Owners of Shuttered For-Profit Hussian College Sue ex-CEO, Charging Embezzlement (David Halperin)

The owners of shuttered for-profit Hussian College have sued the school’s former president and CEO, Jeremiah Staropoli, seeking $162 million in damages and penalties and claiming that Staropoli and close associates in the company embezzled funds and then conspired to cover up the alleged misdeeds.

On September 5, father-and-son Hussian owners David and Joshua Figuli sued Staropoli, other former Hussian employees, and two lending companies in Pennsylvania state court, alleging a racketeering conspiracy, fraud, embezzlement, and other abuses. The lending companies, contending there was a basis for federal court jurisdiction, removed the case from the state court to the U.S. District Court in Philadelphia.

While the companies and some of the former employees have filed answers to the complaint or moved to dismiss the case, Staropoli has not responded. In a recent court filing, the Figulis say they have tried to serve Staropoli with the complaint seven times and that Staropoli “appears to be evading service.”

Staropoli did not respond to a request for comment from Republic Report. The Figuli’s attorney also did not respond.

The Hussian closure

Hussian College, founded in Philadelphia in 1946, closed in summer 2023. At the time it shut down, Hussian had hundreds of students at campuses in Pennsylvania, Ohio, Tennessee, and California, plus online offerings, and taught programs in business, information technology, criminal justice, health sciences, and the arts. Hussian, in 2018, had expanded by taking over Tennessee-based for-profit Daymar College, a school that had in 2015 agreed to a $12.4 million settlement to end a lawsuit, alleging deceptive practices, brought by Kentucky’s attorney general.

For academic year 2021-22, the last year for which the U.S. Department of Education published data on the school, Hussian received $14.8 million in federal student aid dollars from the Department — about 74 percent of the school’s revenue.

In June 2022, accrediting agency ACCSC, the gatekeeper for the schools’ eligibility for federal student grants and loans, had put all the Hussian and Daymar campuses on system-wide warning, citing concerns about student achievement at the schools. But ACCSC removed the warning and renewed Hussian’s accreditation in December 2022.

The Figulis announced the closure in June 2023, two weeks after Joshua Figuli informed Hussian students by email that the school’s board of directors had replaced Staropoli because it had “lost confidence in his leadership.” Figuli wrote in a separate email to faculty and staff that a “gut-wrenching process of discovery” had produced “shockingly revealing” information about the state of the school under Staropoli.

Around the time of the announced closure, more than 15 Hussian faculty, staff, students, and parents spoke with Republic Report. They told me that Hussian repeatedly had been pressed by vendors for extended and blatant failures to pay its bills, that students had not been receiving federal aid disbursements in a timely manner, that Hussian owed money to many students, and that Hussian was enrolling new students even as it was about to close.

One Hussian employee at the time reported to me evidence of financial misconduct, improper expenses, and computer access manipulation by Staropoli. The employee also said that Joshua Figuli, who stepped in as CEO when Staropoli was dismissed, was failing to respond to calls and emails from students and staff who were trying to find out what was going on.



The lawsuit’s allegations

The lawsuit filed in September by the Figulis places the blame for Hussian’s collapse squarely on Staropoli, who joined Hussian as CEO in 2017, and a group of employees he brought in. The Figulis admit to knowing that Staropoli had past ties to some of these employees, but they claim the ties turned out to be much deeper than Staropoli told them, including, they allege, one employee engaged, before and after being hired, in an apparent romantic relationship with Staropoli. The Figulis allege that Staropoli caused Hussian to pay large and unwarranted bonuses to these favored employees, and even allowed one of them to work for Hussian while remaining on the payroll of a competitor school.

The Figulis also allege that Staropoli conspired with the two lending companies to make deals behind their backs and that Staropoli created fake email addresses for the Figulis so that he, not they, would receive confirmation of the deals.

The Figulis say that under Staropoli’s leadership, Hussian was failing to return to the government millions in unearned federal and state student aid, as required by law, and that Staropoli was concealing from them the schools’ “dire state of cash flow” and its failure, also, to transmit hundreds of thousands owed to students.

And they allege that school money was used to pay for Staropoli’s family and friends to vacation in Orlando and Nashville; for charges from Staropoli’s country club in Delaware; for tuition payments to Drexel University for one of the favored employees, despite that same employee ending Hussian’s tuition reimbursement policy; for “nondescript transfers to VENMO”; and more.

The Figulis claim that the alleged improper actions of Staropoli and other defendants induced them “to provide loans, advance costs, provide capital infusions, forego collections, and execute guarantees that summed to total direct losses in excess of $6,948,110.93.”

The two lending companies have moved to dismiss the case, one former employee has done the same, and another former employee filed an answer to the complaint. But former employee Steven Wojslaw, according to a filing by the Figulis, was served but has not filed any response.

Wojslaw filed his own lawsuit against Hussian in 2022, after he apparently put his own money into the company. When he was terminated, he sued to get the money back. That case was settled. Meanwhile, Velocity Capital Group, one of the lenders the Figulis have now sued, filed last year its own lawsuit in New York against Hussian and the Figulis, seeking its investment back. The Figulis have filed a counterclaim in that lawsuit.

In their new case against Starapoli, Velocity, and the others, the Figulis filed a motion on December 2 seeking permission to amend their original complaint to clarify, add, and withdraw certain claims, in part to respond to the motions to dismiss.

Who is Jeremiah Staropoli?

A former employee says information that the company learned around the time the Figulis forced out Staropoli came as “a giant shock” to the company. “It was insane,” this ex-employee says. “There were multiple victims: the Figulis, but also the staff, the students, and the government.” The ex-employee asks, “Why don’t people go to prison” when they “destroy so many lives?” This employee says that, as the school struggled, many employees believed the Figulis were the enemy, who wouldn’t invest enough money and time “to help Staropoli save the company,” but that the facts in the new lawsuit tell a different story.

Jeremiah Staropoli is a former president of the Towson, Maryland, campus of Brightwood College, a for-profit chain owned by now-collapsed Education Corporation of America. He also previously worked for the for-profit college operations Kaplan and DeVry. According to his LinkedIn page, he also was previously president of the Kentucky-based The Keeling Group, an IT consulting firm “specializing in custom software development, cloud consulting, network integration and higher education regulatory compliance solutions.”

Staropoli also was once listed as part of the management team of a fledgling coding bootcamp operation owned by the Figulis called AcademicIQ, but that business apparently never took off. Hussian College and AcademicIQ shared an address on Spring Garden Street in Philadelphia, along with a campus of non-profit Harrisburg University. David Figuli until recently served on the Harrisburg University board of trustees.

Hussian also has a connection to Colbeck Capital Management, slippery operators of campuses of the Art Institutes (now closed) and South University (still open) that were acquired in the wake of the collapse of Dream Center Education Holdings. Hussian acquired the Los Angeles-based Studio School, in which Colbeck had been an investor, and renamed the school Hussian College Los Angeles; Staropoli told me in 2019 that Colbeck-backed Studio Enterprise remained “a service provider” to the school.

The mess at Hussian seems to be just the latest example of how the federal investment in for-profit colleges often ends up as waste, fraud, and abuse — with taxpayers ripped off, students locked out in the cold, and some for-profit executives walking away with cash and fancy perqs. The for-profit college industry, recalling the lax enforcement in the first Trump term under Secretary of Education Betsy Devos, is salivating at the impending restoration of the leader of scam Trump University as leader of the United States. But, if it has any integrity at all, the new department that Elon Musk is supposedly setting up for Trump — committed to rooting out federal government waste, fraud, and abuse — should investigate this industry promptly.

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

Colleges Are Outsourcing Their Teaching Mission to For-Profit Companies. Is That A Good Thing? (Richard Fossey*)

[This article is part of the Transparency-Accountability-Value series.]

Years ago, colleges employed people to perform auxiliary services. University employees staffed the campus bookstore, ran the student union, and performed janitorial services.

Over time, however, universities began outsourcing almost all of their auxiliary services. Barnes & Noble now runs hundreds of college bookstores. National fast-food chains operate stores in countless student unions.

Recently, however, American colleges have gone beyond outsourcing their non-instructional activities. Now, the universities are outsourcing their core mission: teaching students.

According to the Government Accountability Office (as reported in the Wall Street Journal), 550 colleges and universities are partnering with for-profit companies to design courses, recruit students, and manage instruction.

Academic Partnerships, one of the leading for-profit outfits, contracts with universities all over the United States to manage graduate programs--for a hefty fee, of course. Higher Education Inquirer estimates that AP collects about half the revenue from the courses and programs they manage.

2U, another for-profit online instruction provider, has a contract for services with the University of Oregon and gets 80 percent of the tuition for 2U-managed courses. That's a good deal for 2U's stockholders.

What the hell is going on?

As the Wall Street Journal explained, colleges are losing revenue due to declining enrollments. They aren't raising enough money to pay all their administrators and bureaucrats. Thus, hundreds of schools are investing heavily in online academic programs--especially graduate programs--to juice their revenues.

Respected public universities like the University of North Carolina and the University of Oregon have turned to for-profit companies to design or revamp various graduate programs, recruit students, and oversee instruction.

Why don't the professors do those things?

I don't know. Perhaps the faculty don't have the skills necessary to recruit students, manage enrollment, or design academic programs for an online format. Or maybe doing these things is just too fuckin' hard.

I have a professor friend whose dean ordered him to design and teach an online course for a master's degree program managed by Academic Partnerships. He was told the class would be conducted online over five weeks.

My friend was a good soldier and taught the course as directed. He had over 600 online students! When the class was completed, my friend told the dean he would never teach an online course that way again, even if it meant being fired.

As the Wall Street Journal pointed out, students are often unaware that they are taking a course managed by a profit-driven company, not the university.

For example, the University of Texas at Arlington has a big-time financial relationship with Academic Partnerships, which manages graduate programs in nursing, education, business, and public health. Nevertheless, UTA's promotional materials do not disclose that Academic Partnerships manages these online graduate programs.

Students all over the United States are taking out loans to pay tuition bills at public universities in the naive belief that these schools are non-profit entities dedicated solely to the public good.

Most of these students would be surprised to learn that a profit-making company is sucking up a good share of their tuition dollars to enrich their executives and investors.

My take on this? If a public university is so goddamn lazy or incompetent that it has to pay a private company to manage its academic programs, then that university should be closed. 

Richard Fossey


*This article originally appeared in Richard Fossey's Condemned to Debt Blog. The blog's URL is https://www.condemnedtodebt.org/

 

 

Remembering Gainful Employment Regulations

In the mid-2010s, the U.S. Department of Education introduced the Gainful Employment (GE) regulations—a landmark attempt to hold career-focused educational programs accountable for their graduates' ability to earn a living wage. These regulations aimed to protect students from for-profit colleges and vocational programs that left them burdened with crippling debt and poor job prospects. However, over the past several years, political forces have consistently worked to weaken or outright undo these regulations, often in ways that raise concerns about the future of higher education and student protections.

The story of Gainful Employment begins in earnest during the Obama administration, when the Department of Education sought to curb the rapid growth of for-profit colleges that had been criticized for enrolling vulnerable students with promises of high-paying jobs, only to see them graduate into financial struggles. The GE rules were designed to measure whether students at these institutions were able to repay their loans based on their post-graduation earnings. If a program failed to meet certain thresholds, it would lose access to federal student aid, a lifeline for many struggling institutions.

Initially, the regulations were celebrated by consumer advocates and organizations that had long criticized the for-profit education sector for exploiting students. The Department of Education estimated that the GE rules could save taxpayers billions of dollars while protecting students from enrolling in programs that didn't deliver a return on their investment. In theory, if schools couldn't demonstrate that their graduates earned enough to repay their student loans, they would be incentivized to either improve their offerings or face the consequences of losing federal funding.

However, soon after the GE regulations were finalized, they came under fierce political attack.

The Political Pushback

In 2017, with the change in presidential administrations, the Trump administration began rolling back a number of regulations designed to protect students, including the GE rules. Secretary of Education Betsy DeVos, a long-time critic of what she saw as excessive government regulation in education, spearheaded efforts to delay and ultimately repeal the regulations. Her argument was that the rules were overly burdensome for schools, especially those providing vocational training, and that they unfairly penalized schools whose graduates may not have had high earnings but were nonetheless gaining valuable skills.

But DeVos wasn’t alone in her opposition. The for-profit college industry, which had faced heightened scrutiny under the Obama-era regulations, mounted an aggressive lobbying campaign to dismantle the GE rules. Aided by influential trade groups like the Association of Private Sector Colleges and Universities (APSCU), the industry argued that the GE regulations undermined their ability to serve students, particularly those in underserved communities who might not have access to traditional four-year colleges or universities.

The political power of the for-profit sector, combined with the new administration’s deregulatory agenda, resulted in an effort to sideline the GE regulations. DeVos delayed the effective date of the rules and pushed back the enforcement deadlines, making it clear that the regulations were no longer a priority for the Department of Education. In 2019, the Department even went as far as to propose a new version of the rules that was far less stringent, ultimately rolling back the original GE provisions.

The Legal and Political Maneuvering

The political attacks on the GE rules weren’t just limited to administrative delays. Conservative lawmakers played a central role in undermining the regulations as well. In 2017, Congress included provisions in the budget bills that prevented the Department of Education from enforcing or implementing the GE rules. These provisions were not just about defunding enforcement—they were about making the regulations essentially toothless, rendering them ineffective in holding schools accountable for their graduates' financial success.

This legal maneuvering was supported by arguments from Republican lawmakers that the federal government shouldn’t be in the business of telling students and schools what a "good" or "bad" educational program looks like. They framed the issue as a matter of personal choice and freedom, with education viewed primarily as a private market rather than a public good that needs oversight. The rhetoric around personal choice was particularly potent when paired with claims of excessive governmental overreach and bureaucratic red tape, which found a receptive audience in a Congress eager to reduce the size and scope of federal regulation.

Reversals, Delays, and Legal Back-and-Forth

By 2020, the Trump administration had all but dismantled the original Gainful Employment rules, but their story was far from over. As soon as President Biden took office in 2021, there were hopes that the GE regulations might be resurrected and enforced more strictly. However, the political hurdles to reinstating the rules were significant. Biden’s administration, despite its promises to reform higher education, faced intense lobbying from powerful for-profit college associations and other stakeholders who feared the financial consequences of stricter regulations.

By the end of 2022, the Biden administration had made a step toward strengthening the GE regulations, proposing new rules to bring back accountability measures—but they faced obstacles as well. The continuing political and legal challenges surrounding the GE regulations are a testament to the deep entrenchment of vested interests within the higher education landscape. Critics argue that, while the Biden administration’s changes represented progress, they still fell short of the original intent and fail to fully restore the protections for students that had been so dramatically weakened under the Trump era.

The Impact on Students and the Future of Higher Education

For students, the reversal of the GE regulations has had profound consequences. According to research, when educational programs fail to provide students with the skills necessary to secure well-paying jobs, the result is often long-term financial instability, and this issue disproportionately affects low-income students, first-generation college-goers, and students of color.

Without robust regulations to hold programs accountable, the for-profit sector can continue to expand unchecked, marketing programs that may leave students with massive debt but few prospects for a secure future. The constant legal and political battles around the GE rules show just how difficult it can be to enact lasting change in an industry as influential as higher education. As long as lobbying power and political maneuvering continue to shape policy, the promise of education as a tool for social mobility and economic security will remain out of reach for many Americans.

The Rise of Christian Cybercharters: Profit, Indoctrination, and the Dangers of Faith-Based Online Education

As online education becomes an ever-expanding force in both K-12 and higher education, a disturbing trend has emerged with the rise of Christian cybercharter schools and online academies. While these institutions promise faith-based education and an alternative to secular public schooling, they also raise serious concerns about indoctrination, the commodification of education, and the profit-driven motives of their for-profit operators. For many families seeking an education aligned with their Christian values, these digital platforms offer an attractive solution. However, as the lines between faith-based learning and corporate interests blur, the question remains: what are we sacrificing in the pursuit of religiously guided education?

The Growing Influence of Christian Cybercharters

Christian cybercharter schools are part of a broader trend in which private, for-profit companies deliver education to students via online platforms. These schools, often designed to serve as alternatives to secular public education, integrate Christian teachings into core subjects such as history, science, and literature. While these schools may offer a semblance of flexibility for students in rural areas or families dissatisfied with traditional schooling, their model poses unique challenges.

Cybercharter schools are, by definition, public schools that operate entirely online and are funded with taxpayer dollars. Yet, the rise of Christian cybercharters, run by private companies, complicates the traditional understanding of education. These institutions, rather than simply providing secular education, often incorporate Christian teachings into all aspects of learning. Students may study math, science, and history through a Christian lens, learning creationism instead of evolution or receiving a heavily filtered view of history. In some cases, controversial issues such as LGBTQ+ rights and reproductive health are taught in ways that align with conservative Christian values, potentially ignoring or dismissing broader social, legal, and ethical considerations.

While these schools may appeal to parents seeking religiously grounded education for their children, concerns about the quality of education and the potential for indoctrination are mounting. Instead of offering an objective, well-rounded academic experience, these institutions may turn into ideological factories, promoting a singular worldview at the expense of critical thinking, intellectual curiosity, and open-mindedness.

James Loewen’s Lies My Teacher Told Me: Everything Your American History Textbook Got Wrong serves as a cautionary tale when examining the educational landscape shaped by these faith-based online programs. In his book, Loewen critiques the sanitized, biased versions of American history often taught in public schools—narratives that ignore uncomfortable truths about racism, inequality, and colonialism. This phenomenon is mirrored in some Christian cybercharters, where history is frequently reinterpreted to promote a specific religious or political agenda, potentially leaving students with a distorted, incomplete understanding of the world. The difference here, of course, is that rather than the state pushing a particular narrative, these programs are driven by religious agendas that prioritize faith-based views over academic rigor and historical accuracy. Just as Loewen critiques the "lies" of public school textbooks, one could argue that these Christian educational platforms sometimes present a faith-filtered version of reality—one that aligns more with ideological conformity than intellectual exploration.

The Profit Motive: Corporations, Private Equity, and the Business of Faith-Based Education

At the heart of the Christian cybercharter movement is a growing involvement of private equity firms and publicly traded companies eager to profit from the expanding online education sector. Venture capitalists have increasingly poured investments into education technology companies, including Christian online platforms. As a result, more and more online education providers—particularly Christian cybercharter schools—are becoming businesses in the traditional sense, with financial returns prioritized over educational outcomes.

Much like other for-profit charter schools, these Christian cybercharters face the same pressures to maximize revenue. While proponents of this model argue that parents should have the option to select an education aligned with their values, critics argue that profit-driven motives overshadow educational quality. In many cases, the companies running these online schools are more focused on expansion, enrollment, and financial performance than on fostering critical thinking or providing a rigorous, well-rounded education.

In the case of for-profit Christian cybercharters, this business model often leads to a corporate agenda that prioritizes market share rather than genuine educational development. Whether or not these schools offer the best or most effective education is secondary to their role as vehicles for profit. Furthermore, because many of these institutions are delivered through online platforms, the lack of direct teacher-student interaction and oversight further diminishes the opportunity for intellectual debate and inquiry.

Indoctrination vs. Education: The Risks of Religious-Based Learning

One of the most significant concerns with Christian cybercharters is the potential for indoctrination. Unlike secular education, where students are encouraged to explore various ideas, form their own opinions, and critically engage with the material, Christian cybercharters often deliver content that aligns solely with religious teachings. In many cases, students are not encouraged to question or challenge the material they are given, but rather to accept it as the unquestionable truth.

For example, in science courses, students may be taught creationism in place of evolution or may receive instruction that contradicts widely accepted scientific principles. In history classes, there may be a deliberate effort to present historical events through a Christian lens, prioritizing religious interpretations and avoiding broader, secular understandings. This framing can affect the way students understand the world and interact with it, teaching them to see things in a way that aligns with specific religious views, rather than providing them with the tools to critically evaluate the world around them.

Loewen’s Lies My Teacher Told Me warns of the dangers of sanitized history education. The same critique can be applied to some Christian online academies. Just as Loewen highlights how mainstream textbooks gloss over the uncomfortable truths of American history—such as the treatment of Native Americans or the legacy of slavery—Christian cybercharter schools may whitewash history to fit a specific theological or political narrative. Students may learn that America is a "Christian nation," without an in-depth exploration of the diversity of belief systems that have shaped the country, or the ways in which Christianity’s role in history has been contested and debated. The problem arises when children, instead of being equipped to navigate complex historical realities, are taught to passively accept an ideological version of the past.

When education becomes synonymous with religious indoctrination, the line between objective knowledge and belief becomes dangerously blurred. Students are taught not to think critically about their beliefs or values but to accept them as fact, leaving little room for exploration, dialogue, or intellectual growth. The digital environment, where much of the learning takes place through pre-recorded lessons and automated grading systems, exacerbates this issue by limiting opportunities for meaningful teacher-student interaction.

The Corporate Takeover of Higher Education: Robocolleges and Faith-Based Learning

The influence of private companies and venture capital isn’t just limited to K-12 education. As online education expands, the model of faith-based learning is also infiltrating higher education. Many institutions are now offering Christian-based online degree programs, promising students a “Christian worldview” in subjects ranging from business to theology. While these programs may appeal to individuals seeking a religiously informed education, they raise concerns about the quality and breadth of education students receive.

The rise of “Robocolleges”—virtual universities run by corporations that offer online degrees—is another manifestation of the growing corporate control over education. These online programs, often funded by investors looking for high returns, can prioritize cost-efficiency and marketability over rigorous academic standards. In the case of faith-based online institutions, the goal can shift from providing a comprehensive education that challenges students to think critically about the world, to creating a narrow ideological framework where students are encouraged to see the world solely through the lens of Christianity.

In this environment, the rise of “Robostudents”—individuals who navigate education through algorithms and automated platforms—further deepens the risk of creating a generation of individuals who are highly specialized but lack the broad intellectual and social competencies needed to thrive in a diverse world.

Christian Robokids: The Future of Digital Indoctrination

A particularly concerning aspect of the rise of Christian cybercharters and online academies is the emergence of Christian Robokids—students who, in addition to receiving a faith-based education, are increasingly immersed in a highly automated, digital, and corporate-driven learning environment. As Christian cybercharters adopt more sophisticated AI and data-driven learning platforms, children may begin to engage with content not only through pre-recorded lessons but through AI-powered tutors and personalized learning paths that adapt to each student's “progress.” While this may sound appealing in theory, it opens the door for a future in which students are not only learning religious doctrine but are also being trained to conform to predetermined educational frameworks, shaped more by corporate interests than intellectual freedom.

Christian Robokids would navigate a digital education system where their learning is increasingly controlled by algorithms designed to maximize efficiency and profitability. These students could interact with content tailored to reinforce a singular religious viewpoint, with little to no exposure to diverse perspectives. In a world of Robokids, students might not engage in real discussions with teachers or peers, but instead follow rigid, automated curriculums. Their development into “robostudents” is further cemented by the complete absence of opportunities for face-to-face interaction, debate, and critical engagement with differing worldviews.

Moreover, the lack of teacher oversight in an entirely virtual system means that students may miss out on developing social and emotional intelligence, important for engaging in the complex, pluralistic world beyond the screen. The robotic nature of learning—where students become passive recipients of information rather than active participants—poses long-term risks to the intellectual and social development of children in these environments.

The Biggest Christian Online Academies

Several major Christian online academies are leading the charge in this digital faith-based education landscape, offering K-12 programs that blend academic rigor with Christian values. These academies not only cater to homeschool families but also serve as alternatives to public school systems, providing religiously grounded curricula that focus on both intellectual development and spiritual growth. Some of the largest and most well-known Christian online academies include:

1. Liberty University Online Academy – This academy offers a comprehensive K-12 online program with a strong focus on biblical teachings alongside standard academic subjects. Liberty University, a major Christian institution, has established a reputation for delivering accredited programs that combine faith and learning.

2. BJU Press Online Academy – Known for its biblical integration and classical Christian education approach, BJU Press offers a fully accredited K-12 online program that focuses on a Christ-centered worldview while delivering high-quality academics.

3. Alpha Omega Academy (AOP) – A significant player in the Christian homeschooling space, AOP’s online academy offers a customizable, accredited K-12 curriculum. Its flexible approach allows families to integrate Bible-based teachings into core subjects.

4. The King’s Academy – A Christian online school that blends academic excellence with spiritual development, providing a biblically integrated curriculum from kindergarten to high school.

5. Veritas Scholars Academy – Known for its classical Christian education model, Veritas offers online courses with a focus on critical thinking, intellectual development, and biblical integration for students in K-12.

These online academies reflect the growing demand for faith-based education in the digital era, offering flexible options for families who prioritize both academic excellence and spiritual growth. However, as these institutions scale and continue to integrate new technologies, the risk of further corporate influence and educational homogenization grows, raising questions about the long-term impact on students' ability to think critically and engage with a diverse world.

The Danger of "Garbage In, Garbage Out" in Faith-Based Education

A worrying byproduct of the corporate-driven Christian cybercharter model is the “Garbage In, Garbage Out” phenomenon. Just as for-profit companies may prioritize profits over educational outcomes, so too does this model risk producing students who are poorly prepared for the real world. If the content students are being fed is biased, ideologically driven, or scientifically flawed, the result will be a generation of graduates whose knowledge is narrow, incomplete, and disconnected from the realities of an increasingly diverse and complex world.

Christian cybercharters, while offering a religious alternative to public schools, risk leaving students unprepared for intellectual challenges and social engagement. Without the opportunity to engage with diverse perspectives or develop critical thinking skills, students may find themselves ill-equipped to navigate the broader society or the ever-changing workforce.

Conclusion: The Future of Faith-Based Education

As the trend of Christian cybercharters and online academies continues to grow, the future of faith-based education remains uncertain. Will these digital platforms provide students with the academic rigor, critical thinking skills, and social understanding they need to thrive in a complex world, or will they become vehicles for ideological conformity and corporate profit? As parents and educators, it is critical to carefully evaluate these programs, balancing faith-based values with a commitment to fostering intellectual independence and a well-rounded education that prepares students for life beyond the classroom.

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

Image of Ann Bowers, courtesy of the Debt Collective

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. 

Student Loans in the US: A Trillion Dollar Tragedy (Glen McGhee)

Adam Looney and Constantine Yannelis have reopened their research on the student loan mess with a new paper from Brookings titled "What went wrong with federal student loans?" The paper talks about what went tragically wrong with student loans in the United States from 2000 to 2020. 

Here are the key points:

1. More people started going to college, especially those who didn't have a lot of money or whose parents didn't go to college. [See note below]
2. To pay for college, many of these new students had to borrow money from the government through student loans.
3. A lot of these new students went to for-profit schools. These are schools that are run like businesses to make money, unlike regular public or non-profit colleges.
4. The problem is that many of these for-profit schools didn't provide a good education. Their students often didn't graduate or couldn't find good jobs after finishing school.
5. Because these students couldn't get good jobs, they had trouble paying back their loans. This caused a big problem for the government and the students.




Now, let's look at Figure 3 Panel B:
This graph shows how many first-generation college students (students whose parents didn't go to college) enrolled in different types of schools. The schools are grouped by how well their students could repay loans. The red line at the bottom represents the best schools - where students usually paid back their loans easily. You can see this line barely goes up over time. The dark blue line at the top represents the worst schools - where students had the most trouble paying back loans. This line goes way up, especially after 2000.

What this means is that a lot of first-generation students, who often didn't have much money to begin with, ended up at the schools where they were least likely to succeed and most likely to have trouble with their loans.

The for-profit schools took advantage of this situation. They aggressively recruited these students, knowing they could get money from government loans. But they didn't focus on giving students a good education or helping them get jobs. Instead, they just wanted to make money for themselves.

This led to a big increase in student debt problems, especially for students who were already at a disadvantage.

Note: This statement refers to trends in college enrollment that occurred in the early 2000s through about 2012. Let me explain the reasons behind this trend and whether it's still true today:

Reasons for Increased College Enrollment
1. Policy Changes: Starting in the late 1990s, policymakers weakened regulations that had previously constrained institutions from enrolling aid-dependent students[1]. This made it easier for more people to access federal student aid and enroll in college.
2. Economic Factors:
- The persistently high return to college education over the last several decades increased demand for higher education[1].
- During economic downturns like the 2001 recession and the Great Recession starting in 2007, the opportunity cost of enrollment was low due to weak labor markets[1].
3. Supply Expansion: The supply of programs surged, particularly open access institutions, online programs, and graduate programs[1]. Many of these new programs were targeted at non-traditional student populations.
4. Demographic Shifts: Between 1990 and 2010, the number of high school graduates increased by 34%[1].

Is it Still True?
The trend of increased college enrollment, especially among disadvantaged groups, has partially reversed since its peak:
1. Overall Enrollment: By 2020, total undergraduate enrollment had declined back to near its level in 2000[1].
2. Demographic Changes:
- Black undergraduate enrollment in 2020 remains only modestly higher than in 2000 - about 10% greater[1].
- White undergraduate enrollment in 2020 was below its level in 2000[1].
- Hispanic enrollment almost doubled between 2000 and 2020[1].
3. First-Generation Students: While 60% of postsecondary students were first-generation in 2000, this share declined to 56% in 2020[1].
4. For-Profit Sector: Enrollment at for-profit institutions, which had surged between 2000 and 2012, has since declined significantly[1].

In summary, while there was a significant increase in college enrollment, especially among disadvantaged groups, from 2000 to 2012, this trend has partially reversed in recent years. However, some changes, like increased Hispanic enrollment, have persisted. The overall landscape of higher education enrollment continues to evolve, influenced by economic conditions, policy changes, and demographic shifts.

Citations:
[1] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/238393/f60f1373-2266-45ed-8960-6656ba110b38/paste.txt
[2] https://www.brookings.edu/articles/first-generation-college-students-face-unique-challenges/
[3] https://www.capturehighered.com/client-blog/landscape-in-flux-2024-enrollment-trends/
[4] https://medicat.com/why-first-gen-college-students-need-extra-support/
[5] https://www.insidehighered.com/news/2019/05/23/pew-study-finds-more-poor-students-attending-college
[6] https://www.forbes.com/advisor/education/online-colleges/first-generation-college-students-by-state/
[7] https://nces.ed.gov/programs/coe/indicator/cpb/college-enrollment-rate

Carl Barney, Ex-Owner of Deceptive For-Profit Colleges, Donates Big to Trump (David Halperin)

Carl Barney, the ultra-wealthy former owner of a chain of collapsed for-profit colleges, is the third biggest California-based donor to efforts to elect Donald Trump in 2024, the Los Angeles Times reports today.

Barney has donated $924,600 to the Trump 47 Committee, according to federal records.

Like Donald Trump, who in 2016 paid $25 million to settle civil charges by New York’s attorney general that his unaccredited real estate school, Trump University, defrauded its students, Barney saw his schools shut down after law enforcement agencies and former students went to court over claims of deceptive practices.

Barney explained his reasons for supporting Trump in a fascinating post last month on his personal website.

According to Barney, Trump “approaches the job of President as a businessman, not a politician,” which Barney sees as “mostly a major strength.”

“I’m aware of President Trump’s shortcomings,” Barney acknowledges, “but I won’t criticize him here. (If you want criticism, you’ll find all you need in the popular ‘news’ media.)”

Barney evaluates Trump’s term in office and concludes that the ex-president “significantly improved the individual freedom of Americans to pursue their goals with less government hindrance.”

While Barney concedes that he does not like Trump’s “proposed tariffs and some of his economics,” he likes that Trump “wants to work with Elon Musk to reduce spending, regulations, waste, and fraud in the federal government.

What doesn’t Barney like about Kamala Harris? A number of things, but he zeroes in on this: “Kamala Harris is an avowed enemy of private career colleges and boasts about closing them. Her boasts reveal her disregard for the schools’ students and teachers, as well as the entrepreneurs and investors who created the schools.” Harris, Barney concludes, “holds the anti-freedom values common to radical leftists.” He warns, “These people hate profit, business, and businessmen.”

Barney prepares his audience for the attacks he will face for his endorsement. “Since my contribution to President Trump will be public,” he writes, “I know that I will become more of a political target than I’ve been over the last 10 years. I’ve been a target of trolls, lawfare, and political operatives who finally destroyed my beautiful colleges. I know they will now target me with renewed force and energy. That’s something I will have to confront.”

Barney concludes his post with this unifying message, “If anyone sees something wrong with Making America Great Again (MAGA), then they’re not friends of mine, nor of yours.”

While Barney’s focus on Harris’s role in taking on abusive for-profit colleges is no surprise, his identification of fighting government waste, fraud, and abuse as a key policy priority for him is particularly rich, given his role in running a college operation, the Center for Excellence in Higher Education (CEHE), that received billions in federal taxpayer dollars and ultimately was found liable for deceiving students — and given his schools’ troubling conversion to tax-free non-profit status in a deal that increased his staggering wealth.

In August 2020, following an extensive trial, a Colorado state court sided with that state’s attorney general and found CEHE, its CollegeAmerica school, Carl Barney, and CEHE CEO Eric Juhlin liable for deceptive practices and awarded a $3 million judgment.

The Colorado court found that Barney’s schools used a detailed playbook to manipulate vulnerable students into enrolling in high-priced, low-quality programs; that the schools directed admissions representatives to “enroll every student,” regardless of whether the student would likely graduate; that the schools’ recruiters and advertisements greatly overstated starting salaries that graduates could earn; and that the schools falsely inflated graduation rates.

In April 2021, Independence’s accreditor, ACCSC, ended its approval of Independence University, which by then was CEHE’s main school, effectively repealing its eligibility for federal student grants and loans. Soon after, the U.S. Department of Education restricted the flow of such aid. In the wake of those developments, CEHE shut down classes and laid off most staff.

CEHE and the Colorado attorney general’s office were back in the state trial court in Denver this week, after high-priced lawyers for Barney pursued an appeal to the Colorado Supreme Court that resulted in an order requiring the trial judge to make some additional findings.

Barney also used clever lawyers and accountants to keep making big money off the CEHE schools even after he converted them to non-profit status. When for-profit operations are converted to non-profit in such a manner, U.S. taxpayers can pay a big price.

Although its schools are shuttered, CEHE still faces additional legal challenges. The U.S. Justice Department is moving ahead with a long-pending lawsuit in which it has joined whistleblowers in pursuing False Claims Act fraud charges against the schools. The federal Consumer Financial Protection Bureau has pursued a separate investigation into CEHE’s private loan practices.

CEHE, despite the probes, bad publicity, and collapse of its schools, has continued trying to collect the high-interest private loan debt it created for its broke former students.

And CEHE has portrayed itself as a victim of a political conspiracy against it, with ongoing vitriol on Twitter from former CEO Eric Juhlin, whom the Department of Education took the rare step of suspending from federal contracting. More attacks on CEHE critics, and the Colorado attorney general office and court, have come from Barney.

Barney has charged on his grievance-heavy blog that the case brought by the Colorado AG against his schools is a “horror story of government corruption,” and “a multi-agency collusion to put schools out of business” — a supposed plot that involved not only a senior assistant Colorado attorney general, but also the executive director of accreditor ACCSC, officials of the U.S. Department of Eduction, and “the cabal of progressive haters of private colleges (David Halperin, Robert Shireman, entities funded by Arnold Ventures, Sen. Elizabeth Warren, and Sen. Richard Durbin).”

In December 2022, CEHE took its grievance campaign to a new low by suing the United States government for $500 million in the U.S. Court of Claims, asserting, as a press release statement by Juhlin contended, that the Department of Education “in coordination with ideological confederates… has been on a campaign to cripple and close as many private career colleges as possible” and that CEHE’s schools were “a victim of this campaign.”

As we reported yesterday, billionaire Betsy DeVos, who helped Barney and other predatory college operators as Donald Trump’s secretary of education but resigned over Trump’s incitement of the deadly January 6 assault on the U.S. Capitol, recently donated $250,000 to America PAC, the pro-Trump super PAC created by Musk.

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

ED Completes Pre-Acquisition Review for University of Phoenix Deal. University of Idaho Continues Hiding Details of Transaction Fees, 43 Education "High-Risk" Bonds.

[Editor's note: This article will be updated as we receive more information.]

US Department of Education (ED) sources have told the Higher Education Inquirer that the Pre-Acquisition Review for the Idaho-University of Phoenix deal was completed in November 2023 in response to a request from the University of Phoenix in June of the same year.  

The University of Phoenix is currently owned by two powerful investment firms: Apollo Global Management and Vistria Partners. But those companies have been attempting to unload the for-profit college for more than two years. The latest potential owner is the University of Idaho's affiliate organization, Four Three Education--at an initial cost of $685 million.    

ED will not require anyone to post a Letter of Credit--despite the fact that Four Three Education currently has no financial assets and will likely have to issue high-risk bonds to acquire the University of Phoenix. 

Four Three Education, and the University of Idaho, may be responsible for compensating the Department of Education for successful Borrower Defense to Repayment (fraud) claims made by tens of thousands of consumers.  While that could amount to more than a billion dollars, the University of Idaho affiliate expects to spend much less by using aggressive legal means. 

Financing for the Phoenix project has been deliberately opaque. The University of Idaho, however, has acknowledged that it may be liable for some future losses, but only up to $10 million annually. And Idaho officials, including University of Idaho President C. Scott Green, seem undeterred by these potential problems.  

The Most Recent Court Case

A court case to determine whether the University of Idaho violated open meeting laws was completed last week.  Idaho District Judge Jason Scott ruled that the University of Idaho was not in violation for holding three secret meetings followed by a quick vote on May 18, 2023. The University of Idaho claimed that secrecy was essential for the deal to occur.

The State asserted that the Idaho Board of Education did not perform due diligence for the sale, relying on President Green and his word that this was a worthwhile deal for the University of Idaho. In turn, Green admitted he did not ask important questions about competition, for fear that he would be considered naive, and that he outbid the competition.  

As Judge Scott remarked, the wisdom of the deal was not on trial. If it had, perhaps the ruling would have been different. 

Information about the competition to buy the University of Phoenix continues to be sketchy. The University of Arkansas System rejected a deal from the University of Phoenix in April 2023, weeks before the last closed door meeting. UMass Global was mentioned in the court case, but with no evidence that they were ever a serious suitor. 

The Idaho-Phoenix Scheme

The University of Idaho spent a reported seven million dollars on consultants over two months to determine whether the deal would be profitable to the University of Idaho. But little is publicly known about how the funds were spent. Hogan Lovells, President Green's former employer, was one of the organizations involved in consulting the University of Idaho. A local law firm, Hawley Troxell was also involved.  

Idaho also created a non-profit organization, Four Three Education, to act as a firewall in the event the school loses money. The current President of the University of Phoenix, Chris Lynne, will remain in place and be a member of the Four Three Education Board. 

The University of Idaho claims that the University of Phoenix will make a $150 million annual profit but they have not produced evidence. Information about Phoenix's assets are also limited, but Idaho claims the for-profit college holds $200 million in cash. How liquid (or how restricted) the cash is has not been mentioned.

Funding for the sale will be through an initial debt of $685 million, which includes more than $100 million in transaction fees. When bond interest is included, the deal is likely to cost billions of dollars according to an industry source. In an opinion piece in the Idaho Statesman, Rod Lewis, a former attorney for Micron Technology and former president of the Idaho State Board of Education stated:

Phoenix will issue $685 million in corporate bonds anticipated to be “bb” rated (known as “high risk” or “speculative” bonds). Phoenix’s estimated debt service will be $60 million to $70 million per year. It sounds risky, and it is.

We will know more when the University of Idaho produces the bond contracts and names the bond underwriters.    

Poisoning the Public Higher Ed Well

The University of Phoenix relies heavily on obfuscation, intimidation, political lobbying, and lawsuits to reduce expenses related to fraud. Given recent data on consumer complaints about the University of Phoenix, University of Idaho officials say they are prepared for contingencies related to the tens of thousands of Borrower Defense to Repayment claims. But the school or its affiliated organizations could also be liable for claims related to questionable business practices in the present and future. 

It's too early to tell whether Idaho will profit from its acquisition. But if the sale is consummated, the University of Phoenix will join a growing list of state-affiliated and non-profit robocolleges, one that includes Purdue University Global (formerly Kaplan University) and University of Arizona Global Campus (formerly Ashford University), two schools that have not lived up to their parent company names.

Related links:

Predatory Colleges, Converted To Non-Profit, Are Failing (David Halperin, Republic Report)

University of Phoenix's Sinking Ship: Who is Chris Lynne?

University of Phoenix and the Ash Heap of Higher Ed History

Fraud Claims Against University of Phoenix Continue to Mount

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

The Slow-Motion Collapse of America’s Largest University

The Growth of "RoboColleges" and "Robostudents"

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

The Higher Education Inquirer has posted a number of articles about student loan debt. In 2023, the student loan mess has reached epic proportions. Not only has the US Federal Student Aid debt portfolio reached more than $1.6 Trillion, we learned that $674 Billion was estimated to be unrecoverable. 

In California, the US District Court in Sweet v Cardona agreed to a $6 Billion settlement between student debtors and the US Department of Education. 

In Texas, a group representing for-profit colleges has sued the US Department of Education for their actions in settling Borrower Defense claims. 

And across the US, about 40 million student debtors and their families are awaiting a decision from the US Supreme Court—a decision that will not likely favor the debtors.

Borrower Defense, Subprime Colleges, Subprime Programs

Borrower Defense to Repayment claims are claims by student loan debtors that their school misled them or engaged in other misconduct in violation of certain state laws. The Department of Education may discharge all or some of the student loan debt and hold the school and its owners responsible. 

As of January 2023, there are more than three quarters of a million Borrower Defense claims against schools. And each month, about 16,000 new claims are added.  Evidence from the Sweet v Cardona case revealed that only about 35 workers were responsible for processing hundreds of thousands of claims. Those claims have been disproportionately made against a number of for-profit colleges and formerly for-profit colleges, what we call “subprime colleges.”   

Some of these subprime schools have closed (Everest College, ITT Tech, and Westwood College for example), some remain in business as for-profit colleges (like University of Phoenix and Colorado Tech), some have changed names and become covert for-profit colleges or robocolleges (like Purdue University Global, University of Arizona Global Campus, and the Art Institutes), and some schools act act like subprime colleges regardless of tax status. This includes low-return on investment programs at several US robocolleges and overly expensive graduate programs offered by 2U, an online program manager for elite colleges.  

In the Sweet v Cardona case, more than 200,000 student borrowers are expecting to receive full debt relief after years of struggling.  A Facebook group Borrower Defense-Sweet vs. Cardona currently has more than 14,000 members. 

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)

Transparency and Accountability 

The US Department of Education keeps an accounting of Borrower Defense claims, but only publishes the aggregate numbers, not institutional numbers. Those institutional numbers do make a difference in promoting transparency and accountability for the largest bad actors. So why does the Department of Education not publish those institutional numbers?

 
The National Student Legal Defense Network submitted a FOIA (22-01683F) to the US Department of Education (ED) in January 2022 asking just for that information. And what HEI has discovered is that just a small number of schools garnered the lion's share of the Borrower Defense claims. To get a digital copy of that information, please email us for a free download.

Related links:

Borrower Defense-Sweet vs Cardona (Facebook private group)  

Project on Predatory Student Lending

Sweet v. Cardona Victory (Matter of Life and Debt podcast)

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)

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

 
A Letter to the US Department of Education and Student Loan Servicers on Behalf of Student X (Heidi Weber)  

The Growth of "RoboColleges" and "Robostudents"

Subprime College Crash Continues Under the Radar

2U Virus Expands College Meltdown to Elite Universities

Maximus, Student Loan Debt, and the Poverty Industrial Complex

 
More Transparency About the Student Debt Portfolio Is Needed: Student Debt By Institution  

University of Phoenix Reportedly Considering Public Offering or New Buyer (David Halperin)

Bloomberg reports that the private equity firms Apollo Global Management and Vistria Group are considering a sale or an initial public offering for the for-profit school they jointly own, the University of Phoenix. Unnamed sources told Bloomberg an IPO could occur as soon as the third quarter of 2025.

For the past two years, Phoenix’s owners have been in talks with the University of Idaho about the state university acquiring the for-profit school. While U of Idaho President C. Scott Green has touted the deal as a revenue raiser and step into the future, the sale has bogged down amid concerns by legislators and others in the state. Last June, the two sides agreed to continue negotiations but that Phoenix’s owners could talk with other potential suitors.

The leak to Bloomberg may be a sign that Phoenix’s owners are ready to move on. But it could instead be a bluff aimed at fooling Green, a self-styled dealmaker, into revitalizing efforts to buy the school.

Green’s plan has been thwarted again and again, with negative votes in the Idaho legislature, a successful court challenge by the state’s attorney general, criticism from the state treasurer, and sharp scrutiny from news outlets in the state.

The Green school deal has assumed that operation of Phoenix would bring millions in new revenue to fund his university. But it ignores that running a for-profit college, one that has repeatedly gotten in trouble with law enforcement for deceiving students, would be a tremendous challenge: If Green pushed to end Phoenix’s predatory practices and improve student outcomes, it probably would start losing money, because predatory practices, coupled with high prices and low spending on education, have made up the school’s secret sauce. But if Green allowed the deceptive conduct to persist, the school could face more legal peril. And, whatever route he took, Green’s school might end up assuming massive liability for student loan debt the government has cancelled based on past abuses at Phoenix.

At its peak, Phoenix was the largest for-profit college in the country and got upwards of $2 billion a year in federal student aid, while reporting dismal graduation rates and high levels of loan defaults.

Phoenix’s owners pursued a deal with Idaho only after the trustees of the University of Arkansas rejected a similar purchase negotiated by that school’s president.

Phoenix’s parent company, Apollo Education Group, had been publicly traded until Apollo and Vistria took the company private in 2017.

There have been previous marriages between big state universities and large predatory for-profit colleges that were seeking to evade the stigma and regulations that the industry’s bad behavior has provoked. The University of Arizona’s purchase of Ashford University has turned into a fiasco both for Arizona, which rebranded the school University of Ariziona Global Campus (UAGC), and for Ashford’s previous owner, now-shuttered Zovio. Meanwhile, Graham Holdings sold predatory Kaplan University to Purdue, while locking that Indiana state school into a 30-year service contract that allows Graham to keep making big money. The arrangement harms Purdue’s reputation, and Purdue Global has struggled financially. Both Purdue Global and UAGC continue to enroll students in their sub-par, overpriced programs.

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