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

Liberty University Targeting Vets for Robocollege Master's Degrees

Liberty University, one of the largest Christian universities in the world, has built an educational empire by promoting conservative values and offering flexible online degree programs to hundreds of thousands of students. But behind the pious branding and patriotic marketing lies a troubling pattern: Liberty University Online has become a master’s degree debt factory, churning out credentials of questionable value while generating billions in student loan debt.

Massive Debt Load: New Federal Data

The Higher Education Inquirer has recently received a Freedom of Information Act (FOIA) response (25-01939-F) confirming the staggering financial footprint of Liberty University’s loan-driven model. According to the data, more than 290,000 Liberty University student loan debtors collectively owe over $8 billion in federal student loan debt.

This figure places Liberty among the nation’s top producers of student debt, especially at the graduate level. The data underscores the scale of Liberty’s online operation—and raises serious concerns about the value students are receiving in return for their investment.

From Moral Majority to Mass Marketing

Founded in 1971 by televangelist Jerry Falwell Sr., Liberty University was created to train “Champions for Christ.” In the 2000s, the university reinvented itself through online education, growing from a modest evangelical college into a global mega-university. Today, nearly 95,000 students are enrolled online—most of them nontraditional learners pursuing graduate credentials in fields like education, business, counseling, and theology.

This transformation was powered by digital marketing, religious rhetoric, and direct appeals to working adults and veterans. But what has emerged is a high-volume, low-engagement “robocollege” model that has led to massive student debt and mixed outcomes.

A For-Profit Model in Nonprofit Clothing

Though it operates as a nonprofit, Liberty functions much like a for-profit college. Its online programs generate an estimated $1 billion in annual revenue, mostly through federal student aid and military education benefits.

Students are funneled into fast-tracked, eight-week master’s programs that promise convenience but often fail to deliver quality or post-graduate opportunity. According to U.S. Department of Education data, median graduate student debt at Liberty ranges from $40,000 to $70,000, while returns on investment—measured in earnings and job placement—are questionable at best.

Robocollege for Warriors

Liberty markets itself as a military-friendly institution and has enrolled over 40,000 military-affiliated students in recent years. Through patriotic branding and targeted discounts, the university appeals to service members seeking affordable, faith-based education.

However, Liberty does not extend military tuition discounts to LGBTQ spouses or partners, effectively excluding same-sex families from benefits offered to heterosexual military couples. This discriminatory policy contradicts federal nondiscrimination principles but has gone unchallenged by any federal oversight agency, including the U.S. Department of Education, the Department of Defense, and the Department of Veterans Affairs.

The absence of accountability underscores a broader pattern: religious institutions like Liberty continue to receive billions in public funds while applying selective moral frameworks to exclude marginalized communities.

Liberty’s discriminatory practices add insult to injury for LGBTQ military students and their families, who are asked to sacrifice for their country but denied equal access to educational support.

Automated, Ideologically Charged Learning

Liberty’s academic model is highly automated and often superficial. Online coursework typically consists of textbook readings, quizzes, and templated discussion posts—with little direct instruction or feedback from faculty. Many students report that religious ideology is embedded in even technical fields, from business to engineering.

“They put scripture in every assignment—sometimes where it makes no sense,” said one former student.
“It’s more like an indoctrination pipeline than a graduate school,” added a military spouse who withdrew from the program.

Liberty’s online aviation program came under fire in 2023 when the VA suspended GI Bill payments due to quality concerns. Veterans were left stranded mid-program, forced to pause their education or self-fund tuition after losing federal support.

A Dual Identity: Race and Class Divides

Liberty’s racial and socioeconomic divides are stark. Its residential campus in Lynchburg, Virginia, is 74% white, with just 4% of students identifying as Black, 5% Latino, and 2% Asian or Pacific Islander. The number of African American students on campus has declined in recent years, even as national college demographics diversify.

This imbalance reflects Liberty’s historical roots: founder Jerry Falwell Sr. publicly defended racial segregation and opposed civil rights legislation in the 1960s. While Liberty has distanced itself from these positions rhetorically, the legacy remains visible in the composition and culture of the on-campus student body.

In contrast, Liberty University Online (LUO) is much more diverse. In 2017, only 51% of LUO undergraduates were white, and 15.4% identified as Black. Many LUO students are older, work full-time, and represent the multiracial, working-class America that Liberty’s campus culture does not reflect or represent.

Exploiting Faith and Patriotism

Liberty’s marketing presents education as a spiritual and patriotic calling—especially appealing to military families and first-generation students seeking purpose and stability. But behind the inspirational messaging lies a hard financial truth: many students are left with heavy debt and degrees that may not align with licensure standards or employer expectations.

Liberty pours resources into advertising and retention but spends comparatively little on faculty pay, student advising, or academic support. Complaints about misleading information, difficulty transferring credits, and job placement struggles are common.

Lack of Oversight, Political Protection

Despite numerous scandals—including leadership resignations, sexual misconduct coverups, and allegations of financial mismanagement—Liberty continues to operate with limited regulatory scrutiny. Its nonprofit status and political influence, particularly within conservative circles, shield it from the kind of oversight faced by for-profit colleges.

During the Trump administration, higher education accountability was dramatically weakened, giving Liberty and similar institutions near-total freedom to expand unchecked. That permissive environment remains largely intact.

A Cautionary Tale in Christian Capitalism

Liberty University’s rise reveals a troubling convergence of religion, profit, and political power. What’s marketed as moral education is often little more than credential inflation funded by public debt. And for students of color, LGBTQ families, and military veterans, the promises of upward mobility too often end in disappointment—and financial ruin.

With more than 290,000 Liberty student loan debtors owing over $8 billion, the scale of Liberty’s impact on the nation’s student debt crisis is undeniable. Yet its discriminatory practices, especially against LGBTQ military families, go unanswered by federal authorities.

For an institution claiming to train "Champions for Christ," Liberty’s actions tell a different story—one where profit is paramount, and equity is an afterthought.

---

The Higher Education Inquirer will continue investigating Liberty University and similar institutions, particularly those profiting from vulnerable populations under the banners of faith, freedom, and flag.

The Brown University Killing, the Educated Underclass, and the Politics of Control

When a killing becomes associated with an elite institution such as Brown University, the public narrative hardens quickly. The event is framed as an unforeseeable rupture—either the product of individual pathology or evidence that universities have failed to control dangerous people in their midst. Missing from both accounts is a deeper examination of how elite higher education produces an educated underclass, how mental illness is managed rather than treated, how international students are uniquely exposed to risk, and how mass surveillance and reporting regimes increasingly substitute for care.

Elite universities project an image of abundance: intellectual freedom, global opportunity, and moral seriousness. Yet beneath that image lies a population living with chronic insecurity. Graduate students, adjuncts, postdoctoral researchers, and international students occupy a paradoxical position—highly educated, institutionally dependent, and structurally disposable. They are central to the university’s labor model and global prestige, yet peripheral to its safety nets and decision-making structures.

Mental illness must be addressed directly, but not in the reductive way it is often invoked after violence occurs. Campus mental health systems are overwhelmed, under-resourced, and shaped by liability concerns rather than therapeutic commitments. Students in severe psychological distress frequently encounter long waitlists, fragmented care, or administrative responses that blur the line between support and discipline. Crisis is managed, not resolved.

For international students, these failures are magnified. Visa status is typically contingent on continuous enrollment and academic performance. A mental health crisis can threaten not only a student’s education but their legal right to remain in the country. Seeking help may carry perceived—or real—risks: loss of funding, forced leaves of absence, housing instability, or immigration consequences. Cultural stigma, racism, language barriers, and social isolation further discourage engagement with already inadequate systems.

Rather than expanding care, universities have increasingly expanded surveillance. Elite campuses now operate dense ecosystems of monitoring: security cameras, access controls, data analytics, behavioral intervention teams, and anonymous “concerned citizen” tip lines. These systems are justified as preventative safety measures, but they often function as tools of social control. “Concerning behavior” is deliberately undefined, allowing subjective judgments to trigger institutional scrutiny.

Such systems disproportionately affect those who already stand out—students who are foreign, mentally ill, socially isolated, or racially marginalized. For international students in particular, being flagged by a tip or threat assessment process can escalate rapidly, drawing in campus police, local law enforcement, or federal immigration authorities. Surveillance does not replace care; it displaces it.

In the aftermath of violence, political responses tend to reinforce this displacement. Donald Trump’s reactions to campus-related violence and crime have followed a consistent pattern: emphasis on “law and order,” denunciations of universities as irresponsible or ideologically corrupt, and calls for stronger policing, harsher penalties, and increased monitoring. Mental illness is often invoked rhetorically, but rarely accompanied by proposals for expanded treatment, housing stability, or protections for vulnerable students—especially non-citizens.

This framing matters. When elite campus violence is interpreted through a punitive lens, it legitimizes further surveillance, broader reporting mandates, and closer coordination between universities and law enforcement. It shifts responsibility away from institutional structures and onto individuals deemed dangerous or deviant. For foreign students and members of the educated underclass, this environment deepens fear and discourages help-seeking, even as pressure intensifies.

The concept of the educated underclass helps explain why these dynamics are so volatile. Contemporary higher education produces vast numbers of highly trained individuals for a shrinking set of secure positions. International students are recruited aggressively, charged high tuition, and celebrated as evidence of global prestige, yet offered limited pathways to stable employment or belonging. Universities benefit enormously from this arrangement while externalizing its human costs.

None of this excuses violence. Accountability is essential, and the suffering of victims must remain central. But focusing exclusively on individual blame—or on punitive political responses—allows institutions to preserve comforting myths about themselves. It obscures how structural precarity, untreated mental illness, immigration vulnerability, and surveillance-based governance interact in predictable ways.

What incidents connected to elite universities ultimately reveal is not merely individual failure, but institutional contradiction. Universities claim to value diversity while subjecting foreign students to heightened scrutiny. They speak the language of wellness while expanding systems of monitoring and reporting. Political leaders denounce campuses while endorsing the very control mechanisms that exacerbate isolation and distress.

Until universities invest seriously in mental health care, protect international students from cascading penalties, and confront the harms of surveillance-first approaches—and until political leaders move beyond carceral reflexes—elite campuses will remain places where suffering is managed rather than addressed. When that management fails, the consequences can be catastrophic.

---

Sources

American Psychiatric Association. Mental Health in College Students.
https://www.psychiatry.org/patients-families/college-students/mental-health-in-college

Eisenberg, D., et al. “Mental Health and Academic Success in College.” The B.E. Journal of Economic Analysis & Policy, 2009.

Foucault, Michel. Discipline and Punish: The Birth of the Prison. Vintage Books.

Institute of International Education. Open Doors Report on International Educational Exchange.
https://opendoorsdata.org

Lipson, S. K., & Eisenberg, D. “Mental Health and Academic Attitudes and Expectations in University Populations.” Journal of Adolescent Health, 2018.

Monahan, Torin. Surveillance in the Time of Insecurity. Rutgers University Press.

Newfield, Christopher. The Great Mistake: How We Wrecked Public Universities and How We Can Fix Them. Johns Hopkins University Press.

U.S. Department of Homeland Security. SEVP Guidance for International Students.
https://www.ice.gov/sevis

Trump, Donald J. Public statements and campaign remarks on crime, universities, and law enforcement, 2016–2024.

Zuboff, Shoshana. The Age of Surveillance Capitalism. PublicAffairs.

Madness on Campus: The Unseen Struggles of College Students

College campuses are often portrayed as vibrant places of learning, personal growth, and social exploration. For many, these years are full of excitement, new experiences, and the thrill of shaping one’s future. However, beneath the surface of campus life, a darker reality lurks—a reality that is rarely discussed but increasingly hard to ignore. The mental health struggles of college students have reached a crisis point, and the pressure to succeed academically, socially, and professionally is often pushing students to their breaking point. The “madness” on campus isn’t just about late-night study sessions or the intensity of competitive sports—it’s about the unseen battles many students are facing every day.

The Pressure Cooker of College Life

For today’s college students, the pressure to succeed is more intense than ever. In addition to excelling academically, students are expected to balance internships, extracurriculars, social lives, and the looming uncertainty of their futures. The fear of not measuring up, of failing to secure a job after graduation, or of not living up to parental expectations can be overwhelming. These pressures are compounded by financial burdens, the weight of student loans, and in many cases, the struggle to make ends meet while navigating the high cost of living.

While the modern college experience has evolved to include more support systems than in past generations, the demands placed on students have also grown exponentially. Many students find themselves caught in a cycle of stress and exhaustion, trying to juggle the high expectations placed upon them. Unfortunately, these expectations can be detrimental to their mental health, leading to feelings of inadequacy, anxiety, and depression.

The Silent Epidemic: Mental Health on Campus

According to recent surveys, mental health issues among college students have skyrocketed in the past decade. Anxiety, depression, and stress are at all-time highs, with more students reporting feeling overwhelmed and mentally exhausted. A 2023 study from the American College Health Association found that 60% of students felt “overwhelming” anxiety at some point during the previous year, and 40% reported feeling so depressed that it was difficult to function. Despite this, only a small percentage of students are receiving the mental health support they need.

The stigma surrounding mental health remains one of the biggest obstacles to seeking help. Students often feel they must appear “perfect” in order to meet academic and social expectations, and admitting to mental health struggles can feel like an admission of failure. As a result, many students suffer in silence, exacerbating their problems and making it harder to find a way out.

Campus resources, while they exist, are often overwhelmed. Counselors and therapists on many campuses are stretched thin, with waitlists sometimes extending for weeks. This leaves many students without the help they so desperately need. Additionally, the counseling services offered on many campuses are often seen as temporary fixes—band-aid solutions to much deeper, systemic issues that go unaddressed.

The Tragic Consequences of Ignored Struggles

The mental health crisis among college students is not just a matter of academic performance or emotional distress—it has life-and-death consequences. A growing number of tragic stories are emerging from campuses across the nation, with young people taking their own lives in response to their struggles. Suicide is now one of the leading causes of death among college-aged individuals, with an alarming number of students feeling they have no other option.

One heartbreaking example is Riley O’Neill, a talented swimmer at the University of Texas, whose death in 2020 shocked the college community. O’Neill, who had been struggling with depression and the overwhelming pressures of college life, took his own life after feeling isolated and unable to cope with his struggles. His death, like many others, brought attention to the unseen mental health crises occurring on campuses and underscored the urgent need for better mental health resources and support systems for students.

Stories like O’Neill’s are tragic reminders of the real, human toll of mental health struggles on campus. They should serve as a wake-up call for universities to reevaluate how they support their students and to prioritize mental health just as much as academic performance or career success.

Sexual Assault on Campus: An Overlooked Crisis

Another critical issue that often goes unaddressed is sexual assault on college campuses. According to the National Sexual Violence Resource Center (NSVRC), 1 in 5 women and 1 in 16 men experience sexual assault while in college. This staggering statistic highlights the reality that sexual violence is an endemic problem on many campuses across the country. Yet, many victims of assault feel isolated, shamed, or even responsible for the violence they’ve experienced. The trauma of sexual assault can have severe, long-lasting effects on mental health, including depression, anxiety, post-traumatic stress disorder (PTSD), and suicidal thoughts.

Part of the reason sexual assault continues to be a pervasive issue on campuses is the culture of silence that surrounds it. Victims often feel afraid to come forward, either due to the fear of not being believed, the social stigma, or the complicated legal and institutional processes that often seem to favor the accused rather than the survivor. This fear can lead to underreporting, with many victims choosing to keep their trauma hidden. Additionally, some students may feel the pressure to remain silent due to concerns about their academic and social standing on campus.

It’s crucial that campuses provide safe, supportive environments for students who have experienced sexual assault. Universities must have clear policies and resources in place to support survivors—ranging from accessible counseling services to campus security that is trained to handle these cases with sensitivity and professionalism. Survivors of sexual violence deserve to feel heard, validated, and safe while navigating the aftermath of their experiences.

The Role of Alcohol and Drug Abuse in Campus Struggles

In addition to mental health challenges and sexual assault, substance abuse is another issue that is deeply intertwined with the campus experience. Alcohol and drug use are unfortunately common among college students, and for many, partying or experimenting with substances is viewed as an integral part of social life. However, for some, these substances become a coping mechanism for the stress, anxiety, and depression that they are grappling with.

The National Institute on Alcohol Abuse and Alcoholism (NIAAA) reports that about 60% of full-time college students between the ages of 18 and 22 drink alcohol, with 40% engaging in binge drinking. Excessive alcohol consumption is often linked to risky behaviors, including unsafe sexual activity, physical injuries, and academic struggles. For students already dealing with mental health issues, alcohol can exacerbate feelings of depression and anxiety, creating a dangerous cycle of dependence and emotional turmoil.

Drugs, including prescription medication misuse, marijuana, and party drugs, are also prevalent on campuses. These substances may be used to self-medicate for anxiety or depression, or they may be part of a social trend. The consequences of substance abuse are severe, ranging from academic failure and legal issues to addiction and overdose. For students in crisis, turning to drugs and alcohol may feel like an escape, but it ultimately only deepens their problems.

Campuses need to take substance abuse seriously by offering programs that promote responsible drinking, early intervention for at-risk students, and support for those struggling with addiction. Universities must also be proactive in educating students about the dangers of alcohol and drug abuse, providing resources for students who may need help overcoming addiction, and ensuring that they have a clear path to recovery.

The Months After Graduation: A New Set of Pressures

For many students, the madness doesn’t end when they graduate. In fact, some may argue that it intensifies. The months following graduation bring a new set of challenges and anxieties. While some students quickly find jobs, others face the harsh reality of a competitive job market, uncertainty, and the pressure to establish themselves as successful adults.

Recent graduates often struggle with the transition from the structured environment of college to the ambiguity of the professional world. Many face the disappointment of job rejections or the discouragement of landing positions that don’t align with their degree or career aspirations. The search for meaningful work, combined with the financial strain of student loans, can lead to feelings of failure, depression, and isolation.

This period is especially challenging for students who may have expected to step into a job immediately after graduation or who lack a clear career path. The societal pressure to “have it all figured out” within the first few months of post-graduation life can exacerbate anxiety and self-doubt. Graduates are expected to succeed quickly, to climb the career ladder, and to live independently—yet many are struggling with the emotional fallout from the relentless pressure of college life and the overwhelming uncertainty of the future.

Moreover, the feeling of isolation can be particularly pronounced during this time. Students leave behind the community of friends and professors that supported them through college, and in the midst of job applications, networking, and interviews, they often find themselves feeling disconnected. The support systems that existed in college become harder to access, and many graduates feel like they’re navigating their post-college life alone.

A Call for Compassion and Understanding

The madness on campus isn’t just about the chaos of late-night cramming sessions or the excitement of sports games. It’s about the unseen mental health struggles that affect so many students every day. It’s about creating a system that values students as whole individuals, not just as future professionals or academic performers.

In the face of this crisis, it is imperative that colleges and universities act now. By prioritizing mental health, fostering a culture of compassion, and offering the resources and support that students need, we can ensure that the madness on campus transforms from a chaotic burden to an environment of healing, growth, and well-being. The future of higher education must be one where students are supported in every sense—academically, socially, and emotionally. Only then will we be able to protect our students from the madness that too often consumes them.

Resources for Students Struggling with Mental Health, Sexual Assault, and Substance Abuse:

If you or someone you know is struggling with any of the following issues, here are some resources to reach out to:

• National Suicide Prevention Lifeline: 1-800-273-TALK (1-800-273-8255) – Available 24/7 for confidential support.

• Crisis Text Line: Text HOME to 741741 – Free, 24/7 text support for those in crisis.

• National Sexual Violence Resource Center (NSVRC): www.nsvrc.org – Offers resources and support for sexual assault survivors.

• RAINN (Rape, Abuse & Incest National Network): 1-800-656-HOPE (4673) – National sexual assault hotline offering confidential support and resources.

• Alcoholics Anonymous (AA): www.aa.org – Provides support for individuals struggling with alcohol addiction.

• National Institute on Drug Abuse (NIDA): www.drugabuse.gov – Provides resources for students dealing with substance abuse issues.

These resources are here to help students navigate the challenges of mental health, sexual violence, and substance abuse during and after their college years. Don’t be afraid to ask for help—it’s a critical step in finding support and healing.

Robocollege Update

 

Robocolleges are a mix of for-profit and non-profit online colleges, both secular and Christian.  Their focus is on automation and reduced costs, particularly labor costs:

Instruction is delivered through automated Learning Management Systems (LMS) and online platforms, relying less on professors and more on pre-recorded lectures and automated grading. Even support staff are being replaced by chatbots.  

While some qualified individuals might be involved, educational content is often developed by large teams with varying expertise, potentially sacrificing quality for cost-effectiveness.

Marketing and advertising continue to be costly. But targeting marketing (e.g. targeting military service members and veterans, teachers, nurses, and government workers in low-income neighborhoods) can improve cost efficiency. 

Robocolleges offer degrees with a wide range of value to consumers (return on investment versus debt).  For people who need a degree (or an advanced degree) to play the game in government and medicine, these credentials may have value. 

Competency-based education and credits for life experience reduce the number of courses some students need to graduate.  Servicemembers going to Purdue Global, for example, can get an AA with as few as five college courses and a BS with as little as seven additional courses.

Cheating is probably easier for online students who are so inclined and whether these companies care is not really known.  

Southern New Hampshire (SNHU) continues to be the growth and efficiency leader, with the highest enrollment, more than 160,000 students. SNHU is also experimenting with artificial intelligence to reduce labor costs. In addition, SNHU works with Guild (aka Guild Education), which recruits workers from Walmart, Target, Waste Management, and other large employers.  

Grand Canyon (for-profit) and Liberty University (non-profit) target Christians for online credentials.  But oppressive debt is a concern with some of their programs. Social mobility for students is subpar.  

Purdue University Global and University of Arizona, Global Campus are two former for-profit colleges now owned by state universities. Information about their financial status is sketchy. Like SNHU, Purdue Global works with Guild to recruit working folks.  Purdue Global owes its online program manager. Kaplan Education, about $128 million.  Arizona Global has had financial difficulties which have affected the University of Arizona's bottom line.  

The University of Phoenix has returned to profitability by reducing instruction and student services by $100 million a year and legal costs by $50 million a year.  Consumers continue to file fraud complaints by the tens of thousands.  And debt is an enormous problem with former students.  It's not apparent whether Phoenix can maintain such enormous profits, but its future as a non-profit affiliated with the University of Idaho may reduce its tax burden and legal liabilities. 

Here are the most recent numbers from the US Department of Education College Navigator:

American Intercontinental University: 89 full-time instructors for 14,333 students.
American Public University System has 332 F/T instructors for 48,688 students.
Aspen University has 27 F/T instructors for 7,386 students.
Capella University: 180 F/T for 39,727 students.
Colorado State University Global: 40 F/T instructors for 9,565 students.
Colorado Technical University: 55 F/T instructors for 24,808 students.
Devry University online: 61 F/T instructors for 26,384 students.
Grand Canyon University has 550 F/T instructors for 101,816 students.*
Liberty University: 735 F/T for 96,709 students.*
Purdue University Global: 337 F/T instructors for 45,125 students.
South University: 41 F/T instructors for 7,707 students.
Southern New Hampshire University: 130 F/T for 164,091 students.
University of Arizona Global Campus: 122 F/T instructors for 34,190 students.
University of Maryland Global: 177 F/T instructors for 55,838 students.
University of Phoenix: 80 F/T instructors for 88,891 students.
Walden University: 235 F/T for 42,312 students.

*Most F/T faculty serve the ground campuses that profit from the online schools. 

 

Related links:

Robocolleges, Artificial Intelligence, and the Dehumanization of Higher Education (2023)

AI-ROBOT CAPITALISTS WILL DESTROY THE HUMAN ECONOMY (Randall Collins, 2023)

Guild Education: Enablers of Anti-Union Corporations and Subprime College Programs (2021)

The Growth of "RoboColleges" and "Robostudents" (2019)

The Higher Education Assembly Line (2019)

 

 

 

 

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/

 

 

How Immigration Has Fueled the Rise of Trumpism—and Changed Higher Education

In the United States, immigration has long been framed as a symbol of national pride—a beacon for the “huddled masses yearning to breathe free.” But in recent decades, as demographic, economic, and cultural shifts have accelerated, immigration has also become a flashpoint for political backlash. That backlash has taken on a powerful form in Trumpism: a nationalist-populist movement steeped in nativist fear, economic resentment, and white grievance politics. What’s often missing in mainstream analysis is how higher education—both as a driver and a symbol of immigration—has become entangled in this struggle.

At the center of this complexity is a contradictory truth: while much of Trumpism is fueled by anti-immigrant rhetoric and fear of demographic change, some of its most visible leaders and financial backers are themselves immigrants or children of immigrants, particularly from India. In the elite zones of tech, business, and politics, conservative Indian Americans are shaping immigration policy, university priorities, and even culture war narratives in ways that reinforce the very Trumpist ideology they supposedly should oppose.

American higher education has undergone a transformation over the past four decades—from a public good to a privatized, competitive marketplace. As state funding dried up, institutions turned to other sources of revenue: tuition, corporate partnerships, real estate development, and international students. Colleges and universities—particularly large public research institutions and elite private schools—ramped up recruitment of foreign students who could pay full price, especially from China, South Korea, Saudi Arabia, and increasingly, India.

Today, Indian nationals are the second-largest group of international students in the U.S., particularly in STEM fields and graduate programs. Their tuition dollars help subsidize faculty salaries, administrative bloat, and research labs. H-1B visa holders, many of them Indian engineers and tech workers, have become a cornerstone of the U.S. tech workforce—and a key component of university-sponsored visa pipelines. In many graduate programs, foreign students are the programs.

At the same time, working-class Americans—especially in rural areas and former manufacturing hubs—have watched colleges become unrecognizable. For many, the university has become a symbol not of opportunity but of exclusion: a place that speaks a foreign language (literally and culturally), employs foreign-born TAs, and caters to elite global interests while raising tuition and reducing services.

One of the most paradoxical developments in the Trumpist era is the rise of conservative Indian Americans as major players in business, politics, and education policy. Figures like Vivek Ramaswamy, a biotech entrepreneur and 2024 GOP presidential candidate, have become darlings of the MAGA movement, espousing anti-DEI rhetoric, rejecting multiculturalism, and calling for the dismantling of the administrative state—including large swaths of the Department of Education. Kash Patel, Ajit Pai, and others have served in prominent Trump administration roles, often pushing deregulation, aggressive nationalism, and the rollback of civil rights protections.

Many of these individuals are highly educated products of elite U.S. universities—Princeton, Harvard, Yale—who advocate for a vision of America rooted in "meritocracy," free markets, and Christian-coded traditional values. Their rise is no accident. They often come from upper-caste, upper-class families in India and align ideologically with India’s ruling Hindu nationalist party, the BJP. That ideology—Hindutva—is increasingly aligned with global authoritarian movements, including Trumpism, Putinism, and Zionist ethnonationalism.

In higher education, this conservative cohort supports crackdowns on campus protest, restrictions on Critical Race Theory, and the dismantling of diversity programs. Some even promote a two-tier immigration system: open pathways for high-skilled workers and university graduates like themselves, and closed doors for asylum seekers, refugees, and undocumented immigrants.

Trumpist Republicans—often with support from conservative immigrants—have increasingly turned higher education into a battleground in the culture wars. In red states, new legislation and executive orders have targeted DEI offices, faculty unions, and ethnic studies departments. They have moved to restrict international student programs, especially for students from China and the Middle East, while simultaneously undermining tenure protections and academic freedom. Crackdowns on campus protests, often under the guise of "free speech," have been used to suppress progressive voices and student organizing.

As faculty ranks have become more diverse—and more contingent—conservatives have fought to reassert traditional hierarchies, often by using foreign-born faculty and graduate students as a wedge. Critics of tenure and academic “liberalism” claim that universities are out of touch with American values and serve foreign interests. Meanwhile, the same institutions continue to capitalize on the global student market, building campuses in Dubai and Singapore while closing rural extension centers at home.

Trumpism is not just a reaction to immigration itself, but to who benefits from it. At the top are elite immigrants—often from privileged caste backgrounds in India or affluent families in China—who attend top-tier universities and enter high-income fields. Below them are millions of working-class Americans saddled with student loan debt, gig jobs, and eroded social status. And beneath them still are the invisible laborers of higher education: the adjuncts, food service workers, janitors, and maintenance crews—many of them immigrants without documentation or legal protections.

This stratification of labor is mirrored in the classroom. International students often receive better advising, housing, and visa support than low-income domestic students, particularly Black, Latino, and Native students. Colleges may invest in ESL services and global partnerships while cutting mental health counseling, rural outreach, and Pell-eligible student aid.

Immigration is not the cause of Trumpism—but it is the mirror in which many Americans see their own social decline. And higher education has played a central role in projecting that mirror. When universities prioritize international growth over local development, or when elite immigrants champion policies that punish the poor and undocumented, they unwittingly feed the very movement that seeks to close the gates behind them.

Trumpism, for all its contradictions, thrives on this resentment. It exploits the divisions between “model minorities” and “undeserving poor,” between elite institutions and everyday people. It turns the American university—from Berkeley to Ohio State—into a symbol of what has been lost, even as it pretends to offer a way forward.

Immigration and higher education are deeply interwoven in the American story. But as higher ed becomes increasingly globalized, privatized, and stratified, it risks alienating the very people it claims to serve. The rise of Trumpism is not just a rejection of immigrants—it is a rejection of an education system that many see as rigged, elitist, and complicit in their decline.

The challenge for those of us in higher education—and especially for immigrants who have benefitted from it—is to confront these contradictions honestly. We must rethink who higher education serves. We must recognize how caste, class, and color operate not only across borders but within them.

For the Higher Education Inquirer, this is not a call for scapegoating immigrants, but for deeper analysis. How did we arrive at a system where elite global mobility coexists with mass domestic precarity? And what would it look like to build a higher education system rooted in justice—not just for the few who arrive, but for the many who are left behind?

The Educated Underclass Without Borders

Gary Roth’s The Educated Underclass describes a growing population of college-educated people who, despite credentials and effort, are increasingly locked out of stable, dignified work. While Roth’s analysis focuses primarily on the United States, the framework extends naturally—and urgently—to international students educated in the U.S. and to the global labor markets they enter after graduation. When immigration regimes, artificial intelligence, and comparative higher education systems are considered together, the educated underclass emerges not as a national failure, but as a transnational condition produced by modern higher education itself.

U.S. colleges and universities aggressively recruit international students, presenting the American degree as a global passport to opportunity. These students pay higher tuition, subsidize institutional budgets, and enhance global prestige. What is far less visible is that access to the U.S. labor market after graduation is narrow, temporary, and increasingly unstable. Programs such as Optional Practical Training and the H-1B visa tie legal status to continuous employment, transforming graduates into a compliant workforce with little leverage. Job loss does not merely mean unemployment; it can mean removal from the country.

Indian students in STEM fields illustrate this dynamic clearly. Drawn by promises of innovation and demand, they enter graduate programs in computer science, engineering, and data analytics, only to find themselves funneled into a lottery-based visa system dominated by outsourcing firms and consulting intermediaries. Visa dependency suppresses wages, discourages job mobility, and creates a workforce that is educated but structurally insecure. Roth’s educated underclass is visible here, but intensified by deportability.

Artificial intelligence compounds this precarity. Entry-level technical and analytical roles—software testing, junior programming, data cleaning, research assistance—are increasingly automated or augmented. These were precisely the jobs that once absorbed international graduates. AI-driven labor contraction now collides with rigid visa timelines, turning technological displacement into enforced exit. Immigration policy quietly performs the work of labor market triage.

Chinese students in business, economics, and the social sciences encounter a different version of the same trap. U.S. employers are often reluctant to sponsor visas outside STEM, while Chinese labor markets are saturated with domestically educated elites. Meanwhile, geopolitical tensions—intensified during the Trump administration—have normalized suspicion toward Chinese students and scholars, particularly in research-adjacent fields. The American degree, once a clear marker of distinction, increasingly yields managerial precarity, contract work, or prolonged dependence on family support.

China’s own higher education system complicates this picture. Massive state investment has expanded elite universities and research capacity, producing millions of highly credentialed graduates each year. Yet employment growth has not kept pace. Underemployment among Chinese graduates has become routine, and returnees from U.S. programs often find that their foreign credentials no longer guarantee elite status. In both systems, education expands faster than secure work, producing surplus aspiration and managed disappointment.

Canada is often presented as a counterexample to U.S. hostility toward international students, but its outcomes reveal similar structural dynamics. Canadian universities rely heavily on international tuition, while immigration pathways—though more predictable—still channel graduates into precarious labor markets. Many international students end up in low-wage service or contract work unrelated to their degrees while awaiting permanent residency. At the same time, domestic Canadian graduates face rising competition for limited professional roles, particularly in urban centers. The result is not inclusion, but stratified precarity distributed across citizenship lines.

These global dynamics have domestic consequences that are rarely acknowledged honestly. International students and foreign graduates are increasingly perceived as occupying educational and professional positions that might otherwise go to people whose families have lived in the United States for generations. In elite universities, graduate programs, and competitive labor pipelines, institutions often prefer international applicants who pay full tuition, arrive pre-trained by global inequality, and are more willing to accept insecure work.

For historically rooted communities—Black Americans, Indigenous peoples, and long-established working-class families—the resentment is especially acute. After centuries of exclusion from education and professional employment, they are told that opportunity is scarce and must now be globally competitive. The contradiction is profound: a nation that never fully delivered educational justice at home markets opportunity abroad while declaring it unattainable domestically.

Trump-era immigration policies exploited this tension by framing foreign students and workers as threats rather than as participants in a system designed by elites. Travel bans, visa restrictions, attacks on OPT, and open hostility toward immigrants transformed structural failure into cultural conflict. Yet the animosity did not originate with Trump. It reflects decades of policy choices that expanded higher education without expanding secure employment, substituted global labor arbitrage for domestic investment, and left working- and middle-class Americans to absorb the losses.

Universities play a central role in sustaining this arrangement. They function as global sorting machines, extracting tuition from abroad, conferring credentials with declining labor-market value, and disclaiming responsibility for outcomes shaped by immigration law and AI-driven contraction. Career services rarely confront these realities directly. Transparency would threaten enrollment pipelines, so silence prevails.

In Roth’s terms, this enlarges the educated underclass while fracturing it internally. Domestic and foreign graduates are pitted against one another for shrinking footholds, even as both experience debt, insecurity, and diminishing returns on education. The conflict is horizontal, while power remains vertical.

The educated underclass is no longer emerging. It is already global, credentialed, indebted, and increasingly unnecessary to the systems that trained it. Until institutions, employers, and governments in the U.S., Canada, China, and beyond are held accountable for the scarcity they engineer, higher education will continue to function not as a ladder to mobility, but as a mechanism for managing inequality across borders.

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Sources

Gary Roth, The Educated Underclass
Harriet A. Washington, Medical Apartheid
Elisabeth Rosenthal, An American Sickness
OECD, Education at a Glance
U.S. Citizenship and Immigration Services, OPT and H-1B program materials
National Foundation for American Policy, reports on H-1B labor markets
Georgetown University Center on Education and the Workforce, credential inflation studies
International Labour Organization, global youth and graduate employment reports
China Ministry of Education, graduate employment statistics
Statistics Canada, international students and labor market outcomes
David Graeber, Bullshit Jobs
Richard Wolff, writings on global labor surplus and credentialism

The Hidden Crisis: Debt and Inequality Among Ph.D. Graduates

For decades, a Ph.D. has been viewed as the pinnacle of academic achievement. Yet behind the prestige lies a growing financial burden that disproportionately affects students in the humanities, education, social sciences, and health-related fields. As the cost of higher education continues to rise and funding disparities persist across disciplines, many doctoral graduates are finding themselves saddled with unsustainable levels of debt—and limited job prospects to match.

Data from the Survey of Earned Doctorates (SED), administered by the National Science Foundation, shows that new Ph.D. recipients in the humanities and arts are among the most likely to graduate with high levels of education-related debt. In 2020, 18% of these graduates reported more than $50,000 in debt, compared to under 5% of engineering and physical sciences Ph.D.’s. Nearly 90% of engineering, math, and physical sciences graduates completed their programs with less than $10,000 in debt. This level of disparity reflects long-standing inequities in how doctoral education is funded.

Yet the humanities are not alone. Several other doctoral fields show similar or worse financial patterns, often with little public attention.

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Education Ph.D.’s: High Ideals, Heavier Debt

One of the most indebted groups in graduate education is those earning Ph.D.’s in education. In 2020, just 47% of education doctoral graduates left without any graduate education debt—down from 62% in 2004. Despite being among the lowest-paid doctoral degree holders, education Ph.D.’s are expected to take on leadership roles in schools, districts, or universities—many of which are increasingly reliant on part-time labor or austerity budgets. The mismatch between debt incurred and income potential is among the worst in higher education.

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Psychology and Behavioral Sciences: A Pipeline to Precarity

Students pursuing doctorates in psychology and related behavioral sciences also face rising debt, especially in clinical and counseling specializations that require unpaid or underpaid internships and practicum hours. While 63% of new graduates in this area reported less than $10,000 in debt in 2020, a significant minority fell into the $30,000 to $90,000+ range. The financial burden is compounded by licensing requirements and low reimbursement rates in mental health professions. Many psychologists work in strained public systems, often serving low-income and vulnerable populations.

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Health-Related Doctorates: Not All Medical Degrees Pay Off

Professional doctorates in healthcare—such as the Doctor of Physical Therapy (DPT), Doctor of Nursing Practice (DNP), and Doctor of Pharmacy (PharmD)—are often marketed as high-demand credentials. Yet they carry massive tuition bills and limited institutional funding, especially compared to MD or Ph.D. programs. Graduates in these areas routinely report $100,000 to $150,000 in debt, with some exceeding $200,000. And as new programs proliferate—especially at private and for-profit institutions—the job market has become increasingly saturated, particularly for pharmacists and physical therapists.

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Social Work and Public Service: Debt-Fueled Altruism

Doctoral degrees in social work and public administration are frequently pursued by those seeking to lead in nonprofits, public agencies, or higher education. But the returns are modest. Many social work Ph.D.’s and DSWs leave school with $50,000 to $100,000 or more in debt. Jobs are often emotionally demanding, poorly compensated, and subject to burnout. Despite the “practical” nature of these degrees, financial insecurity remains a constant for many graduates.

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Race, Debt, and Structural Inequity

Debt burdens also mirror longstanding racial and economic inequalities in higher education. Between 2015 and 2020, 55% of American Indian/Alaska Native and Black/African American humanities and arts Ph.D.’s graduated with more than $30,000 in debt—far higher than the average for other racial and ethnic groups. Indigenous students in particular face disproportionate debt levels relative to their representation and institutional support. These figures reflect a broader pattern of exclusion, where marginalized communities pay more to gain access to degrees that offer fewer economic returns.

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The Polarization of Graduate Debt

Across nearly all disciplines, the period from 2015 to 2020 saw a shift in the distribution of graduate debt toward the extremes: more students finished either with no debt or with very high debt. For humanities and arts Ph.D.’s, the share of debt-free graduates rose by 8 percentage points. But at the same time, the share with over $90,000 in debt also increased, pointing to a bifurcated system where some students are fully funded while others are left financially exposed.

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An Unequal System of Doctoral Education

The disparities in debt and job prospects among Ph.D. fields reveal deep problems in the political economy of U.S. graduate education:

• STEM fields benefit from federal research funding and industry partnerships that help subsidize tuition and provide stipends.

• Humanities, education, and social work programs rely heavily on student loans and tuition revenue, often at under-resourced public institutions.

• Women and students of color are disproportionately represented in fields with high debt and low pay, reinforcing broader patterns of inequality.

Despite these challenges, universities continue to market Ph.D. programs as tickets to professional success and personal fulfillment—ignoring the growing body of evidence that for many, the costs may outweigh the benefits.

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A Call for Structural Reform

The growing debt crisis among Ph.D. graduates in non-STEM fields reflects more than just poor financial planning—it reveals a system in which certain kinds of knowledge and service are undervalued. As policymakers and institutions consider the future of graduate education, they must confront the realities of underfunding, labor precarity, and racial inequality that have become embedded in the Ph.D. pipeline.

Without meaningful reform—including equitable funding, debt relief, and transparent job placement data—the doctorate risks becoming a credential for the privileged and a trap for the rest.

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Sources

• Survey of Earned Doctorates (SED), National Center for Science and Engineering Statistics

• Humanities Indicators, American Academy of Arts & Sciences

• American Psychological Association (APA)

• American Association of Colleges of Nursing (AACN)

• American Physical Therapy Association (APTA)

• National Center for Education Statistics (NCES)

• Andrew W. Mellon Foundation

• National Endowment for the Humanities

From Promise to Predicament: The Fed’s View of Higher Education Fifteen years of data, warnings, and contradictions about America’s student debt crisis.

Over the past fifteen years, the Federal Reserve System has quietly amassed one of the most extensive and consistent bodies of research on student loan debt in the United States. Across its twelve regional banks and the Board of Governors in Washington, the Fed has produced a series of studies that track not just the growth of borrowing, but its unequal burden across race, class, institution type, and geography. The findings confirm what many borrowers already know: the promise of higher education increasingly comes with financial risk, social inequality, and personal hardship.

The Fed's research consistently shows that student loan debt limits economic mobility. It lowers homeownership rates, delays marriage and family formation, and contributes to intergenerational poverty—especially among first-generation college students, borrowers of color, and those who attended for-profit or low-value institutions. While college graduates generally earn more over a lifetime than non-graduates, the costs of attendance—and the debt needed to finance it—often erode that advantage.

The New York Fed was among the first to quantify the scale of the crisis. A 2014 staff report revealed the steep growth in borrowing and the rising rates of delinquency. Follow-up research found that students who failed to complete degrees were the most likely to default. Even among those who did graduate, the risks varied widely depending on the school attended. For-profit college students, in particular, had disproportionately poor outcomes—higher debt levels, higher unemployment, and lower earnings.

In New England, the Boston Fed found that despite the region’s high tuition costs, default rates were relatively low. Researchers attributed this to a strong labor market and high levels of family support. But the same studies also showed that borrowers from disadvantaged backgrounds were still more likely to struggle with repayment, even in affluent states.

More recent work from the Federal Reserve Board's Survey of Household Economics and Decisionmaking (SHED) adds further evidence that the student loan crisis is uneven. Black and Latino borrowers were more likely to attend institutions with poor outcomes and were more likely to fall behind on payments after the federal pause ended in 2023. Older Americans, including many Parent PLUS borrowers and returning students, also experienced sharp declines in credit scores when payments resumed.

Other Fed branches have asked deeper structural questions. The Richmond Fed in 2022 examined whether increases in federal loan limits contributed to tuition inflation. Their findings were nuanced: while tuition sometimes rose in tandem with expanded loan access, the relationship was inconsistent and depended heavily on institutional behavior. Meanwhile, the Chicago Fed found that families who lost wealth during the Great Recession relied more heavily on student loans, underscoring that borrowing is often a symptom of broader economic vulnerability, not just tuition hikes.

There are tensions among these findings. Some studies emphasize the long-term value of a college degree, arguing that despite the debt, graduates still fare better than non-graduates. Others focus on the risks—especially for those who never finish or who attend predatory institutions. Some research supports targeted loan forgiveness for the most vulnerable; others point to the need for broader systemic reforms to financing, accountability, and access.

What is clear across all these studies is that the federal student loan system, once designed to expand opportunity, now plays a major role in reproducing inequality. Without deeper changes to how higher education is funded and delivered, student loan debt will continue to act as a drag on economic growth and a burden on the middle and working classes.

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Chart: Median Student Loan Balances by Degree Status and Institution Type
(Based on data from the Federal Reserve Board’s SHED, 2024)

Degree Completed     | Institution Type     | Median Balance
---------------------|----------------------|-----------------
No Degree            | For-Profit College   | $15,700
Associate’s Degree   | Community College    | $12,400
Bachelor’s Degree    | Public University    | $20,200
Bachelor’s Degree    | Private Nonprofit    | $26,000
Graduate Degree      | Public University    | $35,000
Graduate Degree      | Private Nonprofit    | $49,000

This chart highlights how both degree completion and institution type shape borrowing outcomes. Borrowers with no degree, particularly those who attended for-profit colleges, face high risk with lower earning potential. In contrast, graduate students from private institutions carry the highest debt loads, but typically with greater long-term income.

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Sources:

• Federal Reserve Board, Survey of Household Economics and Decisionmaking (2014–2024)

• New York Federal Reserve, Student Loan Borrowing and Repayment Behavior (2014, 2019)

• Boston Federal Reserve, Student Loan Debt and Economic Outcomes in New England (2014, 2016)

• Richmond Federal Reserve, Do Federal Student Loans Drive Tuition? (2022)

• Chicago Federal Reserve, The Shadow of the Great Recession and Student Loan Burden (2024)

• St. Louis Federal Reserve, Students Are Borrowing Too Much—or Too Little (2019)

“The Big Beautiful Bill”: A Catastrophic Blow to College Affordability

The so-called “Big Beautiful Bill,” pushed through the Senate as part of a massive reconciliation package, represents one of the most aggressive federal overhauls to higher education funding in modern history. Masked behind rhetoric of “budget responsibility” and “efficiency,” the legislation systematically guts key pillars of college affordability—Pell Grants and federal student loans—placing the greatest burden on working-class families, part-time students, and graduate borrowers.

The bill slashes the foundation of federal student aid by redefining Pell Grant eligibility in ways that dramatically reduce access. Students who receive full-ride scholarships or other substantial grants would no longer qualify for Pell, regardless of their economic need. Part-time students—who make up a substantial portion of today’s college population, particularly in community colleges—are completely excluded. The credit threshold for receiving a full Pell award jumps from 24 to 30 credit hours per year. This effectively penalizes students who work while studying or attend school at night, demanding a pace that many cannot maintain.

Even for those who still qualify, Pell awards may shrink or disappear. According to the Congressional Budget Office, more than 10 percent of current Pell recipients would lose their grants entirely, and over half would see reductions. The bill’s language also includes a provision to count foreign income in determining eligibility, starting in the 2026–2027 academic year—a move that disproportionately affects immigrant and dual-national families.

In a superficial nod to stabilization, the bill allocates $10.5 billion to prevent near-term Pell shortfalls. But this does nothing to address the deep structural harm inflicted by these new restrictions. The House and Senate remain divided over the specific credit-hour thresholds, but both versions aim to cut costs at the expense of the most vulnerable students.

On the student loan front, the legislation is equally ruthless. Subsidized federal loans are eliminated entirely, forcing interest to accrue while students are still in school. This shift alone will increase student debt burdens by thousands of dollars per borrower. Graduate PLUS loans, a vital resource for those pursuing advanced degrees in education, health care, and social work, are eliminated. Parent PLUS loans, used heavily by middle-income families, are capped at $65,000—regardless of tuition inflation or program costs.

Income-driven repayment plans, including the Biden administration’s SAVE plan, are scheduled for termination in 2026. In their place, borrowers will be offered a limited menu: a standard 10- to 25-year fixed repayment plan or a newly created “Repayment Assistance Plan” tied to adjusted gross income. Gone are provisions for economic hardship deferments. Time spent in medical, legal, or other professional residencies will no longer count toward loan forgiveness. For future professionals in high-demand fields, this is not just a technical change—it is a direct economic assault.

The bill’s architects claim these cuts are necessary to “streamline” federal spending and fund tax reductions. But the effect is clear: stripping away the scaffolding that allows millions of Americans to pursue higher education. Private lenders stand to gain the most, as students increasingly turn to high-interest loans to fill the financial vacuum.

This is not a plan to reform education—it’s a plan to ration it.

For years, policymakers have debated whether the federal government should play a leading role in making college accessible and affordable. This bill answers that question with chilling clarity: the market will decide who gets educated, and debt will decide who succeeds. Low-income and first-generation students, single parents, and adult learners will be the first casualties in this new regime. Graduate education, once seen as a ladder to mobility, becomes a privilege for the already wealthy.

The higher education sector is already under enormous strain from declining enrollments, rising costs, and growing skepticism about the value of a degree. This legislation pours gasoline on that fire. Institutions serving working-class students, especially public regional colleges and community colleges, will be hit hardest. We are witnessing not just a rollback of financial aid but the strategic dismantling of public higher education as a gateway to opportunity.

The “Big Beautiful Bill” is not beautiful. It is brutal.

It deserves not only scrutiny but resistance—from students, educators, and every citizen who believes that education should be a public good, not a private luxury. The damage this bill will do cannot be overstated. But it must be understood—and it must be challenged.

New higher education enrollment numbers: a mixed bag (Bryan Alexander)

How is higher education enrollment changing?

Today the National Student Clearinghouse Research Center published its first analysis of student numbers for fall 2024.  This is important data, as ever, and I’ll dig into it with this post.

It’s a mixed bag. Total enrollment rose, but a key indicator fell.

 

One caution: this is the first such report for the semester, representing just over one half of the Center’s respondents’ data. They’ll revise this over the next few months.

The good news: total post-secondary enrollment rose 2.9% compared to fall 2023, with undergrad numbers rising 3% and grad school up 2.1%.   The heart of this growth is to be found in community colleges, who are using dual enrollment (teaching high school students) to rebuild their classes for the third year in a row.  For-profit colleges are also doing very well, seeing their numbers up 5%.

The main degree growth is not from graduate or undergrad degrees (not the BA, BS, MA, PhD, and so on), but from undergrad certificate seekers (a 7.3% rise).

There are other positive findings.  The sophomore retention rate (the proportion of first-year students who return for their second year) did better, as the drop out rate decreased.  Returning student numbers were higher.  In terms of race, all non-white populations enjoyed increased numbers: “Undergraduate and graduate enrollments for Hispanic, Black, Asian, and Multiracial students are seeing strong growth this fall.”  Historically black colleges and universities (HBCUs) and Hispanic-serving institutions (HSIs) all saw increases. In terms of economic class, there were more students from the lowest economic quintile.

In terms of gender, there were no meaningful differences, as both male and female numbers rose at roughly the same amount.

Geographically, nearly all states enjoyed an increased in overall enrollment at the undergrad level:

At the graduate level things were still rosy, although more mixed:

Primarily online institutions (think Arizona State, Southern New Hampshire, Western Governors, etc.) saw enrollment rise by more than 6%.

Yet with all of these bright spots, the Clearinghouse shared some bad news.  First-year student enrollment dropped 5% overall.  This decline reversed gains made in 2023, taking things back to 2022 levels, and was especially pronounced in public and private four year institutions (-8.5% and -6.5%):

In terms of age, “an almost 6% drop in the number of 18-year-old freshmen (a proxy for those enrolling immediately after high school graduation) accounts for most of the decline.”  In terms of economic class, this decline was especially true of state schools serving more Pell-eligible students, which saw drops of 10% and more.

Further, one negative sign of race and enrollment involves the caucasian population: “Undergraduate White students, on the other hand, continue to see enrollment declines (-0.6%).“  The Chronicle of Higher Ed generated this helpful and contrasting graphic:

I and others who attended a briefing asked Clearinghouse staff to speculate on the decline.  Vice president for research Doug Shapiro thought multiple factors were in play: the FAFSA chaos, the attraction of the job market (unemployment being low), fear of student debt.  The Supreme Court ruling against academic affirmative action might have discouraged some minority students from applying, at least to elite institutions.

What might we take away from this report?

I need to preface my remarks by reminding readers that enrollment matters for two vital reasons.  To the extent that the United States wants more people to have more college study, the number of students who actually pursue higher education indicates how successful we are in reaching that goal.  And since we’ve effectively privatized most of higher education economics, student enrollment means essential revenue for keeping college and university doors open.

First, the Clearinghouse report is very good news for community colleges, who are enjoying growth after years of losses.  Their strategy of reaching into high schools is making up for their losses in the rest of their communities. It’s also good for for-profits, who saw their sector flattened during the Obama administration.

Second, certificates are in the lead.  The Center’s director told me that this sounds like a short-term trend, as the number of students pursuing shorter-term credentials is continuing to grow.  How many campuses will be inspired to expand their own certificate offerings as a result, sensing a growing market?

Third, there aren’t any clear signs of students responding to abortion policies.  That is, we might expect younger people (who tend to be more liberal) and especially younger women to avoid states with strict abortion bans, but the geographic data does not bear this out.

Fourth, in terms of how we think about higher education, the major developments here focus on the parts of academia which don’t normally get much attention or media buzz: for-profits, community colleges, certificates, online learning.  I don’t know if most academics in public and non-profit higher ed, and most Democrats, will be happy to see for-profits strengthen.

Fifth, this decline in first-year students could depress enrollments for years to come.  It might mean fewer sophomores next year, fewer juniors the year after, and so on.  Colleges will have to do heroic feats to boost retention, and high schools ditto to expand graduation and application, to nullify this issue.

Sixth, institutions which teach mostly online continue to grow. This is a long-running trend and feels likely (to me) to keep building up.

Seventh, it’s good to see higher ed actually grow after more than a decade of decline.  We’re still nowhere near the numbers we enrolled in 2012’s peak and have a long way to go before reaching that.  Meanwhile, America’s total population has grown, thanks to immigration, so we have farther still to go in reaching our peak proportion.

One last note: keep an eye out for updates to this data, as the Clearinghouse gets more evidence from its affiliated institutions.

This article first appeared at BryanAlexander.org