Heritage Foundation's 2025 "Mandate for Leadership" Presents Trump Playbook for Privatizing US Education and Reducing Oversight

The Heritage Foundation's 2025 Mandate for Leadership details what the next Trump Administration has in store for US higher education. The Education section starts on page 319. 

The Mandate was created by an army of writers and policy people, and it is approved by at least 100 conservative groups, including Liberty University and Turning Point USA.   

The authors include former Trump Chief of Staff Mark Meadows as senior partner; the Center for Renewing America led by former Trump-appointee Office of Management and Budget Director Russell Vought; and America First Legal, led by former Trump Senior Advisor Stephen Miller.

While one major goal is to eliminate the US Department of Education, there are many other privatization schemes in the works--shifting powers to the corporate world (and corporate greed) and providing minimal federal oversight. 

These schemes would also reduce oversight of K-12 education, colleges, and student loans. Since the federal government funds a great deal of state-level bureaucracy, these measures would also reduce oversight at the state level. 

It is possible many of these disruptive policies could be employed without Congressional approval. 

This document is more than rhetoric. Republicans have been diligently planning on hiring 20,000 people to help carry these ideas out.  

Even if only partially realized, the Mandate has consequences that could last for generations, further dividing the nation by race and class--and making the nation vulnerable to foreign adversaries.  

Education Department Needs Stronger Rules for Accreditors (David Halperin, Republic Report)

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

I’m scheduled to offer a brief public comment at today’s session of the Department of Education’s negotiating rulemaking meetings, where representatives of various higher education constituencies have come together to debate new proposed regulations governing issues including distance education, state government authorization of schools, and standards for the private accrediting bodies that oversee schools.  My comment will address accreditation, and this is what I plan to say:

Many students say a school’s status as accredited, and resulting seal of approval and aid from the Department, are the reason they enrolled. Because accreditors are gatekeepers for federal aid, their oversight is critical to prevent students and taxpayers from getting ripped off by poor quality, overpriced schools.

So it’s good that the Department has started to incorporate concerns about bad behaving schools in its reviews of accreditors, starting with ACICS, which accredited some of the worst.

But ACCSC also has tolerated years of abuses – at CEHE, Vatterot, and elsewhere. Data shows many ACCSC schools have left students worse off than when they started.  

SACS has permitted blatant abuses at Keiser University. WASC has allowed misconduct at Ashford. COE at Florida Career College.

The Department has started to ask those accreditors questions. But, under current rules, it hasn’t taken firm action, and predatory behavior is ongoing.

The rules also have done little to address rampant abuses at schools overseen by Higher Learning Commission.

HLC has long tolerated predatory conduct at Walden, DeVry, EDMC, Kaplan, Ashford, Grand Canyon, University of Phoenix, and the Perdoceo schools. 

Perdoceo in recent years paid 500 million dollars to settle with 48 states and 30 million to settle with the FTC over deceptive practices. Numerous Perdoceo employees have told the Department that company recruiters continue to make misleading sales pitches. 

As to the University of Phoenix, in 2015 the Pentagon briefly banned it from recruiting service members based on evidence of violations. In 2019, Phoenix agreed to pay 191 million to resolve FTC charges it ran ads falsely suggesting ties to major employers. Last year Phoenix was again running deceptive ads, this time falsely implying it is a state school.

If Phoenix tells such brazen falsehoods in the open, imagine what its recruiters tell students one on one.  The school’s graduation rate is 14 percent. 

Many victims are low income. These schools should not be accredited. They should not get taxpayer dollars. But under current rules, the abuses continue. 

Last year HLC renewed accreditations of the University of Phoenix and Perdoceo’s Colorado Tech, each for a full 10 years.  

And the Department in turn renewed HLC for a full five years. 

The system isn’t working.

Accreditors have often failed as gatekeepers of integrity and quality. The proposed regulations are a start to fixing the problem.

Letter to Secretary of Education Miguel Cardona Regarding Borrower Defense to Repayment and Gainful Employment Regulation (Michael DiGiacomo)

Dear Secretary Cardona, Department of Education Staff, and Regulating officials,

My name is Michael DiGiacomo. I am a former student and victim of two closed for-profit scam colleges and the student loan industry. I have been fighting this industry since 2003-2006, when I realized I had been played badly by these deceptive debt factories. 

 

These "colleges," and others like them, were easily able to trick not just me, but many thousands of poor, first-time people into attending. The false promises of dream job placement stats and leads, fueled by the student loan industry's "College Students make A Million Dollars More" pitch, along with high pressure tactics, lack of financial understanding, and easy access to government funds made us all the prime target for these scamsters. 

 

They also piled on fraudulent private student loans as they worked hand-in-hand with commercial lenders to help themselves fleece the 90/10 requirement to gain more federal money funds. The promise of the future our parents and grandparents had was turned into a scam to fuel the next big bubble and wallets of those schools, the industry, and their lobbyists.  

Now, after having gone through this fight for almost 20 years, through the recruitment lies, joblessness, default, garnishment, depression, hopelessness, and the unknown, I have fought to have my federal student loans canceled as part of Sweet v Cardona [DEVOS] and the defense to repayment process. I am still miles away from relief. 

 

The paychecks, garnished for federal loan money by Sallie Mae-owned debt collectors for years, will never be returned as they somehow escape the parameters of the Sweet v Cardona [DEVOS] settlement. 

 

I spent years choosing between food or gas to get to work because federal student loan garnishments don't take those necessities into account when they rip away your paycheck. I have also not been refunded for years of payments made to the US Department of Education and Nelnet now that the federal loans have been closed in the settlement. 

 

My GI BILL even dried up/time ran out because I was too ruined financially and burned by those schools to want to finally return to ANY college again. Unfortunately, I am not alone on this. Over and over again I have heard the same stories. I have lost friends, have seen people alienate family, or even abandon our country. 

 

Now with Sweet v Cardona [DEVOS] class and post class members, I have heard that even with evidence, payments are not returned even though the loans are closed. I have seen servicers that are supposed to be helping class members [and post class] become whole pinball students away from them back to the department of education or others or give flat out incorrect information. 

 

And why does the class not cover federal loans held by Sallie Mae or other pre-Obamacare lenders? 

 

Why should the same corporate banks that helped the scamster schools be allowed to keep the funding? 

 

Why should the crooks be allowed to keep the robbery purse? 

 

Why is the process of getting a federal loan legally closed so hard?

 

Why is there no federal program in place to help with the predatory/fraudulent private student loans?

 

The processes for Defense to Repayment and the Gainful Employment regulations are hard to follow for someone as knowledgeable as myself about this, never mind a first time student or parent with no experience in the process. Clearly the "Colleges" aren't being honest in the first place to their customers, never mind slow regulators and watch dogs. 

 

I have watched the Student Aid website under serve people applying to defense to repayment they rightfully should be able to use. I have watched it only allow one school when they were hit by multiple. I have seen the website break or take minutes just to type the final name line. This is inexcusable since this is the one chance for people to make things right.  

The government guaranteed funding needs to be heavily protected on what schools get access to, and on the other side students need to be easily able to be made whole when it turns out there is systematic fraud. The fraudsters are faster than the government patches to fix it. 

 

Often when someone gets hit by one for-profit college, they get easily hit by a second one thinking the first was an isolated incident. 

 

I have watched this fight and have been part of it for too long to watch it happen all over again. Regulation needs to be strong on the part of protecting borrowers and easy for borrowers to be made whole. The promise of a government accredited college should be just that. It should not be just an arm of a corporate entity or allowed to be made "Not-for-profit" just because they worded it differently. 

 

The same corporate CEO's should not be trading companies and schools around like baseball cards or like whack a mole game once the one before it crashes down. Please put borrowers first if you want to have an educated society and protect them from corporate scamsters. And if somehow the scamsters DO get the upper-hand, please make it easier and more understandable for borrowers to get made whole.

 

When I joined the Army, I made a promise I would protect this country from all threats, foreign and domestic. The for-profit college and student loan industry is a domestic threat to this country and the public. They have decimated generations of prospective students and you still haven't fully picked up the pieces yet. 

 

Sincerely, Michael DiGiacomo

Veteran US Army

Victim of the New England Institute of Art aka "The Art Institutes" Aka Education Management Corporation

Victim of Katherine Gibbs aka Gibbs aka Sanford Brown aka Career Education Corporation

Victim of SallieMae aka USAFunds Aka Pioneer Credit Aka Navient

Trump 2024 and the Student Loan Portfolio

The US Department of Education (ED) handles the student loans of about 40 million US citizens, holding on to about $1.6 Trillion in debt--which is considered an asset to the US government.  And ED-FSA (Federal Student Aid) hires tens of thousands of workers, mostly contractors, to service the debt. But that could change in a few years. If Donald Trump is elected President.  

Under President Trump, debtors might expect that their loans to be transferred over to large corporations--at some point--with the sale being used to reduce the federal deficit, and to cut labor at ED. This would aid in the effort to eliminate the US Department of Education, as Trump has promised on the campaign trail.

Selling off the student loan debt portfolio may or may not require approval from anyone outside of the President. At least one study, by McKinsey & Company, has already been conducted regarding this possibility. 

In 2019, the Trump administration hired McKinsey to analyze the $1.5 trillion federal student loan portfolio. This analysis was part of a broader effort to explore options for managing the portfolio, including potentially selling off some of the debt. Results were never published. The analysis was conducted alongside a study by FI Consulting, which focused on the economic value of the portfolio, noting that the valuation could vary depending on future default rates, prepayment rates, and economic conditions.

The new owners of the sold off debt would most likely be big banks and other large companies, both domestic and foreign, that find value in the debt. There would be political and social resistance.  And many questions would need to be answered, in detail.

Would large banks or other large corporations be better stewards of the debt?

Would the bidding be transparent?  

Would consumers be able to challenge loan repayments or ask for forgiveness?  

What would happen to the contracts of the existing debt servicers?  

Will this expand the existing Student Loan Asset-Backed Securities market? 

Related link:

The Student Loan Mess Updated: Debt as a Form of Social Control and Political Action

Capital One-Discover Merger: Another Blow to the Educated Underclass

Capital One and Discover Financial Services have publicly announced plans to merge. The deal worth a reported $35B would give this new entity greater power, competing (or colluding) on a higher level with JP Morgan Chase, Visa, and Mastercard.  

For working people who know anything about finance and debt, and have debt themselves, this should be frightening. Together, both banks hold about 400 million credit cards.  

Capital One and Discover are both banks and high-interest credit card lenders. That means they are issued cheap money from the US Federal Reserve and lend it to naive and desperate consumers. 

Discover student loans are used by college students who have used up their Pell Grants and federal loans and are working (and borrowing) to graduate or extend their education. The interest rates can exceed 12 percent.  

Nelnet is the student loan servicer for Discover private student loans, but their $10.4 Billion portfolio is for sale.

Discover also bundles student loans and sells them as securities, student loan asset-backed securities or SLABS. Institutional investors, like retirement and investment funds, buy the debt up as stable investments.  

Capital One does not have student loans, but college students use credit cards from both of these companies to make their way through school, paying the price later. 

While there may be regulatory challenges for the Capital One-Discover deal, it's not likely that the merger, or any other financial consolidation, will be prevented--no matter how onerous it is to consumers.  

Related links:

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

One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

The Student Loan Mess Updated: Debt as a Form of Social Control and Political Action

SLABS: The Soylent Green of US Higher Education

Ambow Education Continues to School Naive Investors

The Higher Education Inquirer has been tracking Ambow Education (AMBO) for about two years.  Ambow Education is the owner of the NewSchool of Architecture and Design in San Diego (NSAD) and the former owner of Bay State College which closed in 2023. NSAD is facing serious accreditation issues.  The only other asset to speak of is an idea called HybriU, which may or may not be a real technology.  

Tomorrow, February 20, 2024, Ambow completes a 1-10 reverse stock split to pump up its stock price just enough to avoid delisting from the New York Stock Exchange (NYSE). The company, which until recently was based in Beijing, has a troubled history. At one time it was reportedly valued at $1 Billion. Today it's valued at about $9 million. The latest company headquarters is in a small, rented office space in Cupertino, California.  

What we saw in trading on Friday, one business day before the reverse stock split, was alarming: share volume was more than 280 times normal: 70 million shares versus a daily average of about a quarter million. The price more than doubled, from 12 cents a share to 30 cents at close. The highest price was 58 cents, almost five times the day's beginning price. What we were seeing was more than abnormal. Was it stock manipulation? We cannot say.  

HEI asked Ambow for a comment but they had no answer for this doubling in value in less than 24 hours and for any news of material change. We also reported the event to the US Securities and Exchange Commission (SEC)--twice in the same day. These reports were in addition to previous complaints to the SEC and the NYSE.

 

Related links: 

Ambow Education Facing Financial Collapse (Dahn Shaulis and Glen McGhee)

Bay State Beacon - Yet Another For-Profit College Debacle (Derek Newton, Forbes)

$AMBO is a Clown Car of Lies, Incompetence, and Poor Governance Speeding toward a Second Delisting (Ecliipse Research)

Massachusetts removes college degree requirements from most state jobs (Bryan Alexander)

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

Over the past year at least a dozen American states have taken a very interesting step. They have removed a college degree requirement for applicants to some or most state jobs. It’s a way of helping people “break the paper ceiling,” of advancing without needing to have postsecondary education credentials. Examples include Alaska, California, Maryland, Minnesota, New Jersey, North Carolina, Ohio, Pennsylvania (and Philadelphia), South Dakota, Utah, Virginia.

Now Massachusetts has joined them. (alternative link)

Governor Maura Healey filed an executive order on Thursday to ensure most state government job listings do not include degree requirements and hiring managers use a “skills-based” approach when picking candidates to fill open positions.

Skills-based instead of credential-driven: that’s an important shift.

Healey announced this decision during a speech to Associated Industries of Massachusetts on Thursday, in part to spur companies to rethink their approaches to hiring. She noted that career success shouldn’t be limited to the portion of the state’s population — nearly half, per a recent census count — with a bachelor’s degree.

Did you catch that last point, about almost 50% of the state having a degree? In fact, Walletbub just determined that Massachusetts was the most educated state in America. And that state now set aside those educational requirements at scale.

I don’t want to overstate this decision. After all, Massachusetts employs fewer than 50,000 people (source) so we’re not overhauling the state’s labor force. At the same time, nothing in the governor’s decision prevents people with degrees for applying to state positions. Moreover, the states which have taken such steps number not even one third of the lot; a majority of American states still require postsecondary sheepskin for public jobs. A powerful reason for those decisions is the currently low unemployment level; when that rises, perhaps these states will reverse their positions.

And yet I think this is noteworthy. It stands opposed to the inherited “college for all idea,” instead viewing non-academic achievement as on par with college or university degrees. It may encourage other organizations to do the same – other states, businesses, nonprofits – to similarly downgrade reliance on postsecondary attainment. As word of these shifts gets out it might depress college enrollment to a degree.

Note, too, that this isn’t a partisan move. Republicans and Democrats alike seem equally fond of the idea so far, even in our hyperpolarized times. It’s easy to find examples of this, starting with how the state leaders who have taken this step are members of both parties. A bipartisan pair of governors urged others to reduce college requirements. While the conservative National Review praised the strategy, so did Barack Obama:

Here’s an example of a smart policy that gets rid of unnecessary college degree requirements and reduces barriers to good paying jobs. I hope other states follow suit!

Let’s keep an eye on this trend. As 2024’s elections ratchet up, this could become a partisan issue. Or it might just continue with more governors deciding to open up public jobs beyond academic achievement. Is the college for all consensus shattering?