Neg Reg Day 2: Still Turning Borrowers into Political Pawns (Student Borrower Protection Center)

 

Day 2 of the U.S. Department of Education (ED)'s Neg Reg aimed at weaponizing Public Service Loan Forgiveness (PSLF) was… just as damning as Day 1. Here’s the recap: Session Summary: The session got SPICY right off the bat. ED began the day by presenting their newly revised language. Here are some key moments: Abby Shafroth, legal aid negotiator, stated CLEARLY for the record that this Neg Reg is not about protecting PSLF; it’s about the Department of Education (ED) using it as a tool to coerce nonprofits and universities to further the Trump Administration’s own goals. The government’s response was not convincing. Watch her remarks here. Betsy Mayotte, the negotiator representing consumers, brought more fire: “When reading the statute of PSLF, I don’t see where the Education Secretary has the authority to remove employer eligibility definition from a 501(c)(3) or government organization…but my understanding of the regulations and executive order is that they cannot be contrary to the statute. There are no ifs, ands, or buts under government or 501(c)(3).” Watch the exchange here. In a heated discussion on ED’s proposal to exclude public service workers who provide gender-affirming care to transgender minors, Abby further flagged that no one in the room had any medical expertise, so no one had qualifications to weigh in on medical definitions like “chemical and surgical castration.” The non-federal negotiators held a caucus to talk about large employers that fall under a single federal Employer Identification Number. They are CONCERNED that the extreme breadth of this rule could potentially cut out thousands of workers only because a subset of people work on issues disfavored by this Administration—all without any right to appeal. Negotiators plan to submit language that would allow employers to appeal a decision to revoke PSLF eligibility by ED. Borrowers and other experts and advocates came in HOT with public comment today—calling out ED for using this rulemaking to unlawfully engage in viewpoint discrimination and leave borrowers drowning in debt, unable to keep food on their tables, or provide for their families. Missing From the Table: Today, our legal director, Winston Berkman-Breen, who was excluded from the committee (but still gave powerful public comment yesterday!) has some thoughts on what was missing from the conversation: For two days now, negotiators have raised legitimate questions and important concerns about the Secretary of Education’s authority to disqualify certain government and 501(c)(3) employers from PSLF. And for two days now, ED’s neg reg staff—inlcuding the moderator!—have engaged in bad faith negotiations. Jacob, ED’s attorney, asserted that the Secretary has broad authority in its administration of the PSLF program—true, but only to an extent. The Secretary cannot narrow the program beyond the basic requirements set by Congress. When pushed for specific authority, Tamy—the federal negotiator—simply declined. It doesn’t stop there—ED representatives sidestepped, dismissed, or outright ignored negotiators’ questions and concerns. That’s because this isn’t a negotiation—it’s an exercise in gaslighting. ED is proposing action that exceeds the Secretary’s statutory authority and likely violates the U.S. Constitution—all the while telling negotiators to fall in line. The kicker? By pushing this proposal, ED itself is engaged in an activity with “substantial illegal purpose.” Let that sink in. Public Comment Mic  Drops: And Satra D. Taylor, a student loan borrower, Black woman, and SBPC fellow, who was also not selected by ED to negotiate, shared more thoughts during public comment: “I am disheartened and frustrated by what I have witnessed over the last few days… It has become clear that this Administration is intent on… making college once again exclusive to white, male, and wealthy individuals. These political attacks, disguised as rulemaking, are inequitable and target communities from historically marginalized backgrounds. The PSLF program has provided a vital incentive for Americans interested in serving our country and local communities, regardless of their political affiliation. The Department’s efforts to engage in rulemaking and to change PSLF eligibility are directly related to the goal of Trump’s Executive Order and exceed the Administration’s authority…”

Watch Satra's Public Comment

That’s it for Day 2, we’ll be back again tomorrow for the LAST DAY of this Neg Reg charade. In solidarity, Brandon Herrera Communications and Digital Strategist Student Borrower Protection Center

Trump’s Neg Reg to Weaponize Debt Is Here - Key Takeaways from Day 1 (Student Borrower Protection Center)

Back in March, President Trump announced an executive order to revoke Public Service Loan Forgiveness (PSLF) eligibility from public service workers employed at organizations engaged in work opposed by his administration—a blatantly illegal attempt to use public service workers as pawns in his right-wing political project to destroy civil society. Shortly after, the U.S. Department of Education (ED) announced its plans for a Negotiated Rulemaking (Neg Reg) process to put these dangerous policies into the PSLF regulations. Today marked Day 1 of the only 3-day committee session for this Neg Reg—and ED has already doubled down on this campaign to weaponize debt to silence speech that does not align with President Trump’s MAGA playbook: ED’s first draft of regulatory language, to put it bluntly, serves Trump’s fascist agenda. It empowers Secretary McMahon to block all government workers with student debt, including first responders, social workers, and teachers, from receiving PSLF in retaliation if she decides that a local or state government policy conflicts with her extreme, right-wing views on immigration, civil rights, or free speech. More on that here. ED excluded borrowers and key experts from the rulemaking committee. Despite overwhelming public demand for stronger borrower protections, discussions focused on weaponizing and restricting critical relief programs like PSLF. Session Summary: The day started off on a bad foot. Abby Shafroth, alternate negotiator for the Consumers, Legal Aid, and Civil Rights seat, requested to add a seat dedicated to civil rights because the proposed changes to PSLF directly affect the ability of marginalized communities to access higher education. Civil rights advocates Chavis Jones and Jaylon Herbin were present and ready to join the table—but ED denied the request. After this inaugural miscarriage of justice, most of the day was spent running through definitions outlined in ED’s proposed language. Does ED actually have the authority to exclude certain groups from PSLF when Congress has already specially outlined some but not others? Hint: they don’t. Who would be excluded from PSLF based on “illegal activities”? Would military members be excluded if the military were found in violation of state tort laws? If a city’s Health Department were specifically found guilty of substantial illegal activity, would all workers employed by that entire city be disqualified? Put plainly: ED did not have sufficient answers for these questions. At times, ED chastised negotiators for asking questions at “inappropriate times.” Other times, ED assured folks that everything would become clear once the Notice of Proposed Rulemaking language was issued. ED also refused to provide any examples of application of, or answer any “hypothetical” questions about their proposal. In our opinion, if you’re going to put forth a prospective rulemaking to decide the fate of millions of people, you should at the very least be able to explain how it would work. Missing From the Table: ED refused to seat Satra D. Taylor, a student loan borrower, Black woman, and SBPC fellow, who wants to know: “Why didn’t ED include anyone who would be most affected by these policy changes to negotiate—not a single public service worker, civil rights advocate, first responder, social worker, or teacher? Also, what is ED’s legal authority to propose these regulations in the first place? Congress defined in law that government and 501(c)(3) non-profit employers are categorically eligible for PSLF, and yet ED’s current proposal would exclude government and non-profit employers that it determines no longer engage in public service. This is a foundational issue for the Neg Reg, and ED refused to provide a clear answer.” Public Comment Mic  Drops: Our legal director, Winston Berkman-Breen (also excluded from the committee), called out ED during the public comment period: “Although this is not a serious proposal, it is a dangerous one. If the Administration has true concerns about whether employers across the country are engaged in unlawful activity, its law enforcement offices could conduct thorough investigations and then allow courts to determine the merits of those allegations. Instead, it has proposed letting the Secretary of Education police American society.”

Watch Winston's Full Comment

Thanks for following along. We’ll be back again tomorrow with Day 2 updates. In solidarity, Brandon Herrera Communications and Digital Strategist Student Borrower Protection Center

Will Maximus and Its Subsidiary AidVantage See Cuts?

Maximus Inc., the parent company of federal student loan servicer Aidvantage, is facing growing financial and existential threats as the Trump administration completes a radical budget proposal that would slash Medicaid by hundreds of billions of dollars and cut the U.S. Department of Education in half. These proposed changes could gut the very federal contracts that have fueled Maximus's revenue and investor confidence over the last two decades. Once seen as a steady player in the outsourcing of public services, Maximus now stands at the edge of a political and technological cliff.

The proposed Trump budget includes a plan to eliminate the Office of Federal Student Aid and transfer the $1.6 trillion federal student loan portfolio to the Small Business Administration. This proposed restructuring would remove Aidvantage and other servicers from their current roles, replacing them with yet-unnamed alternatives. While Maximus has profited enormously from servicing loans through Aidvantage—one of the major federal loan servicers—it is unclear whether the company has any role in this new Trump-led student loan regime. The SBA, which lacks experience managing consumer lending and repayment infrastructure, could subcontract to politically favored firms or simply allow artificial intelligence to replace human collectors altogether.

This possibility is not far-fetched. A 2023 study by Yale Insights explored how AI systems are already outperforming human debt collectors in efficiency, compliance, and scalability. The report examined the growing use of bots to handle borrower communication, account resolution, and payment tracking. These developments could render Maximus’s human-heavy servicing model obsolete. If the federal government shifts toward automated collection, it could bypass Maximus entirely, either through privatized tech-driven firms or through internal platforms that require fewer labor-intensive contracts.

On the health and human services side of the business, Maximus is also exposed. The company has long served as a contractor for Medicaid programs across several states, managing call centers and eligibility support. But with Medicaid facing potentially devastating cuts in the proposed Trump budget, Maximus’s largest and most stable contracts could disappear. The company’s TES-RCM division has already shown signs of unraveling, with anonymous reports suggesting a steep drop-off in clients and the departure of long-time employees. One insider claimed, “Customers are dropping like flies as are longtime employees. Not enough people to do the little work we have.”

Remote Maximus employees are also reporting layoffs and instability, particularly in Iowa, where 34 remote workers were terminated after two decades of contract work on state Medicaid programs. Anxiety is spreading across internal forums and layoff boards, as workers fear they may soon be out of a job in a shrinking and increasingly automated industry. Posts on TheLayoff.com and in investor forums indicate growing unease about the company’s long-term viability, particularly in light of the federal budget priorities now taking shape in Washington.

While Maximus stock (MMS) continues to trade with relative strength and still appears profitable on paper, it is increasingly reliant on government spending that may no longer exist under a Trump administration intent on dismantling large parts of the federal bureaucracy. If student loan servicing is eliminated, transferred, or automated, and Medicaid contracts dry up due to funding cuts, Maximus could lose two of its biggest revenue streams in a matter of months. The company’s contract with the Department of Education, once seen as a long-term asset, may become a political liability in a system being restructured to reward loyalty and reduce regulatory oversight.

The question now is not whether Maximus will be forced to downsize—it already is—but whether it will remain a relevant player in the new federal landscape at all. As artificial intelligence, austerity, and ideological realignment converge, Maximus may be remembered less for its dominance and more for how quickly it became unnecessary.

The Higher Education Inquirer will continue tracking developments affecting federal student loan servicers, government contractors, and the broader collapse of the administrative state.

Trump's Department of Education Continues to Drag Feet on Borrower Defense

On June 26th, the US Department of Education was brought to the Ninth District Court (and Judge Alsup) to show how many the Borrower Defense to Repayment cases that have been resolved per court order.  

While we wait for a transcript of the latest episode of Sweet v McMahon, what we can tell you is that the Trump government continues to drag its feet in paying back debtors who have been defrauded.  

According to Theresa Sweet:

“We really need Borrower Defense applicants included in both the full and post class of Sweet to send any denials to the Project on Predatory Student Lending. It’s important for the legal team to be able to track this and make sure there are no patterns of boilerplate denials or mass denials. It’s also really important to remember that if a Sweet class or post class member gets a denial it should include a Revise and Resubmit notice, which *must* be resubmitted on time or the denial becomes final unless the person takes it to court on their own.”

More than 950.000 student loan debtors have filed borrower defense fraud claims.

Harvard, Russia, and the Quiet Complicity of American Higher Education

In the fog of elite diplomacy and global finance, some of the United States' most prestigious universities—chief among them, Harvard—have long had entangled and often opaque relationships with authoritarian regimes. While recent headlines focus on China’s influence in higher education, far less attention has been paid to the role elite U.S. institutions have played in legitimizing, enabling, and profiting from post-Soviet Russia’s slide into oligarchy and repression.

The Harvard-Russia Nexus

Harvard University, through its now-infamous Harvard Institute for International Development (HIID), was a key player in Russia's economic transition following the collapse of the Soviet Union. During the 1990s, HIID, backed by millions of dollars in U.S. government aid through the U.S. Agency for International Development (USAID), provided advice on privatization and market reforms in Russia. This effort, touted as a cornerstone of democracy promotion, instead helped consolidate power among a small class of oligarchs, fueling the economic inequality and corruption that ultimately laid the foundation for Vladimir Putin's authoritarian rule.

Harvard’s involvement reached scandalous proportions. In 2001, the U.S. Department of Justice sued Harvard, economist Andrei Shleifer (a professor in Harvard's Economics Department), and others for self-dealing and conflict of interest. Shleifer and his associates were found to have used their insider access to enrich themselves and their families through Russian investments, all while supposedly advising the Russian government on behalf of the American taxpayer. Harvard eventually paid $26.5 million to settle the case.

Though the scandal damaged HIID's reputation and led to its closure, the broader complicity of the academic and financial elite in exploiting Russia’s vulnerability during the 1990s has received little sustained scrutiny.

Lawrence Summers and the Russian Connection

At the center of this story sits Lawrence Summers—a former Harvard president, U.S. Treasury Secretary, and one of the most powerful figures in the transatlantic economic order. Summers was both mentor and close associate of Andrei Shleifer. During the critical years of Russian privatization, Summers served as Undersecretary and later Secretary of the Treasury under President Clinton, while Shleifer operated HIID’s Russia project.

Despite the blatant conflict of interest, Summers never publicly disavowed Shleifer's actions. After returning to Harvard, he brought Shleifer back into the university’s good graces, protecting his tenured position and helping him avoid serious institutional consequences. This protection underscored the tight-knit nature of elite networks where accountability is rare and reputations are guarded like intellectual property.

Summers himself has invested in Russia through various vehicles over the years, and has held lucrative advisory roles with financial firms deeply enmeshed in post-Soviet economies. He also played an advisory role for Russian tech giant Yandex and has appeared at events sponsored by firms with deep Russian connections. While Summers has since criticized the Putin regime, his earlier role in enabling the very conditions that empowered it is seldom discussed in polite academic company.

A Broader Pattern of Complicity

Harvard is not alone. Institutions like Stanford, Yale, Georgetown, and the University of Chicago have produced scholars, consultants, and think tanks that helped construct the framework of neoliberal transition in Russia and Eastern Europe. These universities not only trained many of the Russian technocrats who later served in Putin’s government, but also quietly benefited from international partnerships, fellowships, and endowments tied to post-Soviet wealth.

Endowments at elite institutions remain shrouded in secrecy, and it is not always possible to trace the sources of foreign gifts or investments. But it’s clear that Russian oligarchs—many of whom owe their fortunes to the very privatization schemes U.S. economists championed—have made donations to elite Western universities or served on their advisory boards. Some sponsored academic centers and fellowships designed to burnish their reputations or reframe narratives about Russia’s transformation.

The Death of a Dissident

The failure of Western academic institutions to reckon with their role in Russia’s descent into authoritarianism became all the more glaring with the death of Alexei Navalny in February 2024. Navalny, a fierce critic of corruption and Putin’s regime, was imprisoned and ultimately killed for challenging the very system that U.S. advisers like those from Harvard helped engineer. While universities issued public statements condemning his death, few acknowledged the deeper complicity of their faculty, programs, and funders in building the oligarchic structures Navalny spent his life trying to dismantle.

Navalny repeatedly exposed how Russian wealth was funneled into offshore accounts and Western real estate, often aided by a global network of enablers—including lawyers, bankers, and academics in the West. His death is not just a symbol of Putin’s brutality—it is also a damning indictment of the institutions, both in Russia and abroad, that failed to stop it and, in many cases, profited along the way.

Where is the Accountability?

Despite the Shleifer scandal and Russia’s authoritarian consolidation, there has been no independent reckoning from Harvard or its peer institutions about their role in the failures of the 1990s or the long-term consequences of their economic evangelism. The neoliberal ideology that fueled these efforts—steeped in faith in free markets, minimal regulation, and elite technocracy—remains dominant in elite policy circles, even as it faces growing critique from both left and right.

Meanwhile, institutions like Harvard continue to influence global policy through their academic prestige, think tanks, and alumni networks. They remain powerful arbiters of truth—shaping how the public understands foreign policy, democracy, and capitalism—while rarely acknowledging their own entanglement in the darker chapters of globalization.

Elite Academia and Oligarchy

The story of Harvard and Russia is not just a tale of one institution’s failure; it is emblematic of the broader failure of elite American academia to confront its own role in the spread of oligarchy, inequality, and authoritarianism under the banner of liberal democracy. In an age when higher education is under increased scrutiny for its political and financial entanglements, the need for critical journalism and public accountability has never been greater.

The Higher Education Inquirer will continue to investigate these complex relationships—and demand transparency from the institutions that claim to serve the public good, while operating behind a veil of privilege and power. Navalny’s sacrifice deserves more than hollow statements. It requires a full accounting of how the system he died fighting was built—with help from the most powerful university in the world.

DeSantis-Led Coalition Launches New Accreditation Body: Ideology, Outcomes, and a Shift in Higher Ed Oversight

In a bold move that could upend the structure of higher education oversight in the United States, Florida Governor Ron DeSantis announced the creation of the Commission for Public Higher Education (CPHE)—a multi-state effort to challenge what he and his allies call the “activist-controlled accreditation monopoly.” The CPHE includes six Republican-led states: Florida, Georgia, North Carolina, South Carolina, Tennessee, and Texas.

Positioned as a new accrediting entity with a focus on “student outcomes, transparency, and ideological independence,” the CPHE represents a growing backlash against traditional regional accreditors like the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC). According to DeSantis and CPHE proponents, these longstanding organizations have prioritized diversity, equity, and inclusion (DEI) and other perceived progressive mandates over academic quality, workforce readiness, and measurable outcomes.

The Political Context

Governor DeSantis has made higher education a central battleground in his broader cultural agenda, particularly since his administration launched efforts to eliminate DEI offices, weaken tenure protections, and reshape public university boards. The CPHE fits neatly into that larger campaign—what DeSantis calls “reclaiming higher education.”

“We’re breaking the stranglehold of the accreditation cartel,” DeSantis said in Boca Raton. “Florida is leading the way in building an education system based on results, not ideology.”

The effort is being coordinated with support from public university systems across the South, including the University of South Carolina and the University Systems of Georgia and Texas. University of South Carolina Board Chair Thad Westbrook praised the new accreditor’s “outcomes-based” framework, stating it will “benefit students while making accreditation more efficient.”

A Threat to the Federal Gatekeeping System?

Accreditation in the U.S. plays a crucial gatekeeping role: it determines whether institutions are eligible to receive federal student aid, including Pell Grants and federally backed student loans. For CPHE to have any real impact, it must eventually be recognized by the U.S. Department of Education.

That recognition is far from guaranteed. The process requires years of documentation, reviews, and approvals—and federal education officials may view CPHE’s openly political roots as problematic. Critics argue the consortium is more about ideological conformity than educational quality.

Risks and Ramifications

While the CPHE claims to offer a “rigorous” and “transparent” alternative to traditional accreditation, skeptics—including some education policy analysts and faculty advocates—warn that the real motive is political control over higher education institutions. By tying accreditation to a specific ideological framework, opponents fear that academic freedom, faculty governance, and research independence could be undermined.

There are also practical concerns. Should CPHE institutions lose recognition by federal agencies or face lawsuits over inconsistent standards, students could suffer the consequences—especially those relying on financial aid or seeking degrees with recognized accreditation.

Moreover, CPHE's narrow focus on "student outcomes" often means post-graduate earnings or job placement, metrics that oversimplify complex educational goals and ignore broader social and civic benefits of higher education.

A Test of Federalism in Higher Ed

This development marks an escalation in the state-federal tug-of-war over higher education. With the U.S. Supreme Court increasingly supportive of state autonomy, and with Congress gridlocked, states like Florida are testing how far they can go in reshaping public education under a conservative vision.

The CPHE may become a flashpoint in the national debate over what public universities are for—and who gets to decide. Whether this initiative results in meaningful improvement or becomes another chapter in the politicization of higher education remains to be seen.

Murky Waters 2: Ambow Education, Chinese Influence, and US Edtech, 2013-2025

In Chinese culture, there’s an old proverb: “混水摸鱼” — “In murky waters, it is easier to catch fish.” The lesson is clear: confusion and opacity benefit those looking to manipulate outcomes for personal gain. In politics, finance, and international affairs, it is a warning. In the case of Ambow Education Holding Ltd., it may be a roadmap.

On June 26, 2025, Ambow announced a partnership with the tiny University of the West (UWest), a Buddhist college in Rosemead, California, enrolling just 153 students. The deal will implement Ambow’s HybriU platform—a so-called “phygital” learning solution combining digital and physical education delivery—positioning the technology as a tool for expanding U.S. academic access to international students. But a closer look reveals a story less about educational innovation than about power, soft influence, and the financialization of struggling institutions.

Ambow, a Cayman Islands–registered and formerly Beijing-based EdTech firm, has quietly entrenched itself in U.S. higher education. While other sectors of the U.S. economy—especially semiconductors and AI—have become more cautious of Chinese-linked investment due to national security concerns, American higher education remains notably exposed. The Ambow-UWest partnership exemplifies that vulnerability.

This is not Ambow’s first foray into U.S. academia. In 2013, the company was delisted from the New York Stock Exchange and liquidated after accusations of accounting irregularities. Rebranded and restructured offshore, Ambow re-entered the market, acquiring distressed for-profit colleges. In 2017, it bought Bay State College in Boston. Three years later, Massachusetts fined the school $1.1 million for fraudulent advertising, inflated placement rates, and illegal telemarketing. The school shuttered in 2023 after eliminating key services, including its library, and squandering pandemic-era federal aid.

In 2020, Ambow acquired the NewSchool of Architecture and Design in San Diego. Since then, NewSchool has appeared on the U.S. Department of Education’s Heightened Cash Monitoring 2 list, signifying severe financial instability. Lawsuits followed, including one for unpaid rent and another over compensation disputes involving the school’s former president.

Still, Ambow continues to market itself as a leader in “AI-driven” phygital innovation. HybriU, its flagship platform, has been promoted at edtech and investor conferences like CES and ASU-GSV, with lofty promises about immersive education and intelligent classrooms. But the evidence is thin. The platform’s website contains vague marketing language, no peer-reviewed validation, no public client list, and stock images masquerading as real users. Its core technology, OOOK (One-on-One Knowledge), was piloted in China in 2021 but shows no signs of adoption by credible U.S. institutions.

Why, then, would a college like University of the West—or potentially a major public institution like Colorado State University (CSU), reportedly exploring a partnership with Ambow—risk associating with such an entity?

To understand the stakes, we must follow the money and the power behind the brand.

Ambow’s largest shareholder bloc is controlled by Jian-Yue Pan (aka Pan Jianyue), a Chinese executive with deep ties to the country’s tech and investment elite. Pan is general partner of CEIHL Partners I and II, two Cayman Islands entities that control roughly 26.7 percent of Ambow’s publicly floated Class A shares. He also chairs Uphill Investment Co., which is active in the semiconductor and electronics sectors, and holds board positions in tech firms with connections to Tsinghua University—one of China’s premier talent pipelines for its national strategic industries.

Pan’s voting control over Ambow gives him sweeping influence over its corporate decisions, executive appointments, and strategic direction. His role raises critical concerns about the use of U.S. higher education infrastructure as a potential channel for data access, market expansion, and soft geopolitical influence.

To further legitimize its U.S. operations, Ambow recently appointed James Bartholomew as company president. Bartholomew’s resume includes controversial stints at DeVry University and Adtalem Global Education. While at DeVry, the institution was fined $100 million by the FTC for deceptive marketing. At Adtalem, he oversaw operations criticized for offshore medical schools and active resistance to gainful employment regulations.

Even Ambow’s financial underpinnings are suspect. Its R&D spending hovers around $100,000 per quarter—trivial for a firm purporting to lead in AI and immersive tech. Its audits are performed by Prouden CPA, a virtually unknown Chinese firm, not one of the major global accounting networks. These red flags suggest not a dynamic tech company, but a shell operation kept afloat by hype, misdirection, and strategic ambiguity.

That makes its ambitions in U.S. public education all the more dangerous.

Reports that Colorado State University—a land-grant institution managing sensitive federal research—may be considering a partnership with Ambow should prompt urgent scrutiny. Has CSU conducted a full cybersecurity and national security risk assessment? Have university stakeholders—faculty, students, and the public—been involved in the review process? Or is the university racing blindly into an agreement driven by budget pressures and buzzwords?

American higher education has long been susceptible to bad actors promising solutions to enrollment declines and funding shortfalls. But in recent years, the cost of these decisions has grown. With campuses increasingly dependent on international student tuition and digital platforms, the door has opened to exploitative operators and geopolitical influence.

Ambow has already shuttered one U.S. college. Its remaining campus is on shaky footing. Its technology lacks serious vetting. Its leadership is tethered to past scandals. And its largest shareholder has interests far beyond education.

This is not just about Ambow. It is about the structural vulnerabilities in American higher education—an industry ripe for manipulation by financial speculators, tech opportunists, and foreign actors operating with impunity. The murky waters of privatized, digitized education reward those who operate without transparency.

Public universities must remember who they serve: students, faculty, and the public—not offshore shareholders or unproven platforms.

If Colorado State or any other institution moves forward with Ambow, they owe the public clear answers: What protections are in place? What risks are being considered? Who really controls the platforms delivering instruction? And most importantly, why are public institutions turning to unstable, opaque companies for core educational delivery?

As the proverb reminds us, murky waters are fertile ground for hidden agendas. But education, above all, demands clarity, integrity, and public accountability.

---

Sources:

• SEC filings and 20-F reports: sec.gov

• Massachusetts Attorney General settlement with Bay State College, March 2020

• Federal Trade Commission settlement with DeVry University, December 2016

• U.S. Department of Education Heightened Cash Monitoring List

• NYSE delisting notices, 2013

• CES and ASU-GSV conference archives, 2023–2024

• Corporate data from MarketScreener and CEIHL Partners

• Ambow’s 2023 Annual Report and quarterly 6-K filings

Disruption to Power: SoFi’s Ascendance in the Student Loan Industrial Complex

In the shadow of America’s $1.6 trillion student debt crisis, a once-disruptive fintech startup has transformed into a dominant force in the education-finance nexus. SoFi, short for Social Finance, Inc., began in 2011 as a Stanford alumni experiment to refinance student loans for well-off students. Today, it is a publicly traded financial firm with a national bank charter, major marketing campaigns, and increasing influence in Washington, D.C.

SoFi presents itself as a modern financial ally, promising to help borrowers achieve independence and long-term wealth. But beneath its sleek branding lies a business model that benefits most from refinancing the federal student debt of high-earning professionals. This approach has left millions of vulnerable borrowers behind—those who don’t attend elite institutions, who work in low-paying or public-service jobs, or who are first-generation students with higher default risks.

The core of SoFi’s business depends on moving borrowers out of the federal student loan system, where they’re entitled to income-driven repayment plans and possible loan forgiveness. Once these loans are refinanced with SoFi, those protections vanish. Private loans with SoFi offer no forgiveness options, limited hardship forbearance, and terms that shift with the whims of the financial markets. While this may work for doctors and lawyers with stable incomes, it’s a precarious arrangement for most Americans saddled with educational debt.

Over the past few years, SoFi has done more than just expand its loan offerings. It has aggressively stepped into the political arena. In 2023, the company sued the U.S. Department of Education, arguing that the federal student loan payment pause hurt its profits by reducing demand for refinancing. This legal move highlighted SoFi’s priorities and sparked public criticism, especially from borrower advocates who saw the company as putting its bottom line above public relief.

SoFi’s lobbying efforts have expanded alongside its ambitions. As federal policymakers debated student loan forgiveness and payment pause extensions, SoFi worked behind the scenes to influence the outcome in its favor. The company also lobbied to shape regulations around its other financial services, including personal loans, investing products, and even cryptocurrency offerings.

In 2022, SoFi reached a major milestone when it received a national bank charter. This shift allowed the company to operate more like a traditional bank, accepting deposits and issuing loans directly. While this expanded SoFi’s profit potential, it also blurred the lines between the fintech startup it once was and the entrenched financial institutions it claimed to disrupt.

Despite its diversification into broader financial services, student loan refinancing remains a major part of SoFi’s revenue. That core product reflects a broader trend in American higher education: a two-tiered system where financial tools are increasingly tailored to those who are already advantaged. SoFi’s ideal borrower is someone with high credit, high income, and a degree from a prestigious school. Meanwhile, millions of others—disproportionately Black and Latino borrowers, women, first-generation students, and those who left school without graduating—remain stuck in cycles of debt that SoFi has little incentive to address.

While legacy loan servicers like Navient and Nelnet have faced criticism and regulatory scrutiny, newer fintech players like SoFi have largely avoided such attention. With their slick apps, celebrity endorsements, and polished messaging, they appear modern and benevolent. But their growing influence over student lending policy and their efforts to shape federal loan programs raise serious concerns about whose interests they truly serve.

As political debates continue over the future of student debt relief, SoFi is positioning itself to thrive no matter the outcome. Its success tells a larger story about the privatization of higher education finance and the quiet consolidation of power by private firms in what was once seen as a public good.

The Higher Education Inquirer will continue to report on the forces reshaping higher ed finance. In the case of SoFi, the question remains: is this innovation—or exploitation?

House Select Committee Seeks Answers to Chinese Communist Party -Linked Bioagent Smuggling at the University of Michigan

WASHINGTON, D.C. — This week, Chairman Moolenaar of the Select Committee on China, Chairman Walberg of the Committee on Education and the Workforce, and Chairman Babin of the Committee on Science, Space, and Technology sent two letters investigating the potential agroterrorism incident in Michigan earlier this month.

The first urges the National Institute of Health and the National Science Foundation to review grants awarded to two University of Michigan professors whose labs hosted Chinese nationals recently charged by the Department of Justice with smuggling biological materials.

"The Committees found that Jian and Liu conducted research under the supervision of, or in concert with, UM professors funded by the National Institutes of Health (NIH) and the National Science Foundation (NSF). It is our position that Chinese researchers tied to the PRC defense research and industrial base have no business participating in U.S. taxpayer-funded research with clear national security implications—especially those related to dangerous biological materials," says the first letter.

The letter reveals that the Chinese nationals were tied to professors who received approximately $9.6 million in federal research funding.

The second requests information directly from the University of Michigan regarding its oversight, compliance practices, and any internal reviews related to those individuals. It comes after previous research security concerns were raised regarding the university's relationships to the People's Republic of China (PRC).

Earlier this year, the university announced it had closed its joint institute with Shanghai Jiao Tong University following a letter from Chairman Moolenaar that outlined the school's ties to Chinese military modernization efforts.

"We are deeply alarmed about recent reports and related criminal charges involving Chinese nationals with direct ties to the Chinese Communist Party (CCP) allegedly smuggling dangerous biological materials into the United States for use at UM laboratories," the letter writes. "Given the recent criminal charges within the span of a week, the Committees have respectfully urged the NIH and NSF to initiate a full review of any grants related to these incidents. To support this effort, we request that UM produce all documents and records of any due diligence, investigations, or other reviews—conducted by or on behalf of UM—concerning conflicts of interest or commitment involving any UM faculty, researchers, or individuals granted access to UM facilities."

The letters were signed by twenty-five Members of Congress from the three committees.

Read the letter to the National Institute of Health (NIH) and National Science Foundation (NSF) here.

Read the letter to the University of Michigan here.

Tracking the Elusive Truth: The Higher Education Inquirer Seeks Decades of Bankruptcy Loan Forgiveness Data

In a modest but potentially revealing inquiry, the Higher Education Inquirer has submitted a Freedom of Information Act (FOIA) request to the U.S. Department of Education asking for a count of the number of student loans discharged in bankruptcy from 1965 to 2024. The request, dated June 10, 2025, was acknowledged the same day by the Department’s FOIA Service Center under FOIA Request No. 25-03954-F.

“The Higher Education Inquirer is requesting a count of the number of student loans forgiven in bankruptcy per year from 1965 to 2024.”

It’s a simple request with profound implications. While the nation debates student loan forgiveness through executive action and legislative reforms, the forgotten path of bankruptcy discharge—once a legally viable option for debt relief—has been quietly buried over the past several decades.

A Timeline of Restriction: The Death of Bankruptcy Relief

When the Higher Education Act of 1965 established federal student loans, they were treated like other forms of consumer debt. Borrowers could, in principle, discharge them through bankruptcy just like credit card debt or medical bills.

But that began to change in the late 1970s, as concerns over potential abuse of the system gained traction in Congress. In 1976, a new law prohibited the discharge of federal student loans in bankruptcy within the first five years of repayment unless the borrower could prove “undue hardship”—a vague standard that was rarely met.

From there, the restrictions only grew tighter:

• 1990: The waiting period for dischargeability was extended to seven years.

• 1998: The option to discharge federal student loans in bankruptcy for any reason other than “undue hardship” was eliminated entirely. This meant student loan borrowers had to meet the strict and often inaccessible hardship standard at all times.

• 2005: Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), Congress extended the “undue hardship” requirement to most private student loans as well—effectively removing nearly all forms of bankruptcy relief from the table for student debtors.

These changes did not result from clear evidence of widespread abuse. Rather, they were fueled by myths of “deadbeat graduates” walking away from their obligations and by lobbying from banks, guaranty agencies, and debt collection firms that profited from non-dischargeable debt. Meanwhile, evidence of hardship among borrowers grew, especially for those who attended predatory for-profit colleges or dropped out without a degree.

The Brunner Barrier

The biggest obstacle for borrowers remains the so-called “Brunner test,” a three-prong legal standard established in a 1987 court case, Brunner v. New York State Higher Education Services Corp. It requires borrowers to prove:

1. They cannot maintain a minimal standard of living if forced to repay the loans,

2. Their financial situation is unlikely to improve, and

3. They made a good-faith effort to repay the loans.

Many judges interpreted these criteria narrowly, creating a virtually insurmountable hurdle. Borrowers with severe disabilities, advanced age, or long-term unemployment have been denied relief even when destitute.

What We Still Don’t Know

Despite these legal developments and the hardship they created, data on how many people have succeeded in discharging their student loans through bankruptcy remains remarkably scarce. Advocacy groups and journalists have long questioned why no federal agency tracks this information in a clear, public-facing format.

That’s what prompted the Higher Education Inquirer’s FOIA request—an effort to establish a factual baseline. We asked the Department of Education for an annual count of bankruptcy discharges involving student loans over a 60-year period, from 1965 to 2024.

The Bureaucratic Wall

According to the Department’s FOIA Service Center, the average processing time for such requests is currently 185 business days—about nine months. While the Department did not ask for clarification immediately, it reserves the right to do so within ten business days. Failure to respond to such a request would result in administrative closure of the FOIA—yet another form of delay that keeps the public in the dark.

This bureaucratic stonewalling is part of a larger pattern. While the Department of Education has been quick to announce student loan forgiveness programs under executive orders or settlement agreements, it remains reluctant to shine a light on longstanding failures—especially the erosion of legal remedies like bankruptcy.

A Step Toward Truth and Accountability

The public deserves a clear view of the history and consequences of stripping bankruptcy protections from student borrowers. It’s not just a legal matter—it’s a story of systemic neglect, political pressure, and financial exploitation. Without access to historical data, reform remains a guesswork operation and accountability remains elusive.

We at the Higher Education Inquirer will continue to press for answers. If and when the FOIA request is fulfilled, we will publish the data and conduct a thorough analysis, year by year. We believe that exposing the truth about student loan bankruptcy isn’t just a matter of curiosity—it’s a step toward justice.

If you have experience with student loan bankruptcy, data that could assist our investigation, or simply want to share your story, contact us at gmcghee@aya.yale.edu.