The Misleading Myth of the College Premium

For decades, the so-called college premium—the idea that earning a college degree guarantees significantly higher lifetime earnings compared to a high school diploma—has been used to sell higher education to the American public. Politicians, economists, and university marketing teams alike have touted the promise of upward mobility through higher education. But this narrative is increasingly misleading, especially for working-class, first-generation, and marginalized students.

The College Premium: Averages vs. Reality

At its core, the college premium is based on averages. Federal and private data sources often claim that college graduates earn, on average, $1 million more over their lifetimes than those with only a high school diploma. But averages conceal enormous variation. They ignore who goes to college, where they go, what they study, and how much they borrow to get there.

That $1 million premium is skewed by high earners—doctors, lawyers, engineers, and business executives who often come from wealthier families and attend elite institutions. Meanwhile, a large and growing number of students graduate with low-paying degrees, insurmountable debt, and job prospects that resemble those of high school graduates from decades past.

Who Gets Misled—and Hurt

Students from working-class backgrounds often attend less selective colleges and universities—regional public schools, underfunded community colleges, or even predatory for-profit institutions. These students are more likely to work while enrolled, take longer to graduate, or drop out altogether. The result: little to no earnings gain, but significant debt burdens. For them, the college premium is often negative.

Systemic racism in the labor market erodes the supposed premium for Black and Latino graduates. According to the Economic Policy Institute, Black college graduates earn roughly 20% less than white peers with the same degrees. They also face higher unemployment rates, especially in economic downturns. When combined with higher average debt loads, the risk-to-reward ratio becomes starkly inequitable.

Not all degrees yield high returns. Many students major in education, social work, or the arts—not because these fields are unworthy, but because they are essential to society. Yet these professions are often undervalued and underpaid. Graduates may find themselves stuck with large student loans and salaries that barely cover basic living expenses. In these cases, the premium barely materializes.

Roughly 40% of college students in the U.S. fail to graduate within six years. These students take on debt but receive none of the (alleged) earnings boost associated with a degree. They are the most vulnerable population—often saddled with loans they can't discharge in bankruptcy and credentials that offer no labor market value.

A Shifting Landscape

The labor market has changed dramatically. Credential inflation means more jobs require degrees without necessarily offering higher pay. Meanwhile, automation, outsourcing, and gig work have made many once-stable jobs insecure. A bachelor’s degree is no longer the ticket to the middle class that it once was, especially for those without access to elite networks and institutions.

At the same time, the cost of college has skyrocketed. Student loan debt now tops $1.7 trillion, and repayment burdens are keeping young adults from buying homes, saving for retirement, or starting families. The financial risks of college now rival the benefits, especially for the very populations who are promised it will change their lives.

Toward a More Honest Conversation

Rather than clinging to the college premium as a universal truth, policymakers, educators, and the public must grapple with its limits. We need transparent data on outcomes by institution, major, race, and income. We must invest in alternative pathways, including apprenticeships, vocational training, and debt-free community college. We must hold bad actors accountable, including for-profit colleges and institutions with high debt-to-earnings ratios. And we must stop blaming individuals for “bad choices” when the system itself is rigged to benefit the privileged few.

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The Higher Education Inquirer will continue to investigate and report on the disparities, disinformation, and systemic failures within U.S. higher education—because transparency and justice matter more than mythology.

New Jersey Austerity Plan Means $400M Less for Higher Education

New Jersey’s tradition of expanding access to higher education may be facing a serious setback. Governor Phil Murphy’s proposed budget for Fiscal Year 2026 outlines sweeping cuts to the state’s higher education funding, drawing concern from students, educators, and policy advocates alike. The proposal, now under review by the state legislature, slashes hundreds of millions of dollars from public colleges and universities and threatens critical student aid programs.

Among the most notable cuts is an 18% reduction to the Community College Opportunity Grant (CCOG)—a cornerstone of New Jersey’s free community college initiative. The CCOG has helped thousands of lower- and middle-income students attend school tuition-free. If enacted, the cut would strip away aid for approximately 6,000 students, disproportionately impacting first-generation college-goers and working-class families already struggling with rising living costs.

Equally alarming is the proposed elimination of the Summer Tuition Aid Grant (TAG) program. The $20 million program served around 13,000 students in FY 2025, providing essential aid to help them catch up or get ahead during the summer term. Without these funds, students may be forced to delay graduation or take on more debt—if they remain enrolled at all.

Beyond specific aid programs, the broader picture is bleak: the FY 2026 budget calls for a $400 million cut in total higher education funding, a 16.1% decrease that would reverberate across the state’s public four-year institutions and community colleges. This reduction threatens not only academic programs but also critical student services such as mental health support, tutoring, and career counseling.

Advocates warn these cuts could lead to tuition hikes, faculty and staff layoffs, and increased class sizes, undermining the quality and accessibility of public education. The ripple effects would be especially harsh for students from marginalized communities—those already bearing the brunt of economic and racial inequality.

The proposed budget arrives at a time when many families are still recovering from the economic aftershocks of the pandemic, inflation, and student loan resumption. Critics argue that now is the time to double down on investment in higher education, not pull back. Doing so, they say, would not only help individuals thrive but also boost the state’s long-term economic competitiveness.

As of June 9, 2025, the proposal remains under debate in the state legislature. Lawmakers have the opportunity to revise and restore funding before the budget is finalized. Until then, tens of thousands of New Jersey students are left in a state of uncertainty—wondering whether they can afford to stay in school, finish their degrees, or even dream of college in the first place.

The Higher Education Inquirer will continue monitoring the budget process and reporting on its implications for students, educators, and the future of public higher education in the Garden State.

Liberty University Online: Master’s Degree Debt Factory

Liberty University, one of the largest Christian universities in the United States, has built an educational empire by promoting conservative values and offering flexible online degree programs to hundreds of thousands of students. But behind the pious branding and patriotic marketing lies a troubling pattern: Liberty University Online has become a master’s degree debt factory, churning out credentials of questionable value while generating billions in student loan debt.

From Moral Majority to Mass Marketing

Founded in 1971 by televangelist Jerry Falwell Sr., Liberty University was created to train “Champions for Christ.” In the 2000s, the school found new life through online education, transforming from a small evangelical college into a mega-university with nearly 95,000 online students, the vast majority of them enrolled in nontraditional and graduate programs.

By leveraging aggressive digital marketing, religious appeals, and promises of career advancement, Liberty has positioned itself as a go-to destination for working adults and military veterans seeking master's degrees. But this rapid expansion has not come without costs — especially for the students who enroll.

A For-Profit Model in Nonprofit Clothing

Though technically a nonprofit, Liberty University operates with many of the same profit-driven incentives as for-profit colleges. Its online programs generate massive revenues — an estimated $1 billion annually — thanks in large part to federal student aid programs. Students are encouraged to take on loans to pay for master’s degrees in education, counseling, business, and theology, among other fields. Many of these programs are offered in accelerated formats that cater to working adults but often lack the rigor, support, or job placement outcomes associated with traditional graduate schools.

Federal data shows that many Liberty students, especially graduate students, take on substantial debt. According to the U.S. Department of Education’s College Scorecard, the median graduate student debt at Liberty can range from $40,000 to more than $70,000, depending on the program. Meanwhile, the return on investment is often dubious, with low median earnings and high rates of student loan forbearance or default.

Exploiting Faith and Patriotism

Liberty’s marketing strategy is finely tuned to appeal to Christian conservatives, homeschoolers, veterans, and working parents. By framing education as a moral and patriotic duty, Liberty convinces students that enrolling in an online master’s program is both a personal and spiritual investment. Testimonials of “calling” and “purpose” are common, but the financial realities can be harsh.

Many students report feeling misled by promises of job readiness or licensure, especially in education and counseling fields, where state licensing requirements can differ dramatically from what Liberty prepares students for. Others cite inadequate academic support and difficulties transferring credits.

 The university spends heavily on recruitment and retention, often at the expense of student services and academic quality.

Lack of Oversight and Accountability

Liberty University benefits from minimal federal scrutiny compared to for-profit schools, largely because of its nonprofit status and political connections. The institution maintains close ties to conservative lawmakers and was a vocal supporter of the Trump administration, which rolled back regulations on higher education accountability.

Despite a series of internal scandals — including financial mismanagement, sexual misconduct cover-ups, and leadership instability following the resignation of Jerry Falwell Jr. — Liberty has continued to expand its online presence. Its graduate programs, particularly in education and counseling, remain cash cows that draw in federal loan dollars with few checks on student outcomes.

A Cautionary Tale in Christian Capitalism

The story of Liberty University Online is not just about one school. It reflects a broader trend in American higher education: the merging of religion, capitalism, and credential inflation. As more employers demand advanced degrees for mid-level jobs, and as traditional institutions struggle to adapt, schools like Liberty have seized the opportunity to market hope — even if it comes at a high cost.

For students of faith seeking upward mobility, Liberty promises a path to both spiritual and professional fulfillment. But for many, the result is a diploma accompanied by tens of thousands in debt and limited economic return. The moral reckoning may not be just for Liberty University, but for the policymakers and accreditors who continue to enable this lucrative cycle of debt and disillusionment.

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The Higher Education Inquirer will continue to investigate Liberty University Online and similar institutions as part of our ongoing series on higher education debt, inequality, and regulatory failure.

TOMORROW 7 PM ET—join our emergency organizing call! (Brandon Herrera, Student Borrower Protection Center)

Tomorrow (June 5) at 7PM ET, join us, Senator Elizabeth Warren, AFT President Randi Weingarten, and more for an emergency organizing call to learn about the harms of the House-passed reconciliation bill and how YOU can stand up for student loan borrowers. RSVP Here! This bill threatens to gut $350 BILLION in critical education programs to deliver $4.5 TRILLION in tax cuts to billionaires. House Republicans’ plan to slash the Pell Grant and other financial aid programs and eliminate basic protections for students—this will only make college more expensive and force millions of working families with student debt further into the red. So far, we have nearly 1,000 (!) RSVPs from all over the country planning to take part in this call. We will hear from policymakers, movement leaders, and affected students and borrowers on how this bill will harm our communities and how you can get more involved to protect students and working families—NOT billionaires. You won’t want to miss this—make sure to RSVP below and clear your calendar for TOMORROW at 7PM ET. Join the Emergency Organizing Call See you there, Brandon Herrera Communications and Digital Strategist Student Borrower Protection Center

The Market Myth in Higher Education: A Critical Look at Richard Vedder's Let Colleges Fail

In Let Colleges Fail: The Power of Creative Destruction in Higher Education, economist Richard Vedder calls for higher education to be subjected to the harsh discipline of the free market. He argues that many colleges are bloated, inefficient, and obsolete—and that the solution is to allow market forces to “creatively destroy” them. In his view, less federal support, more privatization, and greater competition will fix what ails American higher education.

But Vedder’s market fundamentalism ignores the real-world consequences of such policies—and conveniently sidesteps decades of evidence showing that when markets fail, it's working people who bear the costs, not the powerful.

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For-Profit Colleges: A Market-Based Disaster

If we want a glimpse into what happens when market logic is unleashed on education, we need only look at the for-profit college sector. For-profit institutions like Corinthian Colleges, ITT Tech, and Education Management Corporation were poster children for market efficiency—until they collapsed under the weight of scandal, fraud, and student exploitation. These schools often charged high tuition for low-quality programs, aggressively marketed to vulnerable populations, and left students saddled with debt and worthless credentials.

Taxpayers ultimately footed the bill through federal student loan programs, while executives walked away with millions. And even now, many for-profit schools continue to operate under new names or private equity ownership, still profiting off federal aid with minimal oversight. If Vedder truly believed in letting failures die, he would have demanded their immediate closure and repayment to the public. Instead, many market advocates stayed silent—or worse, defended them as “innovative.”

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Market Hypocrisy: Bailouts for Banks, Austerity for Schools

Vedder's vision also suffers from historical amnesia. During the 2008 financial crisis, the same economists and think tanks who champion “creative destruction” for universities were demanding massive bailouts for Wall Street. The federal government ultimately handed out hundreds of billions of dollars to prop up failing banks, insurers, and automakers—because letting them fail would supposedly destroy the economy.

So why is it that banks and corporations get bailouts, but working-class students and struggling public colleges are told to sink or swim? Why is failure noble when it happens to a rural community college, but catastrophic when it threatens JPMorgan Chase?

The truth is, markets aren’t neutral. They reflect and reinforce existing power structures. And in higher education, unregulated markets have consistently failed to protect students or serve the public good.

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The Real Role of Public Investment

Higher education, like health care or clean water, is a public good. It creates informed citizens, social mobility, and innovation. But it requires thoughtful public investment, not just price signals and profit motives.

Rather than letting colleges fail, we should be asking why so many institutions—especially public and minority-serving colleges—are underfunded to begin with. We should be talking about reining in administrative bloat and student loan profiteering, yes—but also about restoring federal and state funding, enforcing accountability on predatory institutions, and protecting academic programs that serve more than just labor market demands.

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Conclusion

Vedder’s Let Colleges Fail is a provocative title, but it’s based on a tired and dangerous premise: that markets always know best. The history of for-profit education, the hypocrisy of corporate bailouts, and the lived experience of millions of indebted students tell a very different story. The solution to the crisis in higher education isn’t to let institutions fail—it’s to build a system that prioritizes public responsibility over private gain.

Delinquent and Disillusioned: The Student Loan Crisis Reignites Amid Economic and Policy Failures

Millions of student loan borrowers in the United States are falling behind on payments now that the COVID-era federal loan pause has ended—and the economic and personal consequences are mounting fast. The recent Wall Street Journal article “Millions of Americans Had Their Student-Loan Payments Put on Pause During the Pandemic. Now They Are Back on the Hook Again” paints a sobering picture of what happens when borrowers, many already living paycheck-to-paycheck, are reinserted into a punitive debt system with little warning or preparation.

According to the WSJ report, 5.6 million borrowers were marked newly delinquent in just the first quarter of 2025, as credit reporting resumed and wage garnishment letters started showing up in mailboxes. Delinquency rates surged from 0.7% to 8%, returning to pre-pandemic levels with alarming speed. While this may be a statistical “reversion to the mean” in economic terms, for those affected, it's a hard shock that could derail financial stability for years to come.

A System Ill-Equipped for Restart

The Biden administration’s temporary on-ramp expired in the fall of 2023. Since then, servicers, borrowers, and regulators have all struggled with the logistical and psychological whiplash of rebooting a system that had been on hold for over three years. Meanwhile, the Trump administration—eager to reassert austerity and fiscal discipline—has resumed the aggressive collections practices that defined the pre-pandemic era: wage garnishments, tax refund seizures, and Social Security offsets.

For millions, this reactivation has not come with transparency or support. Many received letters from unfamiliar loan servicers, the result of reshuffling in the student loan servicing industry during the pandemic. As University of Cambridge economist Constantine Yannelis told WSJ, borrowers who graduated during the payment pause may not have ever experienced repayment, and are now blindsided by bureaucratic demands and crumbling credit.

Credit Collapse and Economic Spillover

Among the most concerning revelations: borrowers with once-strong credit profiles are being dragged down. Nearly 2.4 million people with near-prime or prime credit ratings experienced sharp score declines—up to 177 points for those with scores over 720. That drop could shut borrowers out of mortgages, car loans, and even rental opportunities, extending the economic pain well beyond student debt.

Morgan Stanley economists warn that monthly student loan payments will rise by $1 billion to $3 billion, potentially shaving 0.1 percentage point from the 2025 U.S. GDP. While modest at the macroeconomic level, that drop represents hundreds of thousands of families tightening budgets, delaying major purchases, or skipping payments on other essentials.

And the demographic picture of who is struggling directly refutes tired stereotypes. University of Chicago economist Lesley Turner emphasized that those falling behind are not entitled Ivy League grads but disproportionately working-class Americans—especially those who attended for-profit or two-year colleges, or dropped out before earning a degree. Mississippi, where 45% of borrowers are delinquent, stands out as a cautionary tale in both poverty and policy failure.

A Fractured Policy Landscape

What’s happening now is not just a predictable economic phenomenon—it’s the result of a fractured and politically volatile policy environment. Biden’s efforts to implement broad debt relief through the SAVE plan and other targeted forgiveness efforts have been challenged in court and undermined by executive overreach claims. That legal uncertainty left many borrowers falsely optimistic that repayment would be permanently suspended or forgiven, influencing their financial planning.

Meanwhile, the ideological pendulum continues to swing: progressive reforms like income-driven repayment and borrower defense to repayment have been inconsistently applied, undercut by administrative churn and legal ambiguity. Now, under a returning Trump administration, the Department of Education is once again prioritizing collections over compassion.

What Happens Next?

There’s no clear trajectory forward. As Duke economist Michael Dinerstein noted, the path could go in either direction. If borrowers respond to delinquency warnings and enter into income-driven repayment (IDR) plans like SAVE, we may see stabilization. But without real outreach, forgiveness, or structural reform, millions more may default—and carry the economic scars for decades.

At the Higher Education Inquirer, we see this moment as a pivotal test—not just of financial resilience, but of our society’s willingness to reckon with an education system that has long promised mobility while delivering debt. The student loan system was broken before COVID. The pause merely masked the underlying rot. Now, with repayments back in motion, the cracks are widening into chasms.

If the U.S. is serious about building a stable middle class, supporting higher education access, and ensuring economic mobility, it must move beyond temporary pauses and court-contested forgiveness. We need durable reform, not debt servitude masquerading as opportunity. Until then, millions of Americans will remain caught in the crossfire between broken promises and broken policies.

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For ongoing investigations into student debt, contingent labor, and the collapse of trust in U.S. higher education, follow the Higher Education Inquirer. 

The Higher Education Racket

 "Every great cause begins as a movement, becomes a business, and turns into a racket." Eric Hoffer

American higher education, once a ladder to opportunity, has become a vast machine of wealth extraction. Debt burdens students for decades. Professors and campus workers are trapped in precarious jobs. Entire communities are pushed out by campus expansions. And a select few elite universities sit atop fortunes that rival hedge funds—all while claiming tax-exempt status and public goodwill.

This is the higher education racket: a sector that has turned away from its public mission and now operates with the logic of capital accumulation, enabled by deregulation, political influence, and privatization.

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From Movement to Market: Postwar Expansion and Privatization

The 1944 G.I. Bill launched a golden age of public higher education, providing veterans access to tuition-free college and transforming American society. Enrollment surged, inequality shrank, and community colleges became lifelines for working-class students. Colleges were seen as civic institutions, essential to democratic life.

That vision began to erode in the 1980s, as neoliberal policymakers slashed state funding, forcing institutions to raise tuition, court corporate donors, and cut labor costs. By 2020, public universities received less than half the state funding (per student) they did in 1980, adjusted for inflation (Center on Budget and Policy Priorities).

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Trump Administration: Deregulating the Racket

Under Donald Trump, the Department of Education, led by billionaire Betsy DeVos, launched an all-out campaign to roll back protections for students and favor the worst actors in higher ed:

• Gutted Borrower Defense rules, making it harder for defrauded students to cancel loans.

• Eliminated the Gainful Employment rule, allowing for-profit colleges to peddle useless degrees.

• Weakened accreditors' oversight, enabling bad schools to access federal aid with little accountability.

• Backed anti-union efforts, including trying to strip grad students at private universities of their employee status.

This deregulatory spree enriched predatory schools, student loan servicers, and debt collectors—while stripping students and workers of protections.

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The Academic Underclass

While university presidents earn seven-figure salaries, and campuses build luxury dorms and biotech labs, the people doing the teaching are increasingly disposable. More than 70% of college faculty now work off the tenure track, many as adjuncts earning below minimum wage on a per-course basis (AAUP).

Campus workers—grad students, maintenance staff, food service employees—are organizing for better wages and benefits, but often face union-busting tactics. From Columbia to the University of California, administrators stall negotiations and outsource labor to avoid union contracts (The Guardian, 2022).

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Universities as Urban Developers

Historian Davarian Baldwin has documented how universities function as engines of gentrification in cities like New Haven, Chicago, and Philadelphia. In In the Shadow of the Ivory Tower, Baldwin argues that universities have become "shadow governments", gobbling up real estate, policing their neighborhoods, and reshaping urban economies—all without democratic accountability.

These “anchor institutions” claim to uplift communities, but their expansion often displaces low-income Black and brown residents, raises housing costs, and erodes the local tax base—since universities are typically exempt from property taxes.

“Higher education is not just about learning anymore. It’s about real estate, policing, health care, and urban planning—all under the control of tax-exempt institutions.” —Davarian Baldwin

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Endowment Empires

Nowhere is the inequality of U.S. higher education more glaring than in university endowments. Harvard, Yale, Stanford, and Princeton each have endowments exceeding $30 billion, managed like hedge funds with investments in private equity, real estate, and offshore accounts (NACUBO 2023 Endowment Study).

Despite their wealth:

• These universities often provide limited financial aid to working-class students.

• They pay no federal taxes on endowment income under $500,000 per student.

• They resist efforts to contribute to municipal budgets, even as they consume city resources.

During the COVID-19 pandemic, many elite institutions furloughed workers and froze wages—despite posting strong investment returns and sitting on endowments worth more than the GDP of some nations.

Critics argue that these funds should be tapped for student debt relief, housing support, or public education reinvestment—not hoarded like private wealth.

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The Price of the Racket

The numbers are staggering:

• $1.7 trillion in student debt

• Tens of thousands of adjuncts living in poverty

• Campus police forces more militarized than local law enforcement

• Communities displaced by campus-led gentrification

• Universities with endowments larger than some countries' national budgets

The higher education racket isn’t just an economic problem. It’s a betrayal of public trust.

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Reclaiming the Public Good

If higher education is to serve the people—not private interests—structural reforms are necessary:

• Cancel student debt and offer tuition-free public college

• Mandate living wages and fair contracts for all campus workers

• Tax large endowments and require community reinvestment

• Reinstate regulations to hold predatory institutions accountable

Higher education once expanded opportunity. It can again—but only if we dismantle the racket.

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Sources:

• Baldwin, Davarian L. In the Shadow of the Ivory Tower (Bold Type Books, 2021)

• AAUP – Contingent Faculty Data

• NACUBO – 2023 Endowment Study

• The Guardian – University Union-Busting

• NPR – DeVos Deregulation

• Center on Budget and Policy Priorities – State Funding Cuts

• College Board – Trends in Tuition

The Watchdogs of Higher Education: Journalists Covering the College Meltdown

In an era of propaganda, PR masquerading as reporting, and shrinking newsroom budgets, a small cohort of journalists continues to ask the difficult questions about U.S. higher education. These writers are the watchdogs, skeptics, and truth-tellers who probe the system's contradictions—exposing corruption, inequality, and the commodification of learning.

While many mainstream outlets have reduced their education desks or opted for click-friendly content, these journalists persist in a more thankless task: investigating the deeper structures that shape college access, affordability, and legitimacy. Their work is essential in this Digital Dark Age, where universities are marketed like tech products and student debt chains millions to futures they did not choose.

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Current Watchdogs

• Josh Moody (Inside Higher Ed)
  Steady and detail-oriented, Moody explores enrollment cliffs, closures, and the survival of regional public colleges.

• Natalie Schwartz (Higher Ed Dive)
  A sharp analyst of the robocollege sector, Schwartz highlights OPM contracts, predatory recruitment, and accountability gaps.

• Michael Vasquez (The Chronicle)
  Known for hard-hitting investigations into for-profit schemes and enrollment deceptions.

• Stephanie Saul (The New York Times)
  Tackles elite admissions, racial bias, and the mechanisms of legacy advantage.

• Chris Quintana (USA Today)
  Examines the hidden costs of student debt, accreditation breakdowns, and federal oversight failure.

• Derek Newton (Forbes)
  Unflinching in his critiques of online education scams, weak accreditation, and credential inflation.

• David Halperin (Republic Report)
  Legal-minded and relentless, Halperin holds the Department of Education and the for-profit lobby to account.

• Jon Marcus (Hechinger Report / NPR / The Atlantic)
  A veteran storyteller who humanizes systemic crises—affordability, public disinvestment, and policy drift.

• Rick Seltzer (Chronicle of Higher Education)
  A seasoned reporter, Seltzer has focused on the intersection of state and federal policy, accreditation issues, and the financialization of higher education. His investigative pieces often highlight how policy shifts impact institutions serving the most vulnerable students, particularly in the community college sector. Seltzer’s ability to distill complex policy changes into accessible reporting has made him an essential voice in higher ed journalism.

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Those Who’ve Left the Beat (But Not Forgotten)

• Eric Kelderman (formerly The Chronicle of Higher Education)
  Kelderman offered deeply researched policy analysis and was one of the few who bridged the world of federal education policy and on-the-ground campus effects. His departure leaves a vacuum in longform institutional memory.

• Katherine Mangan (formerly The Chronicle)
  Known for profiling marginalized students and faculty, Mangan brought empathy and nuance to her reporting. Her stories exposed how abstract policies hit real people—and her absence is deeply felt.

• Jesse Singal (formerly The Chronicle / NY Mag)
  Though now better known for controversial takes in broader cultural debates, Singal once wrote incisively about the psychology of higher ed policy and the unproven assumptions behind new academic models.

• Paul Fain (formerly Inside Higher Ed)
  A go-to source for OPMs and workforce ed, Fain had a unique grasp of the tension between labor markets and academic missions. He now writes the The Job newsletter for Work Shift, with a narrower focus.

• Kelly Field (formerly The Chronicle / freelance)
  Field’s reporting on federal financial aid and for-profit lobbying was some of the most thorough in the industry. Her exit reflects a broader trend: that deeply informed journalists are often priced or pushed out.

• Goldie Blumenstyk (semi-retired, The Chronicle)
  A longtime chronicler of innovation narratives and public-private partnerships, Blumenstyk now writes occasionally but is no longer on the frontlines. Her absence from regular coverage marks the end of an era.

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Why This Matters

Many of these journalists left not because they lost interest—but because media economics, editorial shifts, or burnout drove them out. The result? Fewer people holding institutions accountable. Fewer watchdogs sniffing out robocollege fraud. Fewer investigations into how DEI is dismantled under political pressure. Less public understanding of how tens of millions became student loan serfs.

In their absence, we see the rise of sponsored content, consultant-driven “thought leadership,” and university propaganda dressed as reporting.

At The Higher Education Inquirer, we believe journalism is not just about reporting the news—it’s about building public memory and resisting amnesia. That’s what these current and former reporters have done. And that’s why we honor both those still in the trenches and those who left with their integrity intact.

If this is truly the Digital Dark Age, then we owe everything to those who kept the lights on—even if only for a while.

A Growing Crisis: Student Loan Delinquency Surges After Pandemic Pause

After a five-year pandemic-related pause in federal student loan repayment and a temporary grace period, the student debt crisis has returned—arguably more severe than ever. According to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, nearly six million student loan borrowers—or 13.7 percent—are now seriously delinquent or in default on their loans. Even more troubling, nearly one in four borrowers required to make payments are behind, a figure masked by millions of others who remain in deferment, forbearance, or income-driven repayment plans requiring no immediate payment.

This dramatic increase in delinquency stems from the expiration of the federal "on-ramp" policy in October 2024, which had temporarily shielded missed payments from credit reporting after the repayment pause ended in September 2023. Now that reporting has resumed, the financial and personal consequences for borrowers are quickly becoming evident.

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Delinquency by the Numbers

The NY Fed’s report reveals that while the total number of student loan borrowers has slightly decreased since 2020—from 44.6 million to 43.7 million—the number of borrowers behind on their payments is nearly the same. More striking is the conditional borrower delinquency rate—which excludes those without a current payment due. Among borrowers required to pay, 23.7 percent are delinquent, a reflection of a deepening affordability crisis and repayment system that continues to fail millions.

The burden is not equally distributed across the country. The highest rates of delinquency are concentrated in the South, with Mississippi leading at 44.6 percent, followed by Alabama, West Virginia, Kentucky, Oklahoma, Arkansas, and Louisiana—all states where more than 30 percent of borrowers with payments due are behind. In contrast, states like Illinois, Massachusetts, and Connecticut have delinquency rates under 15 percent.

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An Aging, Struggling Borrower Base

Another notable shift is the aging of the delinquent borrower population. Delinquency is no longer confined to young graduates just entering repayment. Borrowers over age 40 now make up a significant portion of those falling behind, with more than one in four of these borrowers delinquent. The average age of a delinquent borrower rose from 38.6 in 2020 to 40.4 in 2025.

This is consistent with what higher education watchdogs have long observed: student loan debt is no longer just a young adult issue. Millions of older Americans—many of them parents who borrowed for their children or who returned to school later in life—are now in financial jeopardy.

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Credit Damage and Economic Consequences

The return of delinquency has immediate and potentially devastating impacts on borrowers’ credit health. Over 2.2 million borrowers saw their credit scores drop by more than 100 points in the first quarter of 2025. Over one million borrowers suffered drops of 150 points or more.

Of those who became newly delinquent, nearly 44 percent had credit scores above 620 before missing payments—scores that typically qualify for auto loans, mortgages, and credit cards. These borrowers now face steeply increased borrowing costs or total exclusion from credit markets, potentially compromising their ability to secure housing, transportation, and even employment in some cases.

The cascading effects of damaged credit and rising debt may not be limited to student loans. The NY Fed warns that it remains to be seen whether delinquencies will spill over into defaults in other types of debt. This is especially concerning in a macroeconomic environment marked by high interest rates and increasing cost-of-living pressures.

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Punitive Collections Resume

Adding to the pressure, federal collections have resumed. The U.S. Department of Education, working with the U.S. Treasury, began collecting on defaulted loans in May 2025, including garnishing wages, tax refunds, and Social Security payments. These harsh penalties, halted during the pandemic, are now back in full force—often hitting borrowers already in financial distress.

Millions of borrowers who once benefited from temporary protections now face permanent financial consequences, not only through collection actions but also through long-term credit damage.

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A System Under Strain

The resurgence in student loan delinquency reflects not only the impact of resumed repayment but deeper systemic flaws in the American higher education and student loan systems. Despite well-publicized attempts at cancellation and reform, tens of millions remain trapped in a system that is neither affordable nor forgiving.

While much political attention has been directed toward one-time cancellation efforts and income-driven repayment plans, the growing delinquency rates suggest those efforts have not gone far enough—or fast enough. Borrowers in states with the highest delinquency rates tend to have lower incomes and fewer resources to navigate complex federal repayment options.

Without bold and comprehensive reform—including principal reduction, easier access to cancellation, and a robust safety net for vulnerable borrowers—millions of Americans will continue to suffer the consequences of educational debt they were told was an investment in their future.

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The Higher Education Inquirer’s View

We see this resurgence in delinquency not simply as a data point, but as a clear warning. The Biden administration’s incremental reforms and the Supreme Court’s rebuke of broader cancellation efforts have left the most financially vulnerable exposed.

As wage garnishment resumes and credit scores plummet, student loan debt is quickly becoming a national emergency—especially for Black borrowers, older Americans, and those in the South and Midwest. These are not isolated failures. They are structural, policy-driven failures—decades in the making.

For the U.S. to truly address its student loan crisis, it must go beyond payment pauses and cosmetic fixes. It must confront the predatory aspects of its higher education financing system, the ballooning cost of college, and the promise that higher education is a guaranteed path to prosperity.

Until then, expect these numbers—and the pain behind them—to grow.

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Sources:

• Federal Reserve Bank of New York, Quarterly Report on Household Debt and Credit, Q1 2025

• New York Fed Center for Microeconomic Data Blog

• Equifax Consumer Credit Panel data

Having trouble keeping up with the chaos of the student loan system? (Student Borrower Protection Center)

 

Are you having trouble keeping up with the chaos of the student loan system? Don’t worry; we got you. There’s a lot going on right now and we’re here to break it all down. Here are some of the most pressing things that happened this week. On Tuesday, Senator Patty Murray (D-WA), the Ranking Member of the U.S. Senate Appropriations Committee and senior member of the Senate Health, Education, Labor and Pensions (HELP) Committee chaired an education forum to spotlight the Trump Administration’s radical effort to dismantle the U.S. Department of Education (ED). Tasha Berkhalter, a U.S. Army veteran and student loan borrower who had her debt discharged by the Biden Administration after being defrauded by a predatory for-profit college, gave powerful testimony at the hearing.

Watch Tasha’s testimony here:

The Trump Administration announced a couple of weeks ago that it would begin collections on student loans for the first time in five years, beginning this Monday, May 5. ED started sending borrowers emails this week to let them know that the Treasury Offset Program—which lets them take tax refunds and federal benefits like Social Security—was starting. ED said administrative wage garnishment is expected to resume later in the summer. There are currently 5.5 million federal student loan borrowers in default who should be receiving this email, and another 8 million delinquent folks who could face these consequences later this summer. If you are currently in default and unsure of what to do, check out this great resource from the National Consumer Law Center. Our Deputy Executive Director Persis Yu was featured on both PBS News Hour and CBS Mornings this week to explain what is happening.  Watch Persis on PBS here:   On Monday, we submitted a comment letter to oppose the Trump Administration's efforts to implement its Project 2025 agenda through a process called negotiated rulemaking (Neg Reg). The Trump Administration is threatening a massive overhaul of the student loan safety net, including the Public Service Loan Forgiveness (PSLF) program and affordable repayment options. 184 organizations joined SBPC and Democracy Forward in signing on to the letter. These organizations will keep fighting on behalf of borrowers!

ICYMI, here is a roundup of other coverage this week: SBPC Executive Director Mike Pierce broke down the restart of collections on defaulted borrowers with Danielle Douglas-Gabriel of The Washington Post on NPR's 1A. He also spoke with KCAL News, The Associated Press, Investigate TV, and more! SBPC Counsel Khandice Lofton spoke on CBS News about the struggles of borrowers right now. SBPC Policy Director Aissa Canchola Bañez discussed on NPR’s Morning Edition how collections will, in particular, harm older borrowers. She also spoke with LAist about PSLF and The Hill about the House Republicans’ budget reconciliation bill, and answered borrowers' questions on ABC7. SBPC Legal Director Winston Berkman-Breen was featured in The New York Times commenting on the chaos borrowers are facing right now. He also spoke with Gray Media about this.

Hang in there, Amy Czulada Outreach & Advocacy Manager Student Borrower Protection Center