Phoenix Education Partners, FAFSA Fraud, and the Familiar Dance of Blame

When Phoenix Education Partners (PXED) CEO Chris Lynne publicly blamed the U.S. Department of Education for missing fraud in FAFSA applications—fraud that allowed the University of Phoenix to enroll individuals engaged in financial-aid misconduct—he likely hoped to redirect scrutiny away from his own shop. Instead, the maneuver sent up a flare. For many observers of the for-profit college sector, it felt like the return of a well-worn tactic: deflect, distract, and deny responsibility until the heat dies down.

The pivot toward blaming the Department of Education does not merely look defensive; it echoes a pattern that helped bring down an entire generation of predatory schools. And it raises a simple question: why is PXED responding like institutions that have something to hide?


The Old Script, Updated

The University of Phoenix, under PXED’s ownership, carries not just a long memory of investigations and settlements but a structural DNA shaped by years of aggressive enrollment management, marketing overreach, and high-pressure tactics. When the industry was confronted with evidence of systemic abuses—lying about job placement, enrolling ineligible students, manipulating financial-aid rules—the typical industry defense was to claim that problems were caused by bad actors, by misinterpreted regulations, or by a sluggish and incompetent Department of Education.

Those excuses were not convincing then, and they ring even more hollow now.

If individuals involved in financial-aid fraud managed to slip into the system, an institution with PXED’s history should be the first to strengthen internal controls, not pass the buck. Schools are required under federal law to verify eligibility, prevent fraud, and monitor suspicious patterns. Pretending that ED is solely responsible ignores the compliance structure PXED is obligated—by statute—to maintain.

Why Blame-Shifting Looks So Suspicious

Instead of demonstrating transparency or releasing information about internal controls that failed, PXED’s leadership has opted for a public relations gambit: blame the regulator. This raises several concerns.

First, shifting responsibility before releasing evidence suggests that PXED may be more focused on reputational management than on institutional accountability. If the organization’s processes were sound, those facts would speak louder—and more credibly—than an accusatory press statement.

Second, the posture is déjà vu for people who have tracked the sector for decades. Corinthian Colleges, ITT Tech, Education Management Corp., and Career Education Corporation all blamed ED at various stages of their collapses. In each case, deflection became part of the pattern that preceded deeper revelations of systemic abuse.

When PXED’s CEO adopts similar rhetoric, observers reasonably wonder whether history is repeating itself—again.

Finally, PXED’s argument undermines trust at a moment when the University of Phoenix is already under skepticism from accreditors, policymakers, student-borrower advocates, and the public. Instead of strengthening compliance, PXED’s messaging signals defensiveness. Institutions with nothing to hide usually take a different approach.

The Structural Issues PXED Doesn’t Want to Discuss

PXED acquired the University of Phoenix with promises of modernization, stabilization, and responsible stewardship. But beneath the marketing, core challenges remain:

A business model dependent on federal aid. The more a school relies on federal dollars, the stronger its responsibility to prevent fraud—not the weaker.

A compliance culture shaped by profit pressure. For-profit education has repeatedly shown how financial incentives can distort admissions and oversight.

A credibility deficit. PXED took over an institution known internationally for deceptive advertising and financial-aid abuses. Blaming ED only magnifies the perception that nothing has fundamentally changed.

A fragile regulatory environment. With oversight tightening and student-protection rules returning, PXED cannot afford to gesture toward the old for-profit playbook. Doing so suggests they are trying to manage optics instead of outcomes.

What Accountability Would Look Like

If PXED wanted to demonstrate leadership rather than defensiveness, a different response was available:

• Conduct and publish a full internal review of financial-aid intake processes
• Outline steps to prevent enrollment of fraudulent actors
• Acknowledge institutional lapses—and explain how they occurred
• Invite independent audits rather than blaming federal partners
• Demonstrate an understanding of fiduciary obligations to students and taxpayers

This is the standard expected of Title IV institutions. It is also the standard PXED insists they meet.

A Familiar Pattern at a Familiar Institution

Every moment of pressure reveals something about institutional culture. PXED’s choice to immediately fault the Department of Education—without presenting evidence of its own vigilance—suggests that the company may still be operating according to the old Phoenix playbook: when in doubt, blame someone else.

But in 2025, the public, regulators, and students have seen this movie before. And they know how it ends.

Sources
U.S. Department of Education, Federal Student Aid Handbook
Senate HELP Committee, For-Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success
Federal Trade Commission, University of Phoenix Settlement Documents
U.S. Department of Education, Program Review and Compliance Requirements
Higher Education Inquirer archives

The Layoff.com: Observations of College Meltdown in Real Time (Updated September 29, 2024)

The Layoff.com is a "simple discussion board" for workers who would like to learn more about the rumors or possibility of job cuts in their organization. It's also been helpful for us to understand what has been happening behind the scenes in the US Higher Education business. 

 

We have been observing and participating on this website for more than a dozen years, watching the fall of Corinthian Colleges (Everest College, Wyotech, and Heald), ITT Tech, Education Management Corporation (the Art Institutes and South University), the partial collapse of Apollo Group (University of Phoenix), Perdoceo (formerly Career Education Corporation), and Laureate International, and the transformation of Kaplan University to Purdue University Global and Bridgepoint Education (Ashford University) to University of Arizona Global.   

As the College Meltdown has advanced, we have also observed a number of private schools collapse and public colleges and universities struggle. As enrollments continue to drop, we can expect more layoffs to occur and for education related businesses to struggle more.  

 

The contents of this article are updated periodically, to illustrate trends in the College Meltdown.  The most recent update was published September 29, 2024.  2U, the online program manager for elite university certificates has been the poster child in 2024, but there are many other companies and institutions in peril.  

 

2U and edX 

 

Adtalem Global Education  

 

Albright College

Barnes and Noble College Booksellers

 

Cengage

Chegg

 

Concordia University, Ann Arbor

Coursera

 

Delta State University 

 

DeVry University 

 

Emerson College 

 

Gwynedd-Mercy University 

 

Keystone College  

 

Maximus 

 

National American University 

 

Navient 

 

Northern Illinois University 

 

Penn State University  

 

Perdoceo   

 

Saint Cloud State University 

 

Sallie Mae  

 

Udemy 

University of Arizona 

University of Maryland Global 

 

University of New Orleans 

 

University of North Carolina, Asheville

 

University of Phoenix 

 

University of Wisconsin-Milwaukee 

 

Walden University 

 

Western Illinois University   

West Virginia University 

 

Wittenberg University 

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.

---

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.”

---

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.

---

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.

---

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.

Layoffs in Higher Education

The Layoff.com is a "simple discussion board" for workers who would like to learn more about the rumors or possibility of job cuts in their organization. It's also been helpful for us to understand what has been happening behind the scenes in the US Higher Education business. 

We have been observing and participating on this website for more than a dozen years, watching the fall of Corinthian Colleges (Everest College, Wyotech, and Heald), ITT Tech, Education Management Corporation (the Art Institutes and South University), the partial collapse of Apollo Group (University of Phoenix), Perdoceo (formerly Career Education Corporation), and Laureate International, and the transformation of Kaplan University to Purdue University Global and Bridgepoint Education (Ashford University) to University of Arizona Global.   

 

 

 

As the College Meltdown has advanced, we have also observed a number of private schools collapse and public colleges and universities struggle. As enrollments continue to drop, we can expect more layoffs to occur and for education related businesses to struggle more.  

 

The contents of this article are updated periodically, to illustrate trends in the College Meltdown.  The most recent update was published October 29, 2024.  2U, the online program manager for elite university certificates has been the poster child in 2024, but there are many other companies and institutions in peril.  

 

2U and edX 

 

Adtalem Global Education  

 

Albright College

 

Baldwin-Wallace University  

Barnes and Noble College Booksellers

 

Cengage

Chegg

 

Concordia University, Ann Arbor

Coursera

 

Delta State University 

 

DeVry University 

 

Emerson College 

 

Gwynedd-Mercy University 

 

Keystone College  

 

Maximus 

 

National American University 

 

Navient 

 

Northern Illinois University 

 

Penn State University  

 

Perdoceo   

 

Portland State University 

 

Saint Cloud State University 

 

Sallie Mae  

 

Southern New Hampshire University 

 

Tennessee State University

 

Udemy 

University of Arizona 

University of Maryland Global 

 

University of New Orleans 

 

University of North Carolina, Asheville

 

University of Phoenix 

 

University of Wisconsin-Milwaukee 

 

Walden University 

 

Western Illinois University   

 

Western Washington University 

West Virginia University 

 

Wittenberg University 

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

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

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

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

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

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

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

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

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

What should we be observing in this new phase:  

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

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

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

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

5. The growth of Online Program Managers

6. The degree that public universities are serving their citizens

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

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

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

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

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

References

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

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

The Link Between Greed and Efficiency

In the mythology of American capitalism, “efficiency” is the magic word that justifies austerity for workers, rising tuition for students, and ever-expanding wealth for administrators, financiers, and institutional elites. It is framed as neutral, technocratic, and rational. In reality, efficiency in higher education has become inseparable from greed, functioning as a mask for extraction and consolidation.

Universities and their sprawling medical centers have become some of the largest landowners and employers in the cities they inhabit. As Devarian Baldwin has shown, these institutions operate as urban empires, expanding aggressively into surrounding neighborhoods, raising housing costs, displacing long-time residents, and reshaping cities to suit institutional priorities. University medical centers, nominally nonprofit, consolidate smaller hospitals, close services deemed unprofitable, and charge some of the highest healthcare prices in the nation. These operations are justified as efficiency or economic development, yet they often destabilize the communities they claim to serve.

Endowments, some exceeding fifty billion dollars at elite institutions, have become central to this dynamic. Managed like hedge funds, these pools of capital are heavily invested in private equity, venture capital, real estate, and derivatives. The financial logic of endowment management now shapes university priorities, shifting focus from public service and learning to capital accumulation, investor returns, and risk management. Efficiency is defined not by educational outcomes but by the growth of financial assets.

This culture of extraction has been amplified by decades of government austerity. Public funding for higher education has steadily declined since the 1980s, forcing institutions to behave like corporations. At the same time, the aging Baby Boomer generation is creating unprecedented financial pressures on Social Security, Medicare, and healthcare systems, leaving public coffers stretched thin and reinforcing a winner-take-all national mentality. In this environment, universities compete fiercely for students, research dollars, donors, and prestige, producing conditions ripe for exploitation.

Outsourcing has become a standard method to achieve “efficiency.” Universities frequently contract out food service, custodial work, IT, housing management, and security. Workers employed by these contractors often face lower wages, fewer benefits, and higher turnover, while administrators present these arrangements as cost-saving measures. Meanwhile, administrative layers within institutions continue to expand, creating a managerial class that oversees growth and strategy while teaching budgets shrink. As Marc Bousquet has argued, the corporate-style management model displaces faculty governance and treats students and staff as revenue streams rather than participants in a shared educational mission.

The adjunctification of the faculty exemplifies efficiency as exploitation. Contingent instructors now teach the majority of classes in American higher education, earning poverty-level wages without benefits while juggling multiple teaching sites. Institutions call this “flexibility” and “cost containment,” but in reality it transfers value from instruction to administrative overhead, athletics, real estate, and financial operations, all while reducing the quality of education and undermining academic continuity.

The rise of Online Program Managers, or OPMs, further illustrates the fusion of greed and efficiency. These companies design, manage, and market entire online degree programs, often taking forty to seventy percent of tuition revenue. While presented as efficiency partners, OPMs aggressively recruit students, inflate costs, and minimize academic oversight. Their business model mirrors the exploitative strategies of for-profit colleges, which pioneered high-cost, low-quality instruction combined with heavy marketing to capture federal loan dollars. The collapse of chains such as Corinthian, ITT, and EDMC left millions of borrowers with debt and no degree, yet the model persists inside nonprofit universities through OPMs and algorithm-driven online programs.

“Robocolleges” represent the latest evolution of this trend. AI-driven instruction, predictive analytics, automated grading, and digital tutoring promise unprecedented efficiency, but they often replace human educators, reduce pedagogical oversight, exploit student data, and prioritize enrollment growth over educational quality. Efficiency here serves the financial bottom line rather than the learning or well-being of students.

The result of these extractive practices is a national crisis of student debt, now exceeding one trillion dollars. Students borrow to cover skyrocketing tuition, outsourced services, underpaid instruction, and the costs of programs shaped by OPMs or automated platforms. Debt is not an accident of the system; it is the intended outcome, a mechanism for transferring public resources and student labor into private profit.

The broader social context intensifies the problem. Higher education exists in a winner-take-all, financialized society, where resources flow upward and the majority of people are told to compete harder, work longer, and borrow more. Universities have internalized this ideology, acting as both symbols and engines of extraction. Efficiency, under this paradigm, is defined not by the effectiveness of teaching or research but by the expansion of institutional power, wealth, and influence.

True efficiency would look very different. It would invest in educators rather than contractors, stabilize academic labor rather than exploit it, serve surrounding communities rather than displace them, expand learning opportunities rather than debt, and prioritize democratic governance over corporate-style hierarchy. Efficiency should measure how well institutions serve the public good, not how well they protect endowment returns, OPM profits, or administrative salaries.

Until such a redefinition occurs, efficiency will remain one of the most powerful tools of extraction in American higher education, a rhetorical justification for greed disguised as rational management.

---

Sources

Devarian Baldwin, In the Shadow of the Ivory Tower
Marc Bousquet, How the University Works
Tressie McMillan Cottom, Lower Ed
Christopher Newfield, The Great Mistake
Sara Goldrick-Rab, Paying the Price
Government reports on for-profit colleges, student debt, and OPMs
Research on higher education financialization, outsourcing, and austerity policies

College Meltdown 2.0

College Meltdown 2.0 is distinctly different than the College Meltdown that started in 2010. 

The first wave of the College Meltdown (2010-2021) resulted in a slow and steady drop in overall US college enrollment, with dramatic losses among for-profit colleges and community colleges. Corinthian Colleges, ITT Educational Services, and Education Management Corporation were three large for-profit chains to close. Small private liberal arts schools and regional universities also experienced losses.  More folks were moving into the growing educated underclass.  

Elements of College Meltdown 2.0 include publicly held corporations.  Click on the image to see the chart (Source: Seeking Alpha) 

College Meltdown 2.0 comes as the Coronavirus becomes more manageable.  However US fascism continues to advance, student loan debt is slowly approaching $2 trillion, and the 2026 enrollment cliff is just a few years away.  This new wave includes remnants of for-profit colleges like National American University, Stratford University, South University, the Art Institutes, University of Phoenix (owned by Apollo Global Management), Career Education Corporation (aka Perdoceo), and DeVry University (owned by Cogswell Education) as well as national accreditor ACICS. 

The largest element of College Meltdown 2.0 is federal student loan debt, which appears to be rising to an unsustainable level--as it hamstrings the lives of millions of families.  When mandatory student loan payments resume (scheduled for May 1), long-term default rates may range from 30 and 50 percent.  It also appears that at least $500 billion of the Federal Student Aid (FSA) student loan portfolio will be unrecoverable.  

College Meltdown 2.0 also involves online program managers (OPMs) that service elite schools (2U), regional universities (Academic Partnerships), and subprime robocolleges (Zovio-University of Arizona Global and Graham Holdings-Kaplan-Purdue University Global). 

Student loan servicers and private student loan companies (Maximus, Navient, Sallie Mae, Nelnet), publishers and other edtech enterprises (EducationDynamics, Chegg, Barnes & Noble Education, Coursera, and Guild Education) are implicated or at least entangled in the mess.  Higher education accreditors and student loan asset-backed securities (SLABS) are also worth monitoring.  

Related link: 2U Virus Expands College Meltdown to Elite Universities

Related link: How University of Phoenix Failed. It's a Long Story. But It's Important for the Future of Higher Education.

Related link: The Colbeck Scandal (South University and the Art Institutes)

Related link: Navient and the Zombie SLABS Meltdown (Bill Harrington*)

Related link: The Growth of "RoboColleges" and "Robostudents"

Related link: Coursera IPO Reveals Bleak Future for Global Labor

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

College Prospects, College Targets

In the old American dreambook, a “college prospect” was a young person with ambition and promise—a student looking for a campus where they could grow intellectually, socially, and economically. But in today’s reality, “prospect” is an industry term, a sales category. In enrollment management suites across the country, prospective students aren’t just applicants; they’re targets.

[Image from Brown University, August 2025]

Higher education—whether elite, public, or for-profit—now runs on sophisticated marketing pipelines. The same predictive analytics used by corporations, political campaigns, and even law enforcement are deployed to track, segment, and convert students into paying customers. Colleges buy and sell student data from standardized test companies, online lead generators, and high school surveys. They follow “prospects” through their clicks, their campus visits, their FAFSA submissions—nudging them toward a deposit with personalized emails, algorithmically timed text messages, and calculated financial aid offers.

This is not about education first. It’s about yield rates, tuition revenue, and net tuition per student. For working-class families, first-generation students, and those from marginalized backgrounds, this targeting can be especially dangerous. The glossy brochures and “student success” slogans conceal the hard realities: inflated tuition, debt burdens that can last decades, and career outcomes far less rosy than advertised.

The for-profit sector perfected this playbook. Schools like Corinthian Colleges, ITT Tech, and the Art Institutes honed high-pressure recruiting scripts, built massive lead databases, and saturated social media feeds with ads promising quick career training and big paydays. When many of these institutions collapsed under federal scrutiny, their tactics didn’t disappear—they spread. Today, public universities and elite private schools use their own version of the same system, dressed up in more respectable branding.

At the top end of the prestige ladder, “targets” have a different profile. Elite schools scout “development prospects”—wealthy families whose applications are accompanied by the potential for multimillion-dollar gifts. The student is both a potential enrollee and a future donor pipeline. Recruitment here is less about financial aid and more about legacy admissions, networking dinners, and quiet tours with the president.

What all this targeting has in common is an imbalance of information. Colleges know almost everything about their prospects—income bands, likely majors, ability to pay—while students and families often have only the marketing copy and a sticker price. In this environment, independent, transparent information is a rare form of defense.

That’s where tools like TuitionFit and the CollegeViability app come in—not as recruitment aids, but as counterintelligence for families.

• TuitionFit collects and shares real financial aid offers from students across the country. This allows families to see what schools are actually charging students with similar academic and financial profiles—not just the “average” cost schools advertise. By revealing the hidden discounting game, TuitionFit helps families avoid overpaying and resist the psychological pressure of “limited-time offers” from admissions officers.

• The CollegeViability app compiles public financial data from the U.S. Department of Education and other sources to create an at-a-glance picture of an institution’s fiscal health. It tracks enrollment trends, tuition dependency, debt loads, and other risk factors—warning signs that a college might be on the verge of closing or slashing programs. Families who use it can see trouble coming long before the next headline about a sudden campus shutdown.

These are not small benefits. Every year, thousands of students are lured into institutions that overpromise and underdeliver. Some are blindsided by mid-program closures. Others graduate into underemployment with six figures of debt. Without tools like TuitionFit and CollegeViability, many would walk into these situations blind.

The troubling truth is that higher education’s recruitment machine treats students the same way a corporate sales funnel treats customers—and sometimes the way a military intelligence operation treats enemy assets. Prospects are acquired, qualified, engaged, and converted. They are ranked by “propensity to enroll,” courted by carefully timed contact, and celebrated in quarterly revenue reports.

The people making the targeting decisions rarely bear the costs of a bad outcome. If a student drops out with debt and no degree, it’s a personal tragedy, not a liability on the college’s balance sheet. If a school shutters with no warning, students and their families are left scrambling while administrators move on to new posts elsewhere.

College should be more than a precision-marketed capture. It should be a transparent, good-faith exchange where both sides have access to the same essential facts. Right now, that balance doesn’t exist—and the gap is being exploited.

Families who want to survive the recruitment gauntlet must treat it for what it is: a sales process backed by data analytics, designed to maximize institutional revenue, not student outcomes. That means using every independent resource available, asking hard questions, and refusing to be rushed into decisions.

In the end, the difference between being a college prospect and a college target might be whether you’re armed with real information—or just hope.

Sources:

• The Century Foundation, College Admissions and the Business of Enrollment Management

• U.S. Senate HELP Committee, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success

• The Hechinger Report, How Colleges Use Big Data to Target Students

• TuitionFit, About

• CollegeViability, Institutional Health Indicators

Unnamed Ashford University Suitor Joining Purdue University Global in "Race to the Bottom"

Who would buy Ashford University, an online school that has lost more than 50 percent of its students and is downsizing key faculty and academic administrators?

[Video above:  Dr. Stephen Brewer has reported on the downsizing of key faculty at Ashford and the suspension of the University Senate.]

Having seen so many crazy deals in subprime higher ed, from the ECMC shotgun marriage with Corinthian Colleges to the Kaplan-Purdue deal, anything seems possible.

"A bunch of state schools want online at scale at any cost."...(It's a) race to the bottom. They see their students heading to ASU, SNHU, or the for-profits, and figure if they can get to scale, they will have the time and resources to fix the programs."--anonymous online college expert

Tyton Partners managing director Trace Urdan has suggested that UMass or George Mason might buy Ashford from its parent company, Zovio, but I'm not sure either of those schools would take the risk. In my estimation, Zovio does not have the assets, such as cash on hand, for a safe conversion over the long run. And this lack of assets would make the buyer school more responsible for finances during the conversion.

In my opinion, the most logical buyer would be a school that is WASC accredited (Ashford's current accreditor), large enough to handle the risk, and either does not have a strong online presence or wants to expand its presence. It would also need a president/CEO strong enough and a board and faculty compliant or weak enough to take the bait.

It's possible that a hedge fund or other for-profit firm could create a non-profit specifically for the new school.

In the meantime, Dr. Brewer, is asking for accountability and justice for Ashford University students and professors.  After working at the school for a decade, he said that the situation had changed for the worse, "restricting creativity, inhibiting instruction, and demoralizing otherwise talented, motivated, and forward-thinking educators."

For any state university willing to scale up their online presence, be warned. The Kaplan-Purdue University Global deal is not working out, and Purdue bought Purdue Global for $1 and $50 million in free advertising.

Other subprime deals, such as the EDMC-Dream Center deal (Art Institutes, Argosy, South University), Adtalem-Cogswell (DeVry University), and Apollo Group-Apollo Global Management (University of Phoenix) appear to have panned out poorly. But that may not stop someone in the big business of higher ed from taking the risk.

Related article: There’s a Right Way to Convert to a Nonprofit. Ashford University Isn’t Following It (Bob Shireman, The Century Foundation)

Related article: Restructuring and Layoffs at Ashford (Lindsay McKenzie, Inside Higher Education)

Related article: The Next Purdue-Kaplan Deal? (Lindsay McKenzie, Inside Higher Education)

Related article: Early Troubles In The Purdue, Kaplan Marriage (Derek Newton, Forbes)

Related article: For-Profit Bridgepoint Says Its Colleges Will Become Non-Profit, But It Won’t (David Halperin, Republic Report)

State Colleges Seduced By For-Profit, Online Education (David Halperin, Republic Report)

The College Meltdown Index: Profiting from the Wreckage of American Higher Education

“Education, once defended as a public good, now functions as a vehicle for private gain.”

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From Collapse to Contagion

The College Meltdown never truly ended—it evolved.

After a decade of spectacular for-profit implosions, the higher education sector has reconstituted itself around new instruments of profit: debt servicing, edtech speculation, and corporate “partnerships” that disguise privatization as innovation.

The College Meltdown Index—tracking a mix of education providers, servicers, and learning platforms—reveals a sector in quiet decay.

Legacy for-profits like National American University (NAUH) and Aspen Group (ASPU) trade at penny-stock levels, while Lincoln Educational (LINC) and Perdoceo (PRDO) stumble through cost-cutting cycles.

Even the supposed disruptors—Chegg (CHGG), Udemy (UDMY), and Coursera (COUR)—are faltering as user growth plateaus and AI reshapes their value proposition.

Meanwhile, SoFi (SOFI), Sallie Mae (SLM), and Maximus (MMS) thrive—not through learning, but through the management of debt.

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The Meltdown Graveyard

Below lies a sampling of the education sector’s ghost tickers—the silent casualties of a system that turned public trust into private loss.

Symbol	Institution	Status	Approx. Closure/Delisting
CLAS.U	Class Technologies	Defunct	2024
INST	Instructure (pre-acquisition)	Acquired by Thoma Bravo	2020
TWOUQ	2U, Inc.	Bankrupt	2025
CPLA	Capella University	Merged with Strayer (Strategic Ed.)	2018
ESI-OLD	ITT Technical Institute	Defunct	2016
EDMC	Education Management Corporation	Defunct	2018
COCO-OLD	Corinthian Colleges	Defunct	2015
APOL	Apollo Education Group (U. of Phoenix)	Taken Private	2017

Each ticker represents not only a failed business model—but a generation of indebted students.

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The Phoenix That Shouldn’t Have Risen

No institution better symbolizes this moral decay than the University of Phoenix and Phoenix Education Partners (PXED).

At its height, Phoenix enrolled nearly half a million students. By 2017, following federal investigations and mass defaults, Apollo Education Group—its parent company—collapsed under scrutiny.

But rather than disappearing, Phoenix was quietly resurrected through a private equity buyout led by Apollo Global Management, Vistria Group, and Najafi Companies.

Freed from public oversight, the university continued to enroll vulnerable adult learners, harvesting federal aid while shedding accountability.

In 2023, the University of Idaho’s proposed acquisition of Phoenix provoked national outrage, forcing state officials to confront a basic question: Should a public university absorb a for-profit brand built on exploitation?

The deal collapsed—but the temptation to monetize Phoenix’s infrastructure remains. In 2025, a small portion became publicly traded.  Its call centers and online systems remain models of enrollment efficiency, designed to extract just enough engagement to secure tuition payments.

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From Education to Extraction

The sector’s transformation reveals a deeper moral hazard.

If students succeed, investors profit.
If students fail, federal subsidies and servicer contracts ensure the money keeps flowing.

Executives face no downside. Shareholders are protected. The losses fall on students and taxpayers.

In this sense, the “meltdown” is not a market failure—it’s a market design.

“The winners are those who most efficiently extract value from hope.”

Public universities increasingly partner with private Online Program Managers (OPMs), leasing their brands to companies that control marketing, pricing, and student data. The once-clear line between public and for-profit education has blurred beyond recognition.

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The Quiet Winners of Collapse

A few companies continue to prosper by aligning with “practical” or “mission-safe” sectors:

• Adtalem (ATGE) in nursing and health education,

• Grand Canyon Education (LOPE) in faith-branded online degrees,

• Bright Horizons (BFAM) in corporate childcare and workforce training.

Yet all remain heavily dependent on public dollars and tax incentives. The state subsidizes their existence; the market collects the rewards.

Meanwhile, 2U’s bankruptcy leaves elite universities scrambling to explain how a publicly traded OPM, once championed as the future of online learning, could disintegrate overnight—taking with it a network of high-priced “nonprofit” certificate programs.

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A Reckoning Deferred

The College Meltdown Index exposes a system that has internalized its own failures.
Fraud has been replaced by financial engineering, transparency by outsourcing, and accountability by spin.

The real collapse is not in the market—but in moral logic. Education, once the cornerstone of social mobility, has become a speculative instrument traded between hedge funds and holding companies.

Until policymakers—and universities themselves—confront the ethics of profit in higher education, the meltdown will persist, slowly consuming what remains of the public good.

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“The real question is not whether the system will collapse, but who will rebuild it—and for whom.”

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Sources:

• Higher Education Inquirer, College Meltdown 2.0 Index (Nov. 2025)

• SEC Filings (2010–2025)

• U.S. Department of Education, Heightened Cash Monitoring Reports

• An American Sickness – Elisabeth Rosenthal

• The Goosestep – Upton Sinclair

• Medical Apartheid – Harriet A. Washington

• Body and Soul – Alondra Nelson

• The Immortal Life of Henrietta Lacks – Rebecca Skloot

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

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

The Student as Collateral

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

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

Institutional Recklessness

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

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

A Nation at the Brink

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

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

Consumers or Victims?

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

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

No Exit Without Accountability

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

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

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

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

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

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

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

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

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Sources:

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

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

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

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

• National Center for Education Statistics

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