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

Divestment from Predatory Education Stocks: A Moral Imperative

Calls for divestment from exploitative industries have long been part of movements for social and economic justice—whether opposing apartheid, fossil fuels, or private prisons. Today, another sector demands moral scrutiny: the network of for-profit education corporations and student loan servicers that have turned higher learning into a site of mass indebtedness and despair. From predatory colleges to the companies that profit from collecting on student debt, the system functions as a pipeline of extraction. For those who believe education should serve the public good, the issue is not merely financial—it is moral.

The Human Cost of Predatory Education

For decades, for-profit college chains such as Corinthian Colleges, ITT Tech, the University of Phoenix, DeVry, and Capella targeted low-income students, veterans, single parents, and people of color with high-pressure marketing and promises of career advancement. These institutions, funded primarily through federal student aid, often charged premium tuition for substandard programs that left graduates worse off than when they began.

When Corinthian and ITT Tech collapsed, they left hundreds of thousands of students with worthless credits and mountains of debt. But the collapse did not end the exploitation—it simply shifted it. The business model has re-emerged in online form through education technology and “online program management” (OPM) firms such as 2U, Coursera, and Academic Partnerships. These firms, in partnership with elite universities like Harvard, Yale, and USC, replicate the same dynamics of inflated costs, opaque contracts, and limited accountability.

The Servicing of Debt as a Business Model

Beyond the schools themselves, student loan servicers and collectors—Maximus, Sallie Mae, and Navient among them—have built immense profits from managing and pursuing student debt. Sallie Mae, once a government-sponsored enterprise, was privatized in the 2000s and evolved into a powerful lender and loan securitizer. Navient, its spinoff, became notorious for deceptive practices and aggressive collections that trapped borrowers in cycles of delinquency.

Maximus, a major federal contractor, now services defaulted student loans on behalf of the U.S. Department of Education. These companies profit directly from the misery of borrowers—many of whom are victims of predatory schools or structural inequality. Their incentive is not to liberate students from debt, but to sustain and expand it.

The Role of Institutional Investors

The complicity of institutional investors cannot be ignored. Pension funds, endowments, and major asset managers have consistently financed both for-profit colleges and loan servicers, even after repeated scandals and lawsuits. Public sector pension funds—ironically funded by educators—have held stock in Navient, Maximus, and large for-profit college operators. Endowments that pride themselves on ethical or ESG investing have too often overlooked education profiteering.

Investment firms like BlackRock, Vanguard, and State Street collectively hold billions of dollars in these companies, stabilizing an industry that thrives on the financial vulnerability of students. To profit from predatory education is to participate, however indirectly, in the commodification of aspiration.

Divestment as a Moral and Educational Act

Divesting from predatory education companies and loan servicers is not just an act of conscience—it is an educational statement in itself. It affirms that learning should be a vehicle for liberation, not a mechanism of debt servitude. When universities, pension boards, and faith-based investors divest from corporations like Maximus, Navient, and 2U, they are reclaiming education’s moral purpose.

The divestment movement offers a broader civic lesson: that profit and progress are not synonymous, and that investment must align with justice. Faith communities, student debt activists, and labor unions have made similar stands before—against apartheid, tobacco, and fossil fuels. The same principle applies here. An enterprise that depends on deception, coercion, and financial harm has no place in a socially responsible portfolio.

A Call to Action

Transparency is essential. Pension boards, university endowments, and foundations must disclose their holdings in for-profit education and student loan servicing companies. Independent investigations should assess the human consequences of these investments, particularly their disproportionate impact on women, veterans, and people of color.

The next step is moral divestment. Educational institutions, public pension systems, and religious organizations should commit to withdrawing investments from predatory education stocks and debt servicers. Funds should be redirected to debt relief, community college programs, and initiatives that restore trust in education as a public good.

The corporate education complex—spanning recruitment, instruction, lending, and collection—has monetized both hope and hardship. The time has come to sever public and institutional complicity in this cycle. Education should empower, not impoverish. Divestment is not merely symbolic—it is a declaration of values, a demand for accountability, and a reaffirmation of education’s original promise: to serve humanity rather than exploit it.

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Sources:

• U.S. Department of Education, Borrower Defense to Repayment Reports

• Senate HELP Committee, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success (2012)

• Consumer Financial Protection Bureau (CFPB) enforcement actions against Navient and Sallie Mae

• The Century Foundation, Online Program Managers and the Public Interest

• Student Borrower Protection Center, Profiting from Pain: The Financialization of the Student Debt Crisis

• Higher Education Inquirer archives

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

AFT President Selling Out to Edtech?

American Federation of Teachers (AFT) President Randi Weingarten is scheduled to speak at the upcoming ASU-GSV summit. For 16 years, the conference has been a space for those in edtech to hype their ideas, both good and bad.  We have noted a few of these bad ideas from bad actors over the years, to include 2U, Guild, and Ambow Education. 

Given Weingarten's track record as President of AFT, we don't expect much from her in terms of speaking truth to power. There are many people in edtech that Weingarten should criticize at the summit. But she is too much of a politician to do such a thing when it is needed.  

Weingarten has been the President of AFT since 2008, a union with about 1.7 million members across the US. While AFT has had some victories, those victories were won by the rank-and-file and the hard work of AFT organizers, not due to the actions of Weingarten. With numbers that large, AFT could pose as a serious presence at demonstrations in DC and across the nation. They have done that, when they had to, but not when other folks' lives were at stake. 

In 2013, while Weingarten was President of AFT, we recommended that the union use its clout to tell teachers' pension programs and state retirement funds from investing in for-profit colleges like Corinthian Colleges, Education Management Corporation, ITT Tech, and the University of Phoenix. They refused. We have not forgotten how AFT was unwilling to defend consumers, student debtors, and retirees. 

Since that time, AFT has done little to defend folks against subprime robocolleges and online program managers like 2U and Academic Partnerships/Risepoint when they certainly needed to call them out. And now their ranks are full of educators and administrators with marginal online degrees.

An Email of Concern to the People of Arkansas about the University of Phoenix (Tarah Gramza)

February 26, 2023. 

Hi! My name is Tarah Gramza. Dahn Shaulis has been talking with me about the University of Phoenix/University of Arkansas situation. I offered to share my knowledge as I have quite a bit with years of experience in this mess of subprime colleges and student loan debt.  

I am the creator/administrator of a quite popular Facebook group with approximately 14,000 members. Theresa Sweet and I came together by sheer accident and became close friends. We have managed this group together for a few years now. 

Theresa started her battle with the US Department of Education (aka ED) nearly a decade ago trying to get anyone’s attention to hear her story and draw attention to the fraud being committed by these schools right under everyone’s noses. Our stories are all similar: we attended schools who promised a future full of butterflies and roses, misled quality of education, pressured enrollment, false advertised job placement, lied about costs...the list goes on. 

Following the bread crumbs

Our lawsuit started as a mission to hold the Department of Education accountable for delaying the processing of Borrower Defense to Repayment applications. These delaying actions broke ED's own rules and regulations. The last several administrations tried to change rules for their own agendas and to satisfy their paid cronies. We know for a fact many congressional leaders have been deeply invested and made millions from this for-profit schools fraud. This includes the Secretary of Education at the time, Betsy DeVos. 

The first settlement forced ED to process applications fairly within a period of time. The department made a big mistake, they decided to deny 90% of class members applications and used illegal denial letters, which ultimately stopped the settlement and sent us back to litigation/discovery. During the discovery it was uncovered that ED had internal emails showing they were intentionally not reviewing applications per the law requirement (a policy of mass denial), withheld evidence by the department on many of the main culprit schools, and knew about the fraud being committed at the highest levels. This led to additional claims by the class and now opened the department up for direct financial liability and undue harm. This led to the final settlement that sits today. 

Between the first settlement and the illegal denials and the present one, the administrations changed and Betsy DeVos quit her job. During the discovery (testimony) it was found that upper leadership under Betsy DeVos pointed their fingers directly at Betsy herself and that she directed these policies, an attempt was made to make her testify. As government always does, they protected her and their own tails in the process and she was allowed to skate by unscathed. The new administration decided it was time to start doing the right thing; the sheet was pulled back enough for everyone to see they well knew about the fraud for over a decade. 

This lawsuit also brought forward the fact that ED had not used its own rules to go after schools for recoupment costs on the taxpayers behalf and recoup funds from these executives, schools, leaders. This includes some of the leaders of major school collapses such as Corinthian Colleges and ITT Tech. Sadly, the executives just jumped from one school to the next bringing their fraud with them along the way, leaving a wake of schools with damaged students. 

Putting it together

The final settlement (Sweet v Cardona) was signed and all of a sudden four schools from the list of 151 known offender schools decided to intervene on the lawsuit. They used every excuse they could to conjure up to stop this case and hold up the settlement--even though the settlement didn’t hold them accountable for the class discharged claims. The judge ultimately denied their requests leading a final settlement approval. Three of those four schools then appealed the judge for a stay,which was officially denied Friday evening. 

Why would four schools appeal a lawsuit that doesn’t involve them of which ultimately has no recoupment against them for the class?

Well- here’s why, the post class group AND any following applications will have recoupment. The department, right around the time of the announcement, had recently announced the recoupment efforts against Devry University and this terrified the schools. They knew full well they were next and that it would put them out of business and these shareholders would be left holding the bag. Now a plan needed to be put into place to try to find a way out. 

The plan

University of Phoenix is one the biggest offenders and probably one the largest schools to profit from this business model of fraud. We’ve seen evidence that much of the fraudulent activity came directly out of the University of Phoenix training manuals. They also had some of biggest lawsuits, so intervening as University of Phoenix was a bad idea. 

The well-known school lobbying group Career Education Colleges and Universities (CECU) led by Jason Altmire banded together to not only bundle money from these subprime schools to stop this lawsuit, by using these four smaller less widely known, less lawsuits, as pawns in a bigger game. Jason has been known and deeply ingrained in this scandal for over 20 years, even before he was lobbying. He was an elected official voting for this for profit game. Holding up the lawsuit benefited every single school named on Exhibit C and you will see why below. 

The new rules and regulations were published a few months back with hard targeted rules that establish a line in the sand starting July 2023. These regs held harsh consequences for all schools not only into the future but also for past bad deeds. The rules also clarified and hardened the rules for information sharing (evidence) and group discharges. 

It became apparent that the shareholders and owners of University of Phoenix needed out and now. This is because the recoupment efforts follow owners. If they can sell the school, they can cash out what is left of their $1 Billion investment and run intact. Which leads to the point of this email, if Arkansas, or any other buyer decides to buy University of Phoenix they will be the target for the recoupment efforts which I estimate to be approximately $600M dollars as it stands today with the number pending recoupable borrower defense applications. If things go as expected this number could exceed $1B. The rules call for recoupment of funds and also steep consequences such as loss of title IV funds. 

Jason Altmire and his lobbying group are so desperate to prevent these rules, they are suing in Texas to prevent them from being implemented.

Why would the Governor of Arkansas pursue this deal?

The Governor of Arkansas knows full well the risks. The political side of this story is administrations. Republican administrations have been very friendly to these schools and have in the past created and changed ED rules in the schools favor and turned a blind eye to the fraud. Democrats have also been guilty of this but in today’s climate we have to think of the present state of the Republican position in student debt relief. The state of Arkansas is offered a sweet deal of a percent of profits on a private deal which they claim doesn’t cost tax payers. 

The hidden agenda by the governor is she is gambling against a change in administration that is friendlier and will either not pursue recoupment against a state owned (affiliated) school OR she is thinking the Biden administration will lose the next election in which they will push to change the rules again! This is a steep gamble as I suspect the secrets in this deal don’t offer protections to the state as presented in press briefings. If the state is signing a contract for profits, what happens if the school goes under? As you may be aware, much of these warnings have been shared with the leadership of Arkansas by many student advocate groups including our lawyers for the Sweet case, the Project on Predatory Student Lending-PPSL. 

Recent announcements made by the Department of Education have added an additional layer of risk for anyone purchasing University of Phoenix as ED recently announced it “may require certain individuals to assume personal liability as a condition of allowing the schools they own or operate to participate in the federal financial aid programs and likely to require an individual to assume personal liability on behalf of the institutions or groups of affiliated institutions that pose the largest financial risk to the United States. This is determined based on institutions with the most serious and significant sets of concerns.” The question becomes, who will be putting their personal assets as collateral? University of Phoenix is not only a risk, it is one the primary reasons for the need for additional protections to the tax payers.

What value would the purchase of University of Phoenix have to the state of Arkansas if it can’t have its Title IV renewed? This fact alone combined with the University of Phoenix history, should scare away even the most riskiest investor!

Now you know the big picture. I hope it helps guide your actions and I hope you are willing to write and share with the public how this dangerous gamble is being wagered against the people of the state of Arkansas. For the records, I am a Republican and my focus is to point to facts of the situation and the truth of the climate in politics leads toward the assessment I’ve given. Let me know if you have any questions. I’m happy to help where I can. I also hold a large document that provides significant evidence against all the schools but the University of Phoenix file speaks volumes and will likely expand on the depth of the fraud, if you are interested.

Sincerely,

Tarah Gramza