrower log into StudentAid.gov using their StudentAid.gov username and password to update their profile with current contact information and ensure that their loans are in good standing. 

The Department urges that this outreach be performed no later than June 30, 2025. We do not stipulate how institutions reach out to borrowers, nor the specific information provided, as long as it covers the three categories described above. 

We also encourage institutions to focus their initial outreach on students who are delinquent on one or more of their loans in order to prevent defaults. We will provide additional information in the future to assist schools with identifying and communicating with these borrowers.

Publishing Loan Non-Payment Rates by Institution

The Department is committed to overseeing the federal student loan programs with fairness and integrity for students, institutions, and taxpayers. To that end, the Department believes that greater transparency is needed regarding institutional success in counseling borrowers and helping them get into good standing on their loans. 

The Department maintains data on the repayment status of federal student loan borrowers and in the past has provided information in the College Scorecard about the status of each institution’s borrowers at several intervals after they enter repayment. The Department plans to use this data to calculate rates of nonpayment by institution and will publish this information on the Federal Student Aid Data Center later this month. The Department will provide more information about this publication process soon. 

Thank you for your continued efforts to maintain the integrity of the Title IV, HEA loan programs. The Department values its institutional partners and looks forward to continued collaboration to place borrowers on the path to sustainable repayment of their loans.

Maximus AidVantage

[Image of AidVantage operations in Greenville, Texas. Note the barbed wire fence.]

The recent decision to have the Small Business Administration (SBA) take over the federal student loan portfolio has sent shockwaves through the world of education finance. As the SBA — an agency traditionally focused on supporting small businesses — begins to manage a multi-billion dollar portfolio of student loans, borrowers, consumer protection advocates, and financial experts alike are left to question what this transition means for the future of loan servicing, borrower protections, and higher education financing.

At the heart of this shift is the role of Maximus AidVantage, one of the major student loan servicers handling federal loans. Maximus has already come under scrutiny for its inefficiency, poor customer service, and mishandling of crucial borrower programs, such as Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) plans. The company’s track record has led to widespread frustration, with many borrowers reporting significant issues, including misinformation, lost paperwork, and mistakes that have placed them at risk of financial hardship.

Yet, despite these concerns, Maximus has maintained its position at the helm of federal student loan servicing. Its CEO, Bruce Caswell, has been compensated handsomely for overseeing the company’s role in this controversial space. According to recent financial reports, Caswell’s total compensation has included a base salary of over $1.3 million, with total compensation often exceeding $8 million when accounting for bonuses, stock options, and other forms of remuneration. This high pay, especially in light of the company’s poor performance in customer service and loan servicing, raises questions about the priorities of both the company and the federal government, which continues to entrust Maximus with managing the finances of millions of borrowers.

The Shift to the SBA: A Lack of Expertise

The most immediate concern surrounding the SBA’s takeover of student loan management is its lack of expertise in this field. The SBA’s core mission has been to assist small businesses, offering loan guarantees and financial support to promote economic growth. While it is well-equipped to manage business loans, the agency has no experience dealing with the unique and complex needs of student loan borrowers. Federal student loans involve intricate repayment plans, borrower protections, and specialized programs like PSLF, all of which require a deep understanding of the educational sector and the financial struggles of students and graduates.

Transferring such an important and complex responsibility to the SBA without a clear plan for adaptation could lead to mismanagement, inefficiencies, and disruptions for millions of borrowers. The SBA simply isn’t set up to handle issues like loan forgiveness, income-driven repayment plans, and the variety of special accommodations that are necessary for student borrowers. If the SBA isn’t adequately staffed or resourced to take on these new responsibilities, students could be left in the lurch, facing delays, confusion, and even errors in their loan servicing.

A Confusing Transition for Borrowers

For those already dealing with the intricacies of federal student loans, this transition to the SBA is likely to create a significant amount of confusion. Student loan borrowers rely on clear communication, accurate account management, and timely assistance when navigating repayment plans. The Department of Education has long been the agency responsible for ensuring that these programs are managed effectively, but with the SBA taking over, borrowers may face new systems, new contacts, and, potentially, a lack of clarity about their loan status.

One of the biggest risks in this transition is the potential disruption of critical loan repayment programs, such as PSLF, which allows public service workers to have their loans forgiven after ten years of payments. These programs require careful management to ensure that borrowers meet the necessary qualifications. The SBA is not accustomed to handling such programs and may struggle to maintain the same level of efficiency and accuracy, especially if the agency does not prioritize dedicated support for student loan borrowers.

Diminished Consumer Protections

Perhaps the most concerning outcome of the SBA taking over student loans is the potential erosion of consumer protections. The Department of Education has a specific mandate to protect borrowers, which includes holding loan servicers accountable for mishandling accounts and ensuring transparency in loan servicing practices. The SBA, however, has never been tasked with such consumer-focused regulations, and its shift to managing student loans raises concerns that borrower rights might not be adequately enforced.

For example, the SBA may not have the resources or inclination to monitor loan servicers like Maximus closely, allowing them to continue engaging in deceptive practices without fear of regulatory repercussions. The agency might also be less likely to step in when borrowers face issues such as misapplied payments, incorrect information about forgiveness programs, or poorly managed accounts. With the SBA’s focus on business rather than consumer welfare, student loan borrowers may find themselves facing more hurdles without the protections that the Department of Education once provided.

The Impact on Repayment and Forgiveness Programs

Another pressing issue is the potential disruption of repayment and forgiveness programs under SBA oversight. Programs like Income-Driven Repayment (IDR), designed to help borrowers pay off their loans based on their income, require careful management and regular updates. Similarly, the Public Service Loan Forgiveness program is highly specific and requires rigorous tracking of borrowers’ payments and work history to ensure they qualify for forgiveness after ten years.

If the SBA is not adequately equipped to handle these specialized programs, borrowers might find themselves in a precarious position, especially if their loans are mismanaged or if they are denied forgiveness due to administrative errors. The confusion caused by the transition could delay or even derail borrowers’ efforts to achieve loan forgiveness, leaving them stuck with debt for longer than expected.

The Role of Maximus: Financial Incentives Amidst Failure

Amidst the uncertainty of this transition, Maximus continues to play a key role in servicing the federal student loan portfolio. Yet, despite its persistent failures in managing accounts and borrower relations, Maximus has remained highly profitable, with Bruce Caswell’s executive compensation reflecting this success in terms of revenue but not in terms of customer satisfaction.

Maximus’s reported $8 million in total compensation for Caswell, despite the company’s history of customer complaints, raises serious questions about priorities. While Maximus rakes in millions from servicing federal loans, borrowers are left to deal with the consequences of mistakes, misinformation, and poor service. In a system where the stakes are incredibly high for borrowers, this disparity between executive pay and customer service is concerning, especially in light of the SBA’s takeover, which promises more uncertainty.

Adding to the controversy, Maximus has also been involved in labor disputes with the Communications Workers of America (CWA), its workers' union. These disputes, which have centered on issues such as wages, benefits, and working conditions, further complicate the company’s already tarnished reputation. Workers have accused Maximus of engaging in unfair labor practices and failing to adequately support employees who are tasked with assisting borrowers. If these labor disputes continue to affect employee morale and productivity, it could lead to even worse service for borrowers who are already dealing with a complicated and frustrating loan servicing process. The combination of poor customer service, labor unrest, and executive compensation that seems out of sync with the company’s performance paints a troubling picture for the future of student loan management under Maximus.

The Threat of Reduced Loan Forgiveness and IDR Plans

Adding to the turmoil surrounding the future of student loans is the growing effort by the U.S. government to reduce or even eliminate key student loan forgiveness programs like Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) plans. These programs were designed to provide crucial relief for borrowers working in public service or those struggling with debt relative to their income. However, recent reports suggest that the government may look to reduce eligibility for these programs, impose stricter requirements, or completely eliminate them altogether as part of broader fiscal policy adjustments.

The removal of or reductions to these programs would leave borrowers with fewer avenues to manage their debt, potentially increasing default rates and extending the time it takes for borrowers to repay their loans. For individuals in public service jobs or those facing financial hardship, these changes would have a devastating impact on their ability to achieve financial stability and pay down their student loans. If the SBA, with its lack of focus on education finance, inherits this responsibility without reinforcing these programs, borrowers might find themselves in a far worse position than ever before.

Furthermore, this reduction in borrower protections and streamlining of repayment options may also be part of a broader strategy to push more borrowers into private loan options, which could further exacerbate financial hardship for those who are already struggling. With private loans often carrying higher interest rates, less favorable repayment terms, and fewer options for deferral or forgiveness, such a shift would mark a significant pivot towards privatization, benefiting financial institutions while leaving borrowers with even fewer protections and much higher costs.

A Plan to Push Consumers Toward Private Loans?

Many experts are beginning to question whether the government’s plans for overhauling student loan servicing are part of a larger agenda to move borrowers toward private loans. By reducing or eliminating federal loan protections, forgiveness programs, and income-driven repayment options, the government may be attempting to create a vacuum in which private lenders can step in and offer alternative (and likely more expensive) financing options.

This push toward privatization could significantly increase profits for private lenders while making it harder for borrowers to repay their loans. With private loans lacking many of the protections and flexible repayment options offered by federal loans, such a shift could result in higher default rates and greater financial instability for borrowers, particularly for those with already high debt levels.

Conclusion: A New Era of Uncertainty

The transition of student loan servicing to the Small Business Administration represents a significant shift in the federal student loan system, one that could lead to inefficiencies, confusion, and a reduction in protections for borrowers. With agencies like Maximus AidVantage continuing to profit from loan servicing despite failing borrowers, ongoing labor disputes, and a focus on executive compensation over customer service, and the SBA stepping into a complex arena with limited experience, the future of student loan servicing seems fraught with challenges.

The push to reduce or eliminate key student loan forgiveness programs like PSLF and IDR only adds to the uncertainty, leaving millions of borrowers facing a potentially more difficult future. Moreover, the possibility of moving consumers toward private loans with fewer protections and harsher terms would deepen the financial struggles of many borrowers. This move underscores the importance of effective oversight and the need for federal agencies to prioritize the well-being of borrowers over financial interests. The student loan system should be about more than just revenue generation — it should be about supporting borrowers and ensuring that they can achieve financial freedom, not be left trapped in a cycle of debt and frustration. Without proper management, this new era of student loan servicing risks deepening the crisis for millions of Americans who are already struggling to keep up with their education-related debts.