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

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

And yet—no one went to jail.

 
A Machine Built on Deception

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

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

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

 
The Collapse and the Fallout

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

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

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

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

 
The Executives Who Walked Away

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

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

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

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

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

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

 
A Legal and Regulatory Failure

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

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

 
A Cautionary Tale Still Unfolding

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

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

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

Borrower Defense to Repayment: A Broken Lifeline

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

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

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

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

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

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

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

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

Sources:

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

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

I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers*)

Image of Ann Bowers, courtesy of the Debt Collective

[Note:  This article originally appeared in In These Times on June 2, 2022.  The Higher Education Inquirer is now working with Ann Bowers and the Debt Collective to restore GI Bill benefits to veterans preyed upon by for-profit colleges.]

This week, former students of Corinthian Colleges — a predatory for-profit school that once boasted more than 100 campuses across the country — received news that their student loans will be canceled. In an announcement, a Department of Education (DOE) press release called the move ​“the largest single loan discharge the Department has made in history.” As a former student of Everest College, which is a branch of Corinthian, I am overjoyed that everyone who attended the scam school will finally be made whole.

The action, announced on June 2, will impact 560,000 former Corinthian students and $5.8 Billion in total student debt will be cancelled. This amounts to a stunning victory for debtors who took collective action to win relief.

But I want to set the record straight. This victory is not the result of the Biden administration’s good will. It is the outcome of a fierce organizing campaign by debtors that has been going on for almost eight years. I should know. I was part of a group of former students that launched a 7-year long student debt strike to win loan cancellation from the federal government.

Now, as President Biden considers cancelling student loan debt more broadly, the outcome for former Corinthian students should send a clear message that the only way to resolve the issue of pernicious student loan debt is to cancel it for everybody and to do so automatically, without making borrowers individually apply.

My involvement started back in 2014 when I read an article that revealed my school was suspected of lying to and defrauding borrowers, many of whom were from low-income families. I was outraged to discover that Corinthian had been under investigation by the U.S. Senate since at least 2010 for breaking the law — all while continuing to receive billions of dollars per year in government funding. Investigators found that Corinthian lied to students about job placement rates, enrolled people who were not prepared for college-level work and offered a sub-par education. The college also provided falsified placement information to accrediting agencies in order to keep federal money flowing. Some of the evidence against Corinthian was compiled by then-California Attorney General Kamala Harris, who sued the school in 2013 for false advertising.

Furious and determined to fight back, I turned to social media and found that hundreds of former students of my school were gathering online to address the dilemma that we had found ourselves in: huge debts and worthless degrees.

Organizers from the Debt Collective, a union for debtors, had also heard about the plight of Corinthian borrowers and found our group on Facebook. They proposed that everyone who had attended the school join together to pressure the government to cancel our debts. There were few other choices: student debts cannot be erased in bankruptcy except in a few extreme circumstances. Turning our individual burdens into a collective demand was our only option.

In the winter of 2015, a group of former students met in person to plan the campaign. We were all in a similar situation. None of us had been able to find the high-paying jobs that Corinthian had promised, and none of us could afford to pay back the astronomical sums that we owed. We turned our inability to repay into a rallying cry and launched a student debt strike — the first in U.S. history — to demand the cancellation of our loans. We called ourselves the Corinthian Fifteen.

The law was on our side. We relied on an obscure legal mechanism called Borrower Defense to Repayment that required the government to cancel the debts of defrauded students. Since the DOE did not even have an application available to those who wanted to apply for relief, we worked with lawyers to design a form and then made it available on the Debt Collective’s website. By the spring of 2015, applications from former for-profit college students rolled in by the thousands.

Public opinion was also on our side. Our campaign went viral. Dozens of news outlets covered the story of the scammed borrowers who were taking on the Obama administration in March 2015. Strikers met in Washington, D.C. with officials from the Consumer Financial Protection Bureau, the Department of Education and the Treasury Department. We shared our experiences of being lied to and defrauded by Corinthian and delivered hundreds of applications for loan relief into the hands of Ted Mitchell, the Undersecretary of Education under President Obama.

Our campaign won the support of major media organizations like the New York Times editorial board and politicians like Sen. Elizabeth Warren (D-Mass.) and Hillary Clinton. As more former for-profit college students realized they had been scammed, our numbers grew. We were joined by students who had attended other predatory schools such as ITT Technical Institutes. Our group of 15 strikers soon grew to 100. Thanks to the Debt Collective, we met with lawyers who helped us understand the consequences of not paying our debts. We knew that defaulted debtors could face wage garnishment and tax offsets. Older borrowers might have their social security benefits garnished. But we were ready for those consequences. Most of us could not afford to pay anyway and were already in default, so the strike was a way to politicize our inability to pay. We stood together for everyone in our situation across the country.

Unfortunately, the Department of Education dragged its feet. Officials claimed they cared about us and wanted to help, but rather than just canceling debts that were shattering lives and ruining futures, they set up a series of administrative processes and claimed they needed to study the issue. Little by little, a few former students who filled out the correct forms and checked the right boxes got their loans relieved. But hundreds of thousands of others waited in anguish.

I was one of the lucky ones. Finally, in 2017, I received an email from the DOE that said my loans were being canceled. My joy was tempered by the fact that thousands of others were still in debt. The news got even worse when President Donald Trump came into office. His Education Secretary, Betsy DeVos, halted the relief process that had begun slowly under Obama.

But the fight is far from over, and the stakes are higher than ever.

Back in 2010, when I enrolled at Corinthian, I didn’t know there was such a thing as for-profit education. I assumed that if the government was funding a college, it must be offering a quality education. My experience organizing a debt strike and talking to borrowers who attended colleges of all kinds has taught me that the problem is larger than scam schools. The for-profit college industry is part of a larger system of higher education that often promises the world while failing to deliver for students like me who don’t come from wealthy backgrounds.

Just like former Corinthian students won by turning our individual struggles into a collective demand, I believe we can win even more if student debtors from colleges of all kinds fight back together. We can demand a more fair and just higher education system and an end to the for-profit schools that prey on low-income students.

Neoliberalism, Accreditation, and the Endless Reinvention of Higher Ed Scams

Fraudsters are like cockroaches: persistent, hard to eliminate, and always scurrying just beneath the surface. And like cockroaches, when you see one, you can assume many more are hidden from view. In the sprawling, trillion-dollar ecosystem of American higher education—built on trust, hope, and credentials—fraud has been a constant companion. And under neoliberalism, it doesn’t just survive. It adapts, multiplies, and thrives.

The case of Anthony Bieda and the newly formed National Association for Academic Excellence (NAAE) is a vivid reminder of how this ecosystem protects and even rewards those who have failed the public. Bieda, a former executive at the disgraced Accrediting Council for Independent Colleges and Schools (ACICS), is now fronting a fresh accreditation startup, backed by conservative donors and political forces aligned with Donald Trump’s vision for higher ed deregulation.

NAAE’s mission is to provide a “holistic,” “anti-woke” alternative to traditional accreditors, evaluating colleges not on outcomes like graduation rates or job placement, but on how they shape the “human person.” It's vague, ideological, and intentionally opaque. Even Bieda admits the metrics are a secret—soon to be intellectual property.

Fraud in American higher education didn’t start with Trump University or Corinthian Colleges. It dates back to the 19th century, when diploma mills sold degrees like snake oil. In the early 20th century, accreditation systems emerged to clean up the mess—but fraud simply evolved. As the federal government opened the spigot of student aid after World War II, for-profit colleges and shady operators followed the money.

By the 2000s, the con had been professionalized. Publicly traded companies like Corinthian and ITT Tech learned how to game the system, using slick advertising, inflated job placement rates, and predatory recruiting to rake in billions in Title IV funds. The students—often low-income, Black, Latino, veterans, or single mothers—were left with broken promises and ballooning debt.

The watchdogs failed them. And some, like ACICS, weren’t just negligent—they were complicit.

In theory, accreditors are gatekeepers. In practice, they’ve too often been enablers. Accreditation bodies are funded by the very institutions they review, leading to deep structural conflicts of interest. ACICS became notorious for accrediting schools that federal and state regulators had flagged as predatory. After years of scrutiny, it was finally shut down in 2022.

Yet here we are, three years later, with ACICS’s former leader launching a new accrediting agency, this time cloaked in the language of "freedom of thought" and "anti-wokeness." Backed by the American Academy of Sciences and Letters (AASL), which insists it’s apolitical despite pushing overt culture war themes, NAAE is asking to be trusted with federal gatekeeping power.

It’s neoliberalism in action: dismantle public systems, defang oversight, and recycle failed leaders with fresh branding. The logic isn’t about protecting students—it’s about deregulating markets under the guise of reform.

The digital age has only made things worse. Online colleges with low academic standards, limited faculty oversight, and profit-driven motives are booming. AI will soon be used not just in instruction and grading, but in accreditation assessments themselves. NAAE promises to use AI to detect inconsistencies and enforce its vague standards. But when the standards themselves are ideological and untested, automation becomes a smokescreen.

Meanwhile, shady consultants, student loan relief scammers, and credentialing platforms are multiplying. It's not just about bad schools anymore—it’s an entire financialized ecosystem that treats students as data points and debtors.

Occasionally, the public sees the fraud for what it is. Corinthian and ITT collapsed. Whistleblowers have emerged. Borrower defense lawsuits have won relief. But like cockroaches, fraudsters scatter and reassemble elsewhere. They form new schools, new agencies, new lobbies. They rebrand and wait for the political winds to shift.

And with Trump pushing to dismantle the Department of Education and rewrite accreditation rules by executive order, the roaches are back in the kitchen.

At the Higher Education Inquirer, we believe fraud is not just a byproduct of capitalism—it’s a feature of an underregulated, investor-driven model of education. The solution is not to invent new accreditors with old ideas, but to demand radical transparency and public accountability.

That means open data on outcomes, default rates, and executive pay. It means public audits of accreditor decisions. It requires whistleblower protections for staff and students. And it must include criminal and financial penalties for institutional fraud.

Because fraudsters are like cockroaches. You may never eliminate them all—but you can turn on the lights, close the cracks, and make it a lot harder for them to scurry back into power.

Sources
Theo Scheer, “He Helped Lead a Disgraced College Accreditor. Under Trump, He Might Have Another Shot.” The Chronicle of Higher Education, July 21, 2025
U.S. Department of Education actions on ACICS (2016–2022)
Higher Education Inquirer reporting on for-profit colleges, accreditation failures, and Trump-era education policy
Interviews with whistleblowers and former students of collapsed institutions

The Reality of Higher Ed Fraud in 2025

"Fraudsters are like cockroaches"--Anonymous higher education businessman

Fraudsters are like cockroaches: persistent, hard to eliminate, and always scurrying just beneath the surface. And like cockroaches, when you see one, you can assume many more are hidden from view. In the vast, sprawling ecosystem of US higher education—a multi-trillion-dollar industry built on trust, hope, and credentials—fraud has been a lurking presence for more than a century. From diploma mills to for-profit scams, grade inflation to financial aid abuse, deceit has found fertile ground wherever oversight is weak and incentives are perverse.

The Gilded Roots of Fraud

Fraud in American higher education didn’t begin with Trump University or Corinthian Colleges. The roots go back to the 19th century, when the proliferation of unregulated “colleges” allowed opportunists to sell degrees to anyone willing to pay. These early diploma mills, often run by religious organizations or independent operators, flourished in an era before accreditation, issuing worthless credentials that nevertheless offered the illusion of legitimacy.

By the early 20th century, regional accreditation and federal involvement began to tame the worst actors, but fraud adapted. Unethical schools learned how to mimic the symbols of respectability, while federal dollars—including GI Bill money and later Pell Grants and federal student loans—provided irresistible bait.

For-Profit Colleges and the Federal ATM

The rise of for-profit higher education in the post-WWII era, especially from the 1970s onward, signaled a new chapter in educational fraud. Companies like ITT Technical Institute, Corinthian Colleges, and Education Management Corporation were publicly traded entities or private equity darlings that mastered the art of siphoning billions in taxpayer dollars while leaving students with worthless credentials and mountains of debt.

The fraud wasn’t always overt—it often came wrapped in slick marketing, predatory recruiting, falsified job placement statistics, and pressure to enroll students regardless of academic readiness. These institutions gamed federal financial aid systems, manipulating default rates and exploiting regulatory loopholes.

Even when regulators like the GAO or the Department of Education uncovered misconduct, enforcement was sporadic and too often came after the damage was done. In many cases, executives walked away with millions, while students—often from low-income, Black, Latino, and veteran communities—were left in financial ruin.

Accreditation as a Shield

One of the most confounding aspects of US higher ed fraud is the role of accreditors. Supposed to act as gatekeepers, many regional and national accreditors have served more as enablers—either asleep at the wheel or financially incentivized to look the other way. When accreditors are funded by the very institutions they review, conflict of interest becomes systemic.

This has allowed weak or outright fraudulent institutions to hide behind the veneer of legitimacy. Some accreditors, like ACICS (Accrediting Council for Independent Colleges and Schools), became infamous for rubber-stamping schools that should have been shuttered. ACICS accredited both ITT Tech and Corinthian before its federal recognition was finally revoked in 2022.

The New Wave: Online and AI-Enabled Scams

The digital age has added new dimensions to academic fraud. Online colleges like University of Phoenix, Ashford University (now University of Arizona Global Campus), and Western Governors University have raised concerns about low faculty oversight, cookie-cutter instruction, and questions about academic rigor. While not all online institutions are fraudulent, the modality makes it easier to scale shady practices and reduce accountability.

Now, with generative AI entering the classroom and enrollment systems, new questions emerge: How do we ensure academic honesty in an age of algorithmic ghostwriting? How will fraud evolve as institutions increasingly rely on automated admissions, grading, and content delivery?

And it's not just schools. Consultants, influencers, and shady loan servicers feed off the system like parasites—promising student loan relief, admissions guarantees, or academic success for a fee. In this ecosystem, fraud doesn't just survive—it thrives.

When the Roaches Scatter

Occasionally, the light shines in. Whistleblowers, investigative journalists, and government agencies have at times forced fraudsters into the open. Lawsuits have led to settlements. Schools have closed. Presidents have resigned. But like cockroaches, the fraud rarely disappears—it relocates, rebrands, and reinvents itself.

Even with borrower defense to repayment, loan forgiveness programs, and federal oversight mechanisms, restitution often comes too late. And public memory is short. Fraudulent operators have learned how to outlast administrations, court cases, and media cycles.

A Call to Radical Transparency

The Higher Education Inquirer has long called for radical transparency in US higher education. That means open data on outcomes, federal aid, loan default rates, salaries of top administrators, and accreditor performance. It means holding college leaders and board members accountable for failures—not rewarding them with golden parachutes or public pensions.

Fraud may be a permanent feature of capitalist education systems, but its impact can be minimized with independent media scrutiny, better whistleblower protections, and public investment that prioritizes students—not shareholders.

Because fraudsters are like cockroaches. You may never kill them all, but you can make the kitchen a whole lot harder to live in.

Online Program Manager for University of Arizona Global Campus Facing Financial Collapse

Zovio (ZVO), the for-profit online program manager for University of Arizona Global Campus (UAGC)*, is facing a financial collapse.

With three consecutive years of financial losses, Zovio (formerly known as Bridgepoint Education) lost a record $61 million in 2020.  Over the trailing 12 months (ttm) the company has lost $76 million.  Cash assets have decreased from $357 million in 2016 to $33 million in 2021.  

Zovio's cash runway (a key indicator of financial health) is now less than a year from zero, with revenues amounting to a fraction that they once were.  Liabilities are also greater than all assets.  

Zovio is working with a new CEO, Randy Hendricks, who has limited management experience, and the company has already been pared down to about 1500 full-time employees.  

Insiders tell the Higher Education Inquirer that the deal between Zovio and University of Arizona was a deal between people of low integrity and a lack of imagination.  

According to the Department of Education's College Navigator, University of Arizona Global Campus has just 194 full-time instructors for about 35,000 students, and many of those full-time instructors are also tasked with management roles: the tell-tale traits of a subprime robocollege.  

To make matters worse, ZVO, which was already financially unstable, was recently ordered to pay $22 million in compensation to California students who were defrauded.  

While Zovio's 2021 Annual Earnings will not be presented until Tuesday, March 29, 2022, there are strong indications that ZVO has reached a point of no return in its balance sheet.

Zovio's Assets (2009-2021) Source: Macrotrends.net

Zovio's Annual Report is coming out weeks late, just before the Securities and Exchange Commission deadline, and ZVO has not presented any revenue numbers to relieve shareholder anxiety.

Since March 18, ZVO shares have been below the $1 per share threshold to remain on the NASDAQ. Thirty consecutive trading days below $1 will trigger the first stages of a delisting from the stock market.

Zovio Share Price, March 3-March 28, 2022 (Source: Seeking Alpha)
 

What we are seeing looks very much like Corinthian Colleges and ITT Education before they collapsed. Each day, ZVO is getting closer to being delisted from NASDAQ and they are quickly running out of cash.

But what happens to federal government funding and oversight if Zovio collapses?  And how about UAGC--will it end up costing Arizona taxpayers?  

With UAGC, only a handful of edtech companies could handle such a large transition.  Experts we have contacted do not agree on potential surrogates for the online university or whether a surrogate is even necessary.  

Will the US Department of Education (ED) try to get another company to take over the business? In the Corinthian Colleges collapse, ED was able to get ECMC to take over operations. 

Will the US Department of Education require a special monitor, as they did with Corinthian Colleges?

University of Arizona could hire key executives and personnel, but that could cost the State of Arizona to hire those folks as state employees. 

These are issues that need to be addressed by the Department of Education and the State of Arizona now, to avoid another student loan train wreck.  

[Post script:  On Monday, March 28, 2022, Zovio announced that their 2021 Annual Earnings would be delayed.  No new date was reported.]  

*University of Arizona Global Campus was previously known as Ashford University.   According to the US Department of Education's College Scorecard, Ashford University has a 22 percent 8-year graduation rate. The College Scorecard reported that of student debtors two years into repayment, 32 percent were in forbearance, 28 percent were not making progress, 13 percent defaulted, 12 percent were in deferment, 7 percent were delinquent, 5 percent were making progress, 2 percent were paid in full, and 2 percent were discharged.

Related link: Verdict Against Zovio Adds to Peril for Arizona Global Campus (David Halperin, Republic Report) 

Related link: College Meltdown 2.0
Related link: Ashford University Deceiving Consumers, Violating Department of Defense Regulations
Related link: Unnamed Ashford University Suitor Joining Purdue University Global in "Race to the Bottom"

National American University and the Subprime College Crash

Summary

• As a subprime higher education company, National American University Holdings (NAUH) has avoided media and agency scrutiny for years.
• NAUH has been losing money since 2015, with only severe cost cutting in sight.
• A former NAUH executive has filed a False Claims lawsuit alleging that the school defrauded the US government.
• Share price has been at or near $1 delisting price since March 2018.
• NAUH has mortgaged their real estate assets to stay afloat, to the tune of $8M, a big number for a small cap company.
• NAUH is underwater, with debt surpassing equity in May 2018.
• NAUH has delayed submitting its annual report to the SEC.
• NAUH has only one major investor, T. Rowe Price.

NAUH and the Subprime College Crash
While subprime college college companies like Corinthian Colleges (COCO), Apollo Group (NASDAQ:APOL), DeVry University (DV), ITT Educational Services (ESI), and Education Management Corporation (EDMC) made the greatest profits and the greatest losses over the last two to three decades, National American University Holdings (NAUH) has been flying under the radar.

The reason for so little attention: NAUH is a small cap company with about 35 small ground campuses. Their campuses are spread out across the US West and Midwest, including Ellsworth Air Force Base near Rapid City, South Dakota. The company also has a few real estate holdings in South Dakota.

NAUH's shares have never risen to the heights of other subprime colleges that have already crashed. Its peak was $12--more than eight years ago.

According to the National Center for Education Statistics, NAUH's 3-year student loan default rate is 24% and their student loan repayment rate is 27%. Their graduation rate is 13-35%, depending on the campus. 

Worse yet, NAUH is targeting service members and veterans even more as the company lies at the brink of delisting. That's something that could get negative media attention.


Downward Trajectory
NAUH has made some money by scavenging from other failed schools, including Everest College (once part of the infamous Corinthian Colleges), ITT Tech, Brown Mackie College, Wright Career College, Career Point College, and Westwood College. But overall it has been on a three-year streak of earnings losses. NAUH's last reported gains were in February 2015.

Revenues are also down, way down. According to NAUH's last quarterly report, "FY 2018 annual revenues were $77.2 million, compared to $86.6 million in the prior year."

National American University's campuses are small, but most are too expensive to maintain. It appears that more than a dozen schools have closed or are in the process of closing.

Revenue + Earnings
(2015) 117.9M (-6.7M)
(2016) 96.1M (-8.2M)
(2017) 86.6M (-7.8M)
(2018) 77.2M (-12.3M)

Nearly all students are now learning online or through hybrid education. NAU has 4,6817 students in its online programs, 617 students at its campuses, and 747 students attend hybrid learning locations.

Enrollment
(2015) 9,519
(2016) 8,185
(2017) 6,703
(2018) 5,648

In 2016, National American University began closing campuses.  In 2018, they continue to consolidate and downsize.  


National American University Campus Populations 
(Source: National Center for Education Statistics)

Salem, VA  980

It Gets Worse
National American may gain some attention--in a bad way--because it shows few signs that it can survive.

The 2018 year started out rough, with the unsealing of a False Claims lawsuit by a former NAUH official. The lawsuit alleged that the school defrauded the US government out of millions of dollars in a student aid program, unlawfully paid bonuses to university employees for recruiting students and rigged the accreditation for its medical assisting program.

As part of its cost cutting, almost all of NAU's students are now online, which usually results in lower graduation rates--and more students who cannot repay their student loans.

NAUH has now been been forced to mortgage its properties for $8M in order to maintain liquidity. The loan is with Black Hills Community Bank. While the conditions may be favorable, maybe too favorable, business deals like this sound reminiscent of other subprime colleges before they failed.

NAUH Cash (in thousands)

(2015) 23,300

(2016) 21,713

(2017) 11,974

(2018) 5,324

NAUH's debt surpassed its equity value in May 2018. 

At this point, only one investor stands between NAUH and delisting--T. Rowe Price, a huge company that can afford to lose a little money in spots. But with all other institutional investors out, how long will T. Rowe Price keep their shares?

College Inc. Redux is Overdue

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

 

 

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

 

Times Have Changed, Not In a Good Way

 

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

 

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

 

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

 

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

HEI Files FOIA to Expose Delays and Disparities in Borrower Defense Discharges

The Higher Education Inquirer has submitted a Freedom of Information Act (FOIA) request to the U.S. Department of Education, seeking critical data on Borrower Defense to Repayment claims tied to some of the most notorious for-profit and career college chains in the United States. Filed on July 13, 2025, and formally acknowledged by the Department on July 14, this request seeks to uncover how many borrowers have received student debt relief, how many remain in limbo, and how many have been left in the dark despite being eligible.

The FOIA request includes a list of institutions with long histories of documented fraud, federal investigations, lawsuits, and closures. These include Corinthian Colleges (which operated Everest, Heald, and WyoTech), ITT Technical Institute, Westwood College, Marinello Schools of Beauty, the Art Institutes, Argosy University, American National University, Charlotte School of Law, DeVry University, Globe University/Minnesota School of Business, Independence University, Kaplan College/Kaplan University, Le Cordon Bleu, Missouri College, Mount Washington College, University of Phoenix, Virginia College, and Vatterott College.

For each institution, the Inquirer is requesting the number of borrowers identified for group discharge under the Borrower Defense authority. Of those, we are asking how many have had their loans discharged, how many cases remain pending, how many borrowers have been approved for discharge but not yet notified, and how many claims overlap with the class-action lawsuit Sweet v. McMahon (formerly Sweet v. Cardona and Sweet v. DeVos). For Corinthian Colleges specifically, the request also asks for the number of discharged borrowers under previous Department announcements and how many were also part of the Manriquez v. McMahon or Sweet settlements.

This data request covers the one-year period from July 13, 2024, to July 13, 2025, and asks for results in a structured, electronic format, preferably Excel.

The significance of this request cannot be overstated. Despite multiple well-publicized borrower defense settlements and mass discharge announcements, many defrauded students still have no clear idea whether they qualify for relief or when it might arrive. While the Department has made headlines for forgiving billions in student debt, especially for borrowers from predatory for-profit schools, those announcements often lack transparency and specificity. The FOIA request aims to fill those gaps and provide an accurate picture of the Department’s implementation of debt relief and justice for defrauded borrowers.

The Department of Education’s FOIA Service Center responded that the request has been received and is in queue. No further clarification is needed at this time, and no fees have been assessed. The Department did note that the current average processing time is 185 business days—over nine months. This timeline means that meaningful public disclosure may not happen until spring 2026, even as policymakers, advocates, and student debtors continue to push for faster relief and more accountability.

This FOIA request is part of the Higher Education Inquirer's ongoing efforts to investigate the afterlife of failed for-profit colleges, the bureaucratic delays in loan discharges, and the long shadow these schools have cast over the lives of working-class students. In many cases, these students were the first in their families to attend college and were aggressively targeted by institutions that promised fast-track careers and delivered financial ruin instead.

We will continue to monitor the Department’s response and will publish any findings we receive. If you are a former student of one of these schools and have filed a Borrower Defense claim—or have questions about whether you qualify—we invite you to share your experience. Your voice matters, and transparency is key to understanding how widespread the damage remains.

Contact the Higher Education Inquirer at gmcghee@aya.yale.edu.

Sources
U.S. Department of Education FOIA Acknowledgment Letter, July 14, 2025
FOIA Request No. 25-04397-F
Sweet v. Cardona (formerly Sweet v. DeVos), Case No. 19-cv-03674, N.D. Cal.
Manriquez v. DeVos, Case No. 3:17-cv-07210, N.D. Cal.
U.S. Department of Education Borrower Defense Updates – studentaid.gov

EducationDynamics: Still Shilling for Subprime Robocolleges

In 2021, The Higher Education Inquirer published an investigative report exposing the operations of EducationDynamics (“EDDY”), a for-profit lead generation and marketing firm with deep ties to some of the most controversial colleges in American higher education. Four years later, that story has not only held up—it demands a deeper and more urgent follow-up.

EDDY now claims that over the past five years, its clients have experienced an average of 47% enrollment growth above industry benchmarks, attributing this success to its “research-driven, continuous optimization process.” But behind that growth lies a troubling blend of aggressive marketing, deceptive lead generation, and exploitative labor practices—practices that appear to have only intensified.

A History of Bait and Switch

EDDY’s core operations remain rooted in multichannel marketing and lead generation for colleges—especially for-profit and formerly for-profit online institutions. These include Purdue University Global (formerly Kaplan University), University of Arizona Global (formerly Ashford University), American Intercontinental University, Colorado Technical Institute, and South University—all institutions with checkered histories of student outcomes, loan defaults, and regulatory scrutiny.

As previously reported by The Higher Education Inquirer, EDDY—originally known as Halyard Education—has been under ethical clouds for more than a decade. The company funneled leads to shuttered schools like Corinthian Colleges, ITT Technical Institute, and Virginia College, all of which collapsed under regulatory and legal pressure for defrauding students.

EDDY has expanded by acquiring other dubious operations. In 2019 and 2020, it bought up assets from Thruline and QuinStreet, the latter of which had been prosecuted by 20 state attorneys general in 2012 for deceiving military veterans through a phony education site, GIBill.com.

At least one source has linked EDDY to Alec Defrawi, a lead generator sued by the Federal Trade Commission in 2016 for job-application bait-and-switch tactics. Defrawi collected data from people seeking jobs, then sold it to education marketers who aggressively pitched them school enrollment instead. While the FTC complaint didn’t name EDDY directly, a public comment on the FTC’s site suggests a relationship between Defrawi and Halyard/EducationDynamics.

The 2025 Workforce Machine: Exploiting the Exploited

New accounts from Glassdoor and Indeed, along with internal conversations with former employees, show that EDDY's call centers in Boca Raton, Florida and Lenexa, Kansas continue to engage in bait-and-switch tactics. People looking for jobs are redirected to enrollment pitches for schools—many of which offer low graduation rates, high debt burdens, and little return on investment.

The call centers are described as toxic, high-pressure environments, where workers are paid $10 an hour, offered no real commission, and are charged up to $225 per day from their commission pool just to keep their jobs. According to workers, “good leads” are reserved for long-timers and favorites, while new and lower-ranked workers are left dialing disconnected numbers or harassing desperate job seekers.

“They want you to do a lot for $10 an hour,” said one former employee. “They’ll micromanage everything, and if you speak up about the shady stuff, you get punished or iced out.”

Former employees describe being instructed to use aliases and different company names to avoid regulatory detection and consumer suspicion. Others say they were explicitly told not to submit job applications that consumers had filled out, so they could be redirected toward school enrollments instead.

The Kansas location appears to mirror many of the Florida call center's tactics. One sales associate in Lenexa noted they were “getting shady and uninterested leads” and claimed that management was fully aware of the source and quality of these leads.

A Rigged System, Disguised as Opportunity

EDDY hides behind slick language and upbeat metrics, claiming to help students “adapt to the changing needs of today.” But the company’s model thrives on a population of vulnerable, low-income Americans—people simply looking for a job—who are rerouted into student loan debt for education they didn’t want or need.

Meanwhile, the people doing this marketing—call center employees—are also trapped. Lured in with promises of stability and advancement, they find a micromanaged workplace with no real raises, little upward mobility, and workplace retaliation for dissent.

The Better Business Bureau (BBB) gives EducationDynamics an A+ rating, which seems absurd given the overwhelming volume of worker testimonies and student complaints. It’s a glaring example of how the education marketing sector continues to operate with minimal oversight, even as its practices echo the discredited tactics of predatory for-profit colleges from the 2000s and 2010s.

The Bigger Picture

The collapse of Corinthian Colleges and ITT Tech was supposed to signal the end of an era. But EducationDynamics proves that the infrastructure of exploitation never disappeared—it simply rebranded, consolidated, and evolved. Today, it masquerades as a data-driven enrollment consultancy helping colleges grow, while quietly fueling the same pipeline of debt and despair for working-class Americans seeking stability.

Colleges desperate for enrollments, workers desperate for jobs, and the education marketing complex that profits from both—that is the dangerous triangle in which EDDY operates.

Final Thoughts

EDDY’s reported 47% enrollment growth comes with a heavy cost: false hopes, student debt, and labor exploitation. As the higher ed crisis deepens and more colleges seek lifelines, it’s imperative that watchdogs, regulators, and journalists remain vigilant about who’s behind the scenes pulling the strings.

EducationDynamics is not just a marketing firm. It is a relic of the for-profit college era—one that never really ended.

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If you've worked for EducationDynamics or were misled by their marketing, the Higher Education Inquirer wants to hear from you. Contact us confidentially at gmcghee@aya.yale.edu.

How bad actors maintain the silence

In early 2023, the Higher Education Inquirer received a letter from a prominent law firm representing a for-profit college with a significant online footprint. The letter, framed as a demand for the removal of an investigative article from our platform, accused us of defamation and threatened legal action. The article in question investigated financial and operational ties between several education-related entities, alleging that these connections may have harmed students and misused federal education funds.

The school in question—once part of a collapsed for-profit empire—has been at the center of public scrutiny and legal battles for more than a decade. With multiple ownership changes and continued reliance on federal student aid, its trajectory has mirrored that of other “subprime” colleges that critics argue profit from the desperation of working-class Americans seeking better lives through education.

HEI’s article followed up on prior reporting from established education watchdogs and included both public records and interviews with whistleblowers. It raised uncomfortable but critical questions about whether a nonprofit conversion was used as a façade for continued enrichment by private operators—via management contracts, lead generation, and opaque partnerships.

In response, the school's legal counsel sent a five-page cease-and-desist letter accusing HEI of publishing “verifiably false statements,” “misleading readers,” and violating the basic tenets of journalism. The letter denied all allegations, redefined industry terms like “online program manager,” and asserted that the school’s service provider—a company with ties to previous for-profit ventures—had not profited and had, in fact, saved the institution from collapse.

Beyond its immediate purpose, the letter serves as a clear example of how institutions with money and legal firepower can attempt to silence independent journalists and small outlets. The implication is not subtle: remove the story or risk expensive litigation.

This tactic—commonly known as a SLAPP (Strategic Lawsuit Against Public Participation)—relies not on prevailing in court but on intimidating reporters and shrinking the boundaries of public discourse. It’s especially effective against under-resourced outlets like HEI, which lack the legal teams and financial reserves of mainstream media companies.

In this case, by refusing to name the school or its legal representation in this article, we aim to highlight the broader dynamics rather than focus on personalities. The use of legal threats by online colleges to protect questionable business practices is not new. Over the last two decades, we’ve seen this pattern emerge repeatedly—from Corinthian Colleges to ITT Tech, and more recently, through institutions navigating the murky territory between nonprofit status and for-profit operations.

These threats don’t just chill speech—they freeze accountability. They make it harder for students, whistleblowers, and journalists to speak openly about abuses in a sector fueled by federal subsidies and student debt. They protect failing systems while vulnerable students are left to shoulder the consequences.

At HEI, we believe the public deserves transparency about where their tax dollars go and whether educational institutions are serving students or exploiting them. We believe that journalists must be free to raise difficult questions without fear of retribution. And we believe that schools receiving millions in federal funds—particularly those with a history of collapse, debt, and misrepresentation—should expect scrutiny, not silence.

If our reporting is wrong, we welcome good-faith corrections and open dialogue. But when a powerful institution threatens legal action to suppress investigation rather than engage with the facts, it raises the very questions they wish to bury.

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Sources

• U.S. Department of Education records on school ownership transitions

• Interviews with former employees and students

• Public court documents (lead generation lawsuit and dismissal)

• David Halperin’s original reporting in the Republic Report 

For-Profit College Barons Backed Trump, But Now May Be Scared (David Halperin)

Many top for-profit college industry owners supported Donald Trump’s bid to return to the White House. They had benefitted when, during Trump’s first term, his education secretary, Betsy DeVos, largely ended federal regulatory and enforcement efforts to hold for-profit schools accountable for deceiving students and ripping off taxpayers. But some industry barons, having contributed to the Trump 2024 campaign, now may be scared by efforts of the new Trump administration, including Elon Musk’s DOGE team, to disrupt operations of the U.S. Department of Education. Both Trump and his new Secretary of Education Linda McMahon publicly suggested last week that the Department will be abolished.

Although the for-profit college industry endlessly complained that the Biden and Obama education departments were unfairly targeting the industry with regulations and enforcement actions, they now seem concerned about the possibility that the Trump administration will shutter the Department entirely, abandon the federal role in higher education oversight, and leave regulation to the states. They likely are even more frightened that the proposed gutting of the Department will interfere with the flow of billions in federal taxpayer dollars to their schools.

The Chronicle of Higher Education reports that Jason Altmire, the former congressman who is now the CEO of the largest lobbying group of for-profit colleges, Career Education Colleges and Universities (CECU), says that his schools are worried about the potential disruption of funding for federal student grants and loans. Altmire apparently also expressed concern that turning regulation over to the states could create problems for online schools that operate in multiple states, especially because some states have relatively strong accountability rules.

Many for-profit colleges receive most of their revenue — as much as the 90 percent maximum allowed by U.S. law — from federal taxpayer-supported student grants and loans. For-profit schools have received literally hundreds of billions in these taxpayer dollars over the past two decades, as much as $32 billion at the industry’s peak around 2010, and around $20 billion annually n0w.

But many for-profit schools have used deceptive advertising and recruiting to sell high-priced low quality college and career training programs that leave many students worse off than when they started, deep in debt and without the career advancement they sought. Dozens of for-profit schools have faced federal and state law enforcement actions over their abuses.

CECU (previously called APSCU and before that CCA) has included in its membership over the years many of the most abusive, deceptive school operations, including Corinthian Colleges, ITT Tech, Education Management Corp., Perdoceo, Center for Excellence in Higher Education, DeVry, Kaplan (now called Purdue University Global), and Ashford University (now called University of Arizona Global Campus). (Republic Report highlighted the bad actors on CECU’s membership list for many years; CECU removed the list from its website about four years ago.)

Florida couple Arthur and Belinda Keiser are among those who have benefited the most from CECU lobbying and taxpayer funding. The Keisers run for-profit Southeastern College and non-profit Keiser University, which collectively have received hundreds of million in federal education dollars over the years. They also are among the most politically active owners in the career college industry.

While Belinda Keiser has run, unsuccessfully, for the state legislature, Arthur Keiser has been one of the most aggressive lobbyists for the career college industry in Washington. He has been a dominant figure on the board of CECU, and he hired expensive lawyers to go all the way to the U.S. Supreme Court in a failed effort to block a settlement that provides debt relief to students who attended deceptive colleges, including Keiser University. During Trump’s first term, Arthur Keiser chaired NACIQI, the Department of Education’s advisory committee reviewing the performance of college accreditors.

The Keisers created controversy and were eventually penalized by the IRS for a shady 2011 conversion of Keiser University from for-profit to non-profit, in a deal that allowed the couple to continue making big money off the school. Keiser University has also settled cases with the Justice Department and the Florida attorney general over deceptive practices.

In the two years leading up to the November 2024 election, according to Federal Election Committee records, Belinda Keiser donated more than $250,000 to various Republican candidates and political committees, including $35,000 to the Trump 47 Committee, $10,300 to the Trump-affiliated Save America PAC, $3300 to the Trump Save America Joint Fundraising Committee, and $33,400 to the Republican National Committee.

Ultra-wealthy college owner Carl Barney was another big Trump 2024 donor. Barney operated the Center for Excellence in Higher Education, another troubling conversion from for-profit to non-profit that kept taxpayer money flowing into his bank accounts, for schools including CollegeAmerica and Independence University. Barney’s schools lost their accreditation, and then their federal aid, after the Colorado attorney general in 2020 won a lawsuit accusing CollegeAmerica of deceptive practices. (The case is still pending after an appeal.)

Amid a torrent of donations to Republican committees last fall totaling over $1.6 million, Barney donated $924,600 to the Trump 47 Committee, $74,500 to the Trump-supporting Make America Great Again PAC, and $247,800 to the Republican National Committee, according to federal records.

In a September post on his personal website, Barney explained that he liked that Trump “wants to work with Elon Musk to reduce spending, regulations, waste, and fraud in the federal government.”

What exactly waste, fraud, and abuse seems to mean in the context of the Trump/Musk effort is troubling. There is little evidence that what DOGE has found and shut down relates to actual fraud, abuse, or corruption.

Instead it appears that much of what Musk and DOGE have focused on is weakening or eliminating either (1) federal agencies that have been investigating Musk businesses, or businesses of other top Trump donors; or (2) agencies that work on priorities — such as equal opportunity for Americans or alleviation of poverty or disease overseas — that Trump or Musk dislike.

And the Trump team has been firing, across multiple federal agencies, the inspectors general, ethics watchdogs, and other top officials actually charged with rooting out waste, fraud, and abuse — further undermining the claim that the Trump team is trying to bring about more honest and efficient government.

It’s doubtful that even the heaviest sledgehammer DOGE attack would eliminate the federal student grants and loans that Congress has mandated to give low and moderate income Americans of all backgrounds a better chance to improve their lives through higher education. Assuming such financial aid will continue, then if Trump, Musk, and DOGE truly wanted to root out waste, fraud, and abuse, and save big money for taxpayers, one thing they could do is strengthen, rather than abolish, the Department of Education — not to keep the money flowing to all for-profit colleges, as CECU seems to want, but to advance efforts to ensure that taxpayer dollars go only to those colleges that are creating real benefits for students and for our economy.

That would mean enforcing and building on, not destroying, the Department of Education rules put in place by the Biden administration, including: the gainful employment rule, which creates performance standards to cut off aid to for-profit and career programs that consistently leave graduates with insurmountable debt; the borrower defense rule, which cancels the debts of students scammed by their schools and empowers the Department to go after those predatory schools to recoup the taxpayer money; and the 90-10 rule, which helps keep low-quality programs out of the federal aid program and reduces the risk that poor quality schools will target U.S. veterans and service members.

It would also mean continuing the Biden administration’s efforts to more aggressively evaluate the performance of the private college accrediting agencies that oversee colleges and serve as gatekeepers for federal student grants and loans.

Fighting waste, fraud, and abuse would also mean strengthening, not gutting, efforts to investigate and fight predatory college abuses by enforcement teams at the Department of Education, Federal Trade Commission, Consumer Financial Protection Bureau, Justice Department, Department of Veterans Affairs, and Department of Defense. Many deceptive school operations remain in business today, recruiting veterans, single parents, and others into low-quality, over-priced college programs; they include Perdoceo’s American Intercontinental and Colorado Technical University, Purdue University Global, University of Arizona Global Campus, DeVry University, Walden University, the University of Phoenix, South University, Ultimate Medical Academy, and UEI College.

Fighting waste, fraud, and abuse also would likely require a different higher ed leader at the Department than Nicholas Kent, the Virginia state official whom Trump has nominated to serve as Under Secretary of Education. Kent previously worked at CECU as a lobbyist advancing the interests of for-profit schools. Prior to that, he worked at Education Affiliates, a for-profit college operation that faced civil and criminal investigation and actions by the Justice Department for deceptive practices.

Diane Auer Jones, who held the same job in the first Trump administration, had a career background similar to Kent’s, and she twisted Department policies and actions to benefit predatory colleges. That is presumably the world CECU and its for-profit college barons want to restore: All the money, none of the accountability rules.

In the end, the predatory college owners may get what they want. Given the brazen self-dealing, and fealty to corporate donors, of the Trump-Musk administration, and the sharp elbows of paid-for congressional backers of the for-profit college industry like Rep. Virginia Foxx (R-NC), we will probably end up with the worst of all outcomes: the destruction of the Department of Education but a continued flow of taxpayer billions to for-profit schools, without meaningful accountability measures to ensure that everyday Americans are actually protected from waste, fraud, and abuse.

Americans should demand from Trump and Secretary McMahon a different course — one that provides educational opportunity for all and strengthens the U.S. economy by investing in higher education, while removing from the federal aid program the abusive colleges that rip off students and scam taxpayers.

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

Dreams I'll Never See: Higher Ed’s Broken Promises and the American Student

“I’m hung up on dreams I’ll never see.”

That Southern rock refrain from Molly Hatchet captures the bitter reality faced by millions of Americans who invested in higher education only to be left with debt, shattered hopes, and uncertain futures.

Educator Gary Roth’s The Educated Underclass points to a growing class of credentialed individuals caught in precarious economic and social positions—overqualified yet underpaid, burdened by debt without the stability education promised. Yet it is the borrowers’ own stories that reveal the human toll behind the numbers.

Over the past month, The Higher Education Inquirer has chronicled the experiences of borrowers misled by predatory institutions—mainly for-profit colleges—through its Borrower Defense Story Series. These narratives shed light on the deeply personal consequences of institutional deception and a federal loan forgiveness process that is often slow, bureaucratic, and uneven.

In one story, a single mother describes her experience at Chamberlain University School of Nursing. She followed every instruction, met every deadline, and committed herself fully to a career in health care. Yet she never earned her degree. Despite this, she remains burdened with thousands of dollars in student loan debt. Her borrower defense application has yet to yield relief.

Another borrower shares her journey with Kaplan University Online, where promises of flexible learning and job placement proved empty. After transferring and completing her degree elsewhere, she still faces uncertainty as her borrower defense claim drags on, highlighting the emotional toll of navigating a broken loan forgiveness system.

A third story critiques the broader system of higher education finance, describing how students—especially those without family wealth or institutional support—become trapped in debt relationships that limit their autonomy and economic mobility. Rather than offering a pathway to security, college becomes a mechanism of financial entrapment.

Most recently, a former fashion student recounts how private loans—unlike federal loans—offered no path for borrower defense relief after she attended a program marketed with glowing career outcomes that never materialized. The result was devastating financial consequences with little recourse.

These individual stories are not exceptions. As of April 30, 2024, over 974,000 borrowers had received more than $17 billion in loan discharges under borrower defense rules, mostly through group claims tied to scandals involving Corinthian Colleges, ITT Tech, and DeVry. Yet hundreds of thousands still await decisions, and many are excluded entirely due to private loans, school exclusions, or bureaucratic delays.

The borrower defense rule was meant to shield students from fraud, but political interference, legal challenges, and an overwhelmed bureaucracy have marred its implementation. Behind the statistics are people deceived, indebted, and left behind.

Meanwhile, elite institutions hoard resources, adjunct faculty struggle to survive, and the promise of higher education rings hollow for many.

“I’m hung up on dreams I’ll never see.” This lyric is not just poetry but the lived reality for millions. Unless there is radical change—debt cancellation, labor protections, honest admissions, and accountability—the cycle of exploitation will only grow louder.

Some were sold dreams they could never afford. Many of those dreams are now lost.

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Sources

Roth, Gary. The Educated Underclass. Pluto Press, 2022
National Center for Education Statistics. “Debt After College”
The Institute for College Access and Success (TICAS). “Student Debt and the Class of 2023”
American Psychological Association. “Mental Health Impacts of Student Debt”
Bousquet, Marc. How the University Works. NYU Press, 2008
McMillan Cottom, Tressie. Lower Ed. The New Press, 2017
https://www.highereducationinquirer.org/2025/07/i-did-everything-right-and-im-still.html
https://www.highereducationinquirer.org/2025/07/fashion-gone-bad-for-private-student.html
https://www.gao.gov/products/gao-24-106530
https://standup4borrowerdefense.com
https://www.insidehighered.com/news/government/student-aid-policy/2023/10/24/colleges-concerned-about-rise-borrower-defense-claims