Higher Education Inquirer Selected Archive (2016-2023)

In order to streamline the Higher Education Inquirer, we have removed the HEI archive from the right panel of the blog; information that could only be seen in the non-mobile format.   

The HEI archive has included a list of important books and other sources, articles on academic labor, worker movements, and labor actions, student loan debt, debt forgiveness, borrower defense to repayment and student loan asset-backed securities, robocolleges, online program managers, lead generators, and the edtech meltdown, enrollment trends at for-profit colleges, community colleges, and small public and private universities, layoffs and closings of public and private institutions, consumer awareness and organizational transparency and accountability, neoliberalism, neo-conservativism, neo-fascism and structural racism in higher education, and strategic corporate research.  

HEI Resources  
Rutgers University Workers Waging Historic Strike For Economic Justice (Hank Kalet)Borrower Defense Claims Surpass 750,000. Consumers Empowered. Subprime Colleges and Programs Threatened.I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers)
Erica Gallagher Speaks Out About 2U's Shady Practices at Department of Education Virtual Listening Meeting
An Email of Concern to the People of Arkansas about the University of Phoenix (Tarah Gramza)
University of California Academic Workers Strike for Economic Justice
The Power of Recognizing Higher Ed Faculty as Working-Class (Helena Worthen)
More Transparency About the Student Debt Portfolio Is Needed: Student Debt By Institution
Is Your Private College Financially Healthy? (Gary Stocker)
The College Dream is Over (Gary Roth)
"Edugrift": Observations of a Subprime College Lead Generator (by J.D. Suenram)
The Tragedy of Human Capital Theory in Higher Education (Glen McGhee)
Let's all pretend we couldn't see it coming (US Working Class Depression)
A preliminary list of private colleges at risk
The Growth of Robocolleges and Robostudents
A Letter to the US Department of Education and Student Loan Servicers on Behalf of Student X (Heidi Weber)
The Higher Education Assembly Line
College Meltdown Expands to Elite Universities
The Slow-Motion Collapse of America’s Largest University
What happens when Big 10 college grads think college is bullsh*t?
Coronavirus and the College Meltdown
Academic Capitalism and the next phase of the College Meltdown
When College Choice is a Fraud
Charlie Kirk's Turning Point Empire Takes Advantage of Failing Federal Agencies As Right-Wing Assault on Division I College Campuses Continues
Navient and the Zombie SLABS Meltdown (Bill Harrington)
College Meltdown at a Turning Point
Charting the College Meltdown
Colleges Are Outsourcing Their Teaching Mission to For-Profit Companies. Is That A Good Thing? (Richard Fossey)
Rebuilding the Purpose of the GI Bill (Garrett Fitzgerald)
Paying the Poorly Educated (Jack Metzger)
Forecasting the US College Meltdown
College Meltdown 2.0
State Universities and the College Meltdown
"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis)
Visual Documentation of the College Meltdown Needed

"White Labeling" in Online Higher Education: Simplilearn

Yesterday the NY Times published an article titled "Students Paid Thousands for a Caltech Boot Camp. Caltech Didn’t Teach It." The scandal is likely larger than this NYT article and the small, but important, bits of information in it. Simplilearn, the edtech company involved in the scheme, but not named in the title, is a growing for-profit business with offices in Bengaluru, India and San Francisco. 

What makes the story interesting for consumers and consumer advocates is that like 2U-edX, we find another online program manager, Simplilearn, peddling elite university certificates that may not work out for those seeking better work opportunities. What makes the story doubly interesting is that Blackstone, a company with a trillion dollars in assets under management, holds a controlling interest in Simplilearn. 

What makes it triply interesting (and not noted by the NY Times) is that GSV Ventures has also been involved in Simplilearn.  GSV Ventures includes a number of high-profile names in education, business, and edtech, including Arne Duncan, Johny C. Taylor, Jr., Michael Moe, and Michael Horn.  

Simplilearn also markets online certificates with other elite, brand names, including Purdue University, University of Massachusetts, Brown University, and UC San Diego. In June, Simplilearn stated that it was growing dramatically in revenue (35-45%) and becoming profitable. Consumers on Reddit, however, have made critical remarks about Simplilearn bootcamps. 

Students can use Splitit, ClimbCredit or Klarna for buy now, pay later financing. 

"White Labeling" in Edtech

According to edtech innovator and pioneer John Katzman (Noodle), "White labeling is done everywhere; your GE microwave is not made by GE, and Walgreens doesn't make ibuprofen. And note that these are non-credit, non-accredited programs. Still, I wouldn't put my university's name on other peoples' programs without clear disclosure. Tech and marketing are one thing; teaching and academic advisement are at the core of what a university does."

HEI Values Your Feedback

If there is anyone who has attended one of these bootcamps, please let us know how you financed the program and whether it has resulted in a positive or negative return on investment.

Related links:
Edtech Meltdown

2U Collapse Puts Sallie Mae and SLABS Back on the Radar (Glen McGhee)
OPM Market Landscape And Dynamics: Spring 2023 Updates (Phil Hill)
2U Expands College Meltdown to Elite Universities

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

[Editor's note: The FY 2023 FSA Annual Report is here.] 

In 2014, the father-son team of Joel Best and Eric Best published The Student Loan Mess: How Good Intentions Created a Trillion Dollar Problem. Their argument was that rising student loan debt posed a major social and economic problem in the United States, exceeding $1 trillion at the time of publication (predicted to reach $2 trillion by 2020). This "mess" resulted from a series of well-intentioned but flawed policies that focused on different aspects of the issue in isolation, ultimately creating unintended consequences.

Key Points of the 2014 book:

History of Federal Involvement: The book explored the evolution of federal student loan programs, highlighting how each policy change created new problems while attempting to address the previous ones.

Cost of College: Rising tuition fees along with readily available loans fueled the debt crisis, as students borrowed more to cope with increasing costs.

Repayment Challenges: The authors delved into the difficulties graduates face repaying their loans, including high interest rates, complex repayment plans, and limited income mobility.

Societal Impacts: The book examined the broader societal consequences of student loan debt, such as delayed homeownership, reduced entrepreneurship, and increased economic inequality.

Beyond the Mess: While acknowledging the complexity of the issue, the authors discussed potential solutions, including loan forgiveness programs, income-based repayment plans, and increased government regulation of for-profit colleges.

Overall, "The Student Loan Mess" provided a critical historical analysis of the factors contributing to the crisis and suggested pathways towards a more sustainable system of higher education financing.

Expansion of Federal Loan Programs (1960s-1990s):

The creation of federal loan programs initially aimed to increase access to higher education.

This led to rising tuition costs as universities saw guaranteed funding, with less pressure to remain affordable.

Loan eligibility expanded, encouraging more borrowing even without clear career prospects for graduates.

Cost Explosion and Predatory Lending (1990s-2000s):

College costs skyrocketed due to various factors, including decreased state funding and increased administrative spending.

Loan limits were raised, further fueling the debt increase.

Private lenders entered the market, offering aggressive marketing and deceptive practices, targeting vulnerable students.

Recession and Repayment Struggles (2008-present):

The Great Recession exacerbated loan burdens as graduates faced limited job opportunities and stagnant wages.

Complex repayment plans and high interest rates created a challenging landscape for borrowers.

The rise of for-profit colleges further complicated the issue, often saddling students with debt for degrees with low earning potential.

Growing Awareness, Advocacy, and Reform (2010s-present):

Public awareness of the student loan crisis grew, leading to increased advocacy and demands for reform.

Issues like predatory lending, debt forgiveness, and income-based repayment gained traction.

In 2010, the Health Care and Education Reconciliation Act made a significant change to the federal student loan system. Previously, the government guaranteed private loans, meaning it reimbursed lenders if borrowers defaulted. In turn, lenders received subsidies for participating. The Act ended these subsidies for private lenders, resulting in over $60 billion saved that could be reinvested in student aid programs.

Debates on the role of government and private lenders in financing higher education continued.


Next Chapters?

Since 2014, almost ten years after the Student Loan Mess was published, several major developments have unfolded concerning student loan debt:

Growth and Persistence:

Debt continues to climb: While the growth rate has slowed somewhat, outstanding student loan debt has surpassed $1.7 trillion and remains a significant burden for millions of borrowers.



 

Racial and socioeconomic disparities persist: African American and Latinx borrowers disproportionately hold a higher amount of debt compared to white borrowers, exacerbating economic inequalities.

Policy Changes: 

https://x.com/The Biden-Harris administration has provided $136.6 billion in debt relief. 

Expansion of income-driven repayment plans: Options like Income-Based Repayment (IBR) and Pay As You Earn (PAYE) have been expanded, allowing borrowers to adjust their monthly payments based on income.

Public Service Loan Forgiveness (PSLF) challenges: Legal uncertainties and administrative backlogs have plagued PSLF, leaving many public servants struggling to qualify for loan forgiveness.

Temporary pandemic relief: During the COVID-19 pandemic, federal student loan payments were paused and interest rates set to 0%. Payments resumed in 2023.

Debt cancellation debates: Proposals for broad-based student loan forgiveness have gained traction, with several Democratic lawmakers pushing for different cancellation amounts. However, these proposals have faced legal and political hurdles. In 2023, the 9th Circuit Court ruled in favor of mass cancellation of loans from predatory for-profit colleges (Sweet v Cardona). A few months later, the US Supreme Court struck down President Biden's plan for debt relief to more than 30 million Americans.

Increased attention to for-profit colleges and online program managers: Scrutiny of predatory practices and low graduate outcomes at for-profit institutions has intensified. Gainful employment rules have been reestablished, but whether they will be enforced is in question.  


Looking forward:

The future of student loan debt remains uncertain. Key questions include:

Will broad-based loan forgiveness materialize?

Can income-driven repayment plans be made more effective?

How will future administrations address affordability and access to higher education?

What role will the private sector play in financing higher education?

How will declining enrollment numbers and skepticism about the value of higher education affect student loan debt and debt relief?  

Will higher ed institutions be held accountable for the debt of their former students and alumni?

Can higher education reduce consumer costs and provide value to consumers and communities at the same time?  

How will student loan debt affect disability, retirement, and life expectancy among long-term debtors?     

Policy Drivers:

Economic factors: A strong economy could increase government revenue, potentially enabling broader debt forgiveness or increased funding for higher education access initiatives. Conversely, an economic downturn could make policy interventions more challenging.

Elections and political pressure: Public opinion and the results of future elections will influence the political will for reform. Continued activism and pressure from advocacy groups could sway policy decisions.

Legal challenges and court rulings: Lawsuits over debt cancellation programs and loan servicer practices could impact the legal landscape and shape future policy options.

Private sector involvement: Developments in the private student loan market and potential regulations of lending practices could affect access to credit and repayment options.

Consumer Decisions:

Debt burden and economic outlook: The level of outstanding debt and future job prospects will significantly influence borrower behavior. Increased debt loads could incentivize riskier repayment strategies or delaying major life decisions like homeownership.

Awareness and financial literacy: Improved understanding of loan terms, repayment options, and alternative financing methods could empower borrowers to make informed decisions.

Government programs and incentives: Changes to income-driven repayment plans, loan forgiveness programs, and other government initiatives will directly impact consumer choices about managing their debt.

Emerging Trends:

Alternative financing models: Innovations like income-share agreements and skills-based financing could disrupt traditional loan structures and offer new options for students.

Technology and automation: Increased use of technology to streamline loan management and repayment could improve efficiency and transparency.

Focus on affordability and value: As concerns about the value proposition of higher education grow, there might be a shift towards emphasizing affordable options and skills-based learning.


How does student loan debt affect the lives of Americans?

Student loan debt has a profound impact on the lives of millions of Americans in various ways, affecting not just their finances but also their major life decisions and overall well-being. Here's a breakdown of some key areas:

Financial Impact:

Burden of debt: The average graduate has over $40,000 in student loan debt, significantly impacting their monthly budget and disposable income. This can limit savings for retirement, emergencies, and major purchases like a house.

Lower credit scores: Missed payments or delinquencies can negatively affect credit scores, hindering access to future loans and increasing interest rates on other forms of credit.

Delayed milestones: High debt burdens may cause individuals to delay major life milestones like buying a home, getting married, starting a family, or pursuing further education due to financial constraints.

Career Choices:

Job dissatisfaction: To make loan payments, some graduates might feel pressured to stay in high-paying but unfulfilling jobs, sacrificing career satisfaction for financial stability.

Entrepreneurial risk: The fear of financial failure due to debt may discourage individuals from pursuing entrepreneurial ventures, hindering innovation and economic growth.

Limited career mobility: Debt may lock individuals into specific career paths based on earning potential, restricting their ability to pursue desired career changes.

Mental and Emotional Wellbeing:

Stress and anxiety: The constant pressure of debt repayment can lead to significant stress and anxiety, impacting mental and emotional well-being.

Lower self-esteem: Feelings of financial instability and hopelessness can negatively impact self-esteem and overall life satisfaction.

Stigma and discrimination: Some individuals may face social stigma associated with student loan debt, further exacerbating the emotional burden.

Societal Impact:

Economic inequality: Student loan debt disproportionately affects certain groups, like minorities and low-income students, perpetuating and widening economic inequality.

Lower homeownership rates: High debt burdens can hinder homeownership, negatively impacting the housing market and contributing to wealth disparities.

Reduced consumer spending: Debt-burdened individuals have less disposable income, limiting their purchasing power and affecting the overall economy.


Social Class and Student Loan Debt

There's a well-documented and intricate relationship between social class and student loan debt, characterized by significant inequalities and disparities. Here's a breakdown of some key points:

Higher burden on lower classes:

Borrowing rates: Individuals from lower socioeconomic backgrounds are more likely to borrow student loans due to limited family resources and higher college costs compared to their income.

Debt amounts: Borrowers from lower socioeconomic backgrounds often take on larger debt loads due to higher tuition fees and living expenses, often exceeding their earning potential after graduation.

Repayment challenges: They face greater difficulty repaying loans due to lower-paying jobs, making them more susceptible to delinquency and default. This hinders wealth accumulation and upward mobility.

Contributing factors:

Limited financial support: Lack of parental financial support or savings forces students from lower socioeconomic backgrounds to rely heavily on loans for college expenses.

Limited college options: Limited access to affordable, high-quality educational institutions often steers individuals towards for-profit colleges with deceptive practices and low graduation rates, leading to high debt with limited job prospects.

Ongoing Debate

There is ongoing debate on solutions to address the student loan crisis, with proposals ranging from broad-based loan forgiveness to reforms in higher education financing and income-driven repayment plans. The future of student loan debt and its impact on Americans remains uncertain and depends on various factors, including policy decisions, economic trends, and individual financial choices.

The Student Loan Debt Movement

There has been an organized effort for student loan debt relief since the 2010s. This movement, using direct action, lawsuits, and lobbying has had some gains, putting pressure for accountability for schools that use predatory practices--and getting debt relief for hundreds of thousands of debtors.  The most notable organization has been the Debt Collective.  

Image of Ann Bowers, courtesy of the Debt Collective

There have been legal allies too, such as the Harvard Project on Predatory Student Lending (PPSL) and the Student Borrower Protection Center (SBPC).    

Named plaintiffs Theresa Sweet (L) and Alicia Davis (R) outside the federal district court in San Francisco on November 6, 2022, three days before the final approval hearing in Sweet v Cardona (Image credit: Ashley Pizzuti) 

Resistance to Debt Relief

The reasons why some people might not support student loan forgiveness. Some conservatives believe that it is unfair to forgive the debts of those who willingly took out loans, while others believe that it would be a waste of taxpayer money. Additionally, some believe that student loan forgiveness would not address the root causes of the problem, such as the high cost of tuition.

It is important to note that not all conservatives oppose student loan forgiveness. Some support income-based repayment plans or public service loan forgiveness. Additionally, some believe the government should focus on making college more affordable, rather than simply forgiving existing debt.

According to a 2019 poll by the Pew Research Center, 54% of Republicans and Republican-leaning independents opposed forgiving all student loan debt, while 37% supported it.

Student Loan Debt Power Analysis: Who Benefits from Inaction?

There are elites and elite organizations who are (at least on the backstage) against student loan debt relief: student loan servicers (e.g. Maximus, Nelnet, Navient, and Sallie Mae), big banks, large corporations, and the US military. For them, debt serves as a way to get others to do their bidding. Debt is essential as a leverage tool to recruit and retain workers. Debt relief could also create more competition for better, more meaningful jobs, which some elites may not want for their children. States may be unwilling or unable to further subsidize higher education if elites are unwilling to pay. This situation is likely to worsen as Medicaid budgets are used for a growing number of elderly and increasingly disabled Baby Boomers.  

Related links:

Borrower Defense Claims Surpass 750,000. Consumers Empowered. Subprime Colleges and Programs Threatened.

 

People's Rally for Student Debt Cancellation to be held outside Supreme Court, February 28, 2023  

 

Department of Education: Over half of federal student loan borrowers were not paying before Pandemic (Alan Collinge)

Student Loans and a Brutal Lifetime of Debt (Dahn Shaulis and Glen McGhee)

Maximus, Student Loan Debt, and the Poverty Industrial Complex

SLABS: The Soylent Green of US Higher Education

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

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

Higher Education FOIA Requests to US Department of Education

Navient and the Zombie SLABS Meltdown (Bill Harrington*)

I look forward to reviewing the quarterly and annual Student Loan Portfolio reports, courtesy of Dahn Shaulis and the College Meltdown. The biggest student loan company Navient (NAVI) is melting down too. In the year-to-date, NAVI has underperformed the S&P 500 by 33%! Since spinning out from Sallie Mae in April 2014, NAVI has underperformed the S&P 500 by 137%! (The S&P 500 is up 92% and NAVI is down 45%.)

NAVI's standing is even worse than the trading suggests, in large part because the company still finances itself with the type of asset-backed security ("ABS") deals that birthed and prolonged the 2008 financial crisis. Big Picture: Navient valuations of its student loan ABS deal are exceptionally generous (and that assessment is itself exceptionally generous). The most fantastical valuations are those of the many Navient ABS deals with long-dated maturities as far in the future as 2080, as well as the deals with embedded flip-clause-swap-contracts. Navient’s complete reliance on crisis-causing finance is a governance failure with real dollars-and-cents credit costs — costs that Navient vendors such as auditors, counsel, and credit rating companies ignore.

I pointed out the credit costs of Navient’s failed governance to the credit rating company Moody’s Investors Service in my critique of Moody’s proposed global credit rating methodology for ESG. Moody’s issued a comment request on the proposal and I replied. The non-profit research Croatan Institute, where I am a senior fellow, posts my submission. See pages 10-16 for some of the most egregious Navient governance failures that should spell credit rating downgrades for the ABS and for Navient the company.

Responsible Investor published my op-ed “Moody's ESG overhaul won't have any actual effect on credit ratings...” on October 19. The op-ed highlights the governance failure of Moody’s in proposing a worthless ESG overhaul and links to my methodology critique.

I’ve forwarded the critique of Moody’s ESG proposal to regulatory entities such as the SEC Office of Credit Ratings and the Office of Credit Rating Agency Supervision at the European Securities and Markets Association that should be holding Moody’s (and DBRS, Fitch Ratings, and S&P Global Ratings) feet to the fire. 

Likewise, I’ve forwarded my critique of Moody’s methodology to law enforcement, including the attorneys general of New Jersey and New York. Both have acknowledged receipt and review of my critique. Finally, I’ve let Moody’s know that I’ve alerted the regulators, law enforcement, and many others. Moody’s knows that a lot of eyes are watching how it finalizes the ESG proposal. If Moody’s improves the ESG methodology even a little, that could be a BIG problem for Navient. Here’s hoping.

*Bill Harrington is a Senior Fellow at Croatan Institute, “an independent, nonprofit research institute whose mission is to harness the power of investment for social good and ecological resilience by working at the critical nexus where sustainability, finance, and economic development intersect.”

What happens to the American Dream during the College Meltdown?

American cultural outlets are slowly recognizing just how unequal society has become.  Traditional images of the American Dream and the values of meritocracy are being challenged by more critical discussions about a dangerously unequal society, including the increasingly corrupt and caste-like nature of  higher education.  The following quotes highlight this slow change in consciousness:

"...Public universities and colleges no longer offer the same degree of opportunity they provided to low and moderate income Americans as recently as a generation ago (Dr. Suzanne Mettler in "Degrees of Inequality").

"...Mergers are a hot topic for all kinds of schools, regardless of race and mission. They are presented by legislators as a way to save taxpayer money, strengthen research and educational opportunities, and to increase visibility in a hyper-competitive rush for student enrollment. But beneath the surface, it is part of a far more dangerous plan to divide the haves and have nots..." (Jarret L. Carter, HBCU Digest).

36% of colleges with endowments under $25 million are spending more than 5% per year from their endowment. It's unsustainable. (Dr. Robert Kelchen, Seton Hall University)

"If current trends continue over the next few decades, most state university systems would soon lose all funding from their states....In 2025 Colorado would become the first state to allocate zero funding to higher ed; Iowa would follow in 2029, then Michigan (2030), then Arizona (2032).  Most states wouldn't appropriate any university funding by 2050." (Alia Wong, The Atlantic)   

"You just have to walk through the Yale campus to see what money will buy you, which is a country club, right?...But we have to look at this in the big picture: There are tons and tons of other students at other colleges who are carrying enormous debt loads through their 20s and even into their 30s because school has gotten so expensive." (Malcolm Gladwell, NPR's Weekend Edition)

"...with the higher education industry growing faster than nearly any other industry in the world, we can probably expect its corruption and cronyism to grow just as fast." (Jesse Nickles, College Times)

There is also a growing body of literature critical of US higher education and specifically its institutional financing, service delivery (including the exploitation of adjuncts), student access, student outcomes, and accreditation.

The US college meltdown is deeper than most critics know.   How many people are examining Student Loan Asset-Backed Securities (SLABS) and higher education construction bonds?   

How many citizens really know how their local university and college endowments are getting consistent double digit returns?  Has your school received a valid stress test (NACUBO, 2015)?   

Powerful critics such as Bain Capital (Denneen & Dretler, 2012) and the New America Fund (Selingo, et al, 2013) argue that colleges are spending beyond their means, using outmoded teaching methods, becoming less accessible to students and their families, and refusing to be accountable for student graduation and default rates and “gainful employment” numbers.

Other sources have called the US higher education system's ancillary student loan businesses and accrediting agencies as either criminal or immoral.   For decades now, the student loan industry has been a racket: a scheme between corporations and government resulting in debt peonage for millions of working Americans.   

These harsh judgments are coming at at time of increasing government austerity towards higher education and college tuition costs that are out of reach for many students and their families.

While some may invite the US college crash as a form of “creative destruction” (Johnson, 2014, Economist, 2014), working families are discovering that higher education is an expensive if not risky proposition, sewing “seeds of discontent” among students as well as teachers (Frey, 2013, Chomsky, 2014, Mettler 2014, Lawler, 2015).

Knowing the perils that colleges, students, and families face, this briefing is a starting point to

• Identify whether your school is “at risk” (stress testing)
• Identify where changes can be made, and
• Discuss the importance of being personally and socially involved in making changes

Truthfully, most major "elite" schools are growing in power in wealth.  But this is education for the few.  My purpose here is to educate and agitate people about the college meltdown which is now underway at for-profit colleges, community colleges, Historically Black Colleges and Universities (HBCUs), tribal colleges, schools with endowments below $50 million, and academic programs, such as law schools, at public colleges and universities facing state budget issues.

"For decades, bad actors in this (for-profit) industry have engaged in awful abuses, and for five years we’ve seen steady revelations of such misdeeds, including blatant deceptions by for-profit colleges to students and government overseers." (David Halperin)

"After reviewing the data compiled by several researchers...community colleges are pretty much a mess.  They get far too few of their students on the road to good jobs or four-year college degrees.   Many of their classes are poorly taught.  many of their programs are poorly organized.  Even their best effort are poorly funded."  (Jay Matthews, Washington Post)

"The problem (with community colleges) isn't tuition.  It's guidance and teaching.  Students are turned off not by the cost of community college but the frustrating entrance standards and classes that do not take them in the directions they want to go.  They are given little assistance in navigating the confusing requirements." (Jay Matthews) 

According to Johnny C. Taylor, president & CEO of the Thurgood Marshall College Fund, 50 to 60 percent of HBCUs don’t have a long-term optimistic outlook and about 10 percent are in imminent trouble.

"HBCU dorms have fallen into serious disrepair. Classrooms are in need of updating, and academic programs have suffered. Some schools have had to reduce faculty and staff. To be blunt, it’s the result of years and years of financial neglect. Some of these schools are in need of a major infusion of cash." (Lynette Holloway in The Root).

"These (tribal) colleges not only have high costs per graduate, but also weak educational results. The reasons are complex, but they start with the fact that many reservations are places of despair with levels of alcoholism, drug use, suicide, out-of-wedlock childbearing, violence, and unemployment that would shock the average American. Despondency rules."  (Tom Burnett)

"Law schools face real business challenges. Demand has declined every year since 2010—not just a little but by nearly 40 percent. The same number of law schools have 33,000 fewer prospective customers than they had five years ago."

Those who are sufficiently concerned need to read more about this issue and must follow up with their own homework and social action.

Elite private schools and State Flagship Universities that possess multi-billion dollar endowments, perpetual tax breaks, and renewing government grants promise to get wealthier and more powerful, leaving hundreds of poorer schools in peril.

 Institutions at Risk (“Stress Test”)

If higher education administrators, accrediting agencies, and teachers union officials refuse to be transparent and accountable to students and former students, alumni, adjuncts, and communities, the US college meltdown promises to be more cataclysmic.

Denneen and Dretler (2012) identify at least 13 metrics to identify whether your school is in financial trouble. If your school is not an elite private or public university with a large endowment, you might be at risk if your school is experiencing:

1. Falling admissions
2. Median salaries of graduates are flat
3. Reductions in funding
4. Taking on more debt
5. Tuition increases
6. Reducing faculty head count
7. Cut backs on financial aid

Best and Best (2014) argue that public universities that rely on out-of-state and international students may also be taking on risk that is not readily apparent.

Where to Make Changes
Daneen and Dretler (2012) outline four major areas to make changes.

1. Developing a clear strategy focused on the core of the institution (places that clearly add value)
2. Reducing support and administrative costs (fragmentation, redundancy, unneeded hierarchy, need to outsource some functions—caution reducing instruction costs)
3. Freeing up capital in non-core assets (real estate, physical assets, intellectual property)
4. Strategically investing on innovative models (flexibility for students)

Selingo, et al (2013) mention similar strategies and add several more options in reforming colleges, including:

• Stronger partnerships with community colleges
• Online offerings, hybrid courses
• Data driven student advising system
• More flexible and effective learning systems (online tutorials more effective than lecturing, personalized systems)
• Targeted financial aid
• Peer tutors and supplemental instruction
• Forging partnerships with business and government
• Make transferability more accessible
• Performance based funding

Exemplars of Innovation
No one can tell a community and its colleges what they must do to save resources and generate long-term resources. But there are exemplars of schools doing the right thing for their communities and their student bodies.

Coops are innovative partnerships that allow students to gain work experience before graduating. While coops have been an integral part of wealthy schools such as Drexel University, they can also be used to provide people with needed skills to serve a community. In another briefing, I highlight the growth and success of training at Working Class Accupuncture.

In Rockville, Maryland, nine public colleges and universities are housed in one campus--called the Universities at Shady Grove.  The program began 16 years ago  to "produce an educated workforce and encourage college completion among populations that traditionally struggle to get their ­degrees."

Innovative projects may require some pain, but may lead to even stronger and more mindful and sustainable programs.

Spelman College, for example, saved money by removing interscholastic sports, but replaced them with wellness programs that are an incubator for a "wellness revolution."

Social Involvement
Getting institutions to cut administrative fat, reduce cronyism and “dead wood”, and become more innovative will often result in resistance, even as other schools become more innovatative (Lederman, 2013). According to Daneen and Drettler (2012), in order for change to occur, an institution must

• Bring in key stakeholders to make needed change
• Acknowledge that change is necessary throughout the institution
• Address not only cost cutting, but adding value (e.g. consolidation can improve efficiency)
• Be clear about roles and accountability (functional accountability)

Conclusions
People in the US are living in times of increasing government austerity and declining percentages of traditional college-age students. These are political and social realities that are not going away soon. These realities make it vital that students, families, teachers, educational support staff, administrators, business people, taxpayers, alumni, and community members be actively involved in making colleges accessible, accountable, and responsive to society.

Strategic plans require informed input from an array of stakeholders who must be willing to sacrifice and to innovate. Without this, communities should be prepared for their schools to fail financially. Colleges should pay attention to their core missions, be wary of fads, and be able to adapt as their communities and their economies change. I hope that some of the ideas have prompted readers to think about what they can do to promote change in their colleges.

If you are not a member of an elite institution, how will your local school or alma mater listen and respond? Will they keep their heads buried in the sand, or will all stakeholders work together to be more socially responsive and responsible? If administrators and political leaders are unwilling to offer substantive changes, will students, teachers, and communities take a much larger and more active role in governing institutions, as they appear to be starting to do?

Epilogue: A Sincere Effort from Everyone
There is no shortage of knowledge about what works in US higher education. However, politics and power often get in the way of change (Habley, Bloom & Robbins, 2012, Mettler, 2014).

Those in power hoping to keep critics at bay by offering stakeholders a voice--but not actually considering any of their substantive or "radical" ideas--put themselves and their institutions and communities in peril (Hogan, 2003). It may give breathing room for those on the way out, but it doesn't ensure that the institution can survive for the longer run.

Let's get real. Political officials, regents, board members, and administrators know about lucrative and shady business deals, crony administrative positions, and high-priced pet projects. Teachers and teachers unions know about boring, uncaring, and unprofessional teachers who should be fired. Students know about ill-prepared disinterested peers and those who are cheating their way through school. Citizens know about the lack of access for particular people in their neighborhood and the maldistribution of resources. But it takes courage (and outstanding organization) to get everyone working, and struggling together, before a college fails in its mission.

While those with power may argue that others are at fault, they cannot disregard their own duties to facilitate the education and betterment of their communities.

[First edition posted as "The US College Meltdown," April 13, 2015.]

     

Forecasting the US College Meltdown

Professionals in higher education may deny that a US College Meltdown is occurring, but that doesn't mean it's not here. Arguably, a few variables related to the phenomenon have improved since the economic downturn of 2008-2009, but that's not a return to a healthy situation. That's why I have written more than two dozen articles on corruption, dysfunction, and financial failures in American higher education to document the many facets of the meltdown.

When I speak of College Meltdown, I am referring to the slow-moving decline of US colleges and affiliated businesses, which includes the following variables: (1) increased student loan debt, (2) decreased gainful employment of those who matriculate, (3) declines in student returns on investment (ROI), (4) increased student loan non-repayments, (5) increased student defaults, (6) reduced college enrollment numbers, (7) declines in entrance standards, (8) reductions in college revenues and endowments at less than elite schools, (9) increased use of debt (bonds) to fund colleges, (10) reductions in instructional staff and instructional pay, particularly with the use of adjuncts, (11) increases in class size, (12) college program closing, (13) reduced student services (14) selling of institutional assets, (15) accreditation downgrades, (16) college consolidations, (17) institutional closings, and (18) reduced values and ratings of student loan asset-backed securities (SLABS) .

Total college revenues and expenses have continued to climb, to $342B and $314B in 2015. But the number of community colleges peaked in 2003-2004. And total enrollment at all postsecondary schools combined peaked in 2010-2011.   

These College Meltdown Variables are influenced by a variety of macroeconomic and social variables, including: (1) age demographics, particularly the numbers of college age individuals, (2) family size, (3) family wealth, (4) state and local allocations to higher education, (5) federal allocations to higher education, (6) employment participation, (7) median and quintile personal income of Millennials, (8) K-12 preparedness for college, and (9) immigration numbers.

Professionals have acknowledged certain troubling aspects of the meltdown, especially the student loan debt crisis, but additional components of this problem, which many fail to acknowledge, date back several decades.

Bain Capital ( Denneen & Dretler, 2012) and the New America Fund ( Selingo, et al, 2013) argue that colleges are spending beyond their means, using outmoded teaching methods, becoming less accessible to students and their families, and refusing to be accountable for student graduation and default rates and “gainful employment” numbers.

For me, the question is not whether a meltdown is here, but how quickly it is spreading, which type of schools are most vulnerable and what colleges are in the most immanent danger of failing.

According to Neal McCluskey of the Cato Institute, about 300 colleges closed in 2016. While most were for-profit colleges, many other private and public schools are performing poorly and downsizing.

At first glance, the most vulnerable schools are for-profit colleges, HBCUs, community colleges in cash strapped states, small private liberal arts and Christian colleges, tribal colleges, and public "dropout factories." Low enrollments and downgrades in accreditation are variables that suggest huge problems. But factors such as negative Return on Investment (ROI) should also elicit alarm bells.

In developing predictive models, analysts must consider the dynamic, somewhat unpredictable, and seemingly irrational nature of human behavior. For example, as more working class and middle class people recognize that college is a high risk investment for themselves and their families, a greater number should choose to opt out of school or delay college participation, choose community colleges for the first two years of schooling, or select other majors. But this may not always be the case.

Rational Choice Theory has limitations for understanding college choice. Theories of asymmetrical information, time discounting, and sunken investment, illustrate that people can make sub-optimal decisions about choices even as they gain knowledge.

College administrations can also change their behaviors to survive and thrive in a more competitive environment.