Higher Education, Technology, and A Growing Social Anxiety

The Era We Are In

We are living in a neoliberal/libertarian era filled with technological change, emotional and behavioral change, and social change. An era resulting in alienation (disconnection/isolation) for the working class and anomie (lawlessness) among elites and those who serve them. We are simultaneously moving forward with technology and backward with human values and principles. Elites are reestablishing a more brutal world, hearkening back to previous centuries--a world the Higher Education Inquirer has been observing and documenting since 2016. No wonder folks of the working class and middle class are anxious. 

Manufactured College Mania

For years, authorities such as the New York Federal Reserve expressed the notion (or perhaps myth) that higher education was an imperative for young folks. They said that the wealth premium for college graduates was a million dollars over the course of a lifetime--ignoring the fact that a large percentage of people who started college never graduated--and that tens of millions of consumers and their families were drowning in student loan debt. 

2U, Guild Education, and a number of online robocolleges reflected the neoliberal promise of higher education and online technology to improve social mobility.  The mainstream media were largely complicit with these higher ed schemes. 

2U brought advanced degrees and certificates to the masses, using brand names such as Harvard, MIT, Yale, USC, University of North Carolina, and the University of Texas to promote the expensive credentials that did not work for many consumers. 

Guild Education brought educational opportunities to folks at Walmart, Target, Macy's and other Fortune 500 companies who would be replacing their workers with robotics, AI, and other technologies. But the educational opportunities were for credentials from subprime online schools like Purdue University Global. Few workers took the bait. 

As 2U files for bankruptcy, it leaves a number of debt holders holding the bag, including more than $500M to Wilmington Trust, and $30M to other vendors and clients, including Guild Education, and a number of elite universities. Guild Education is still alive, but like 2U, has had to fire a quarter of its workers, even downsizing its name to Guild, as investor money dries up. It continues to spend money on its image, as a Team USA sponsor.    

The online robocolleges (including Liberty University, Grand Canyon University, University of Phoenix, Purdue University Global, and University of Arizona Global)  brought adult education and hope to the masses, especially those who were underemployed. In many cases, it was false hope, as they also brought insurmountable student debt to American consumers. Billions and billions in debt that cannot be repaid, now considered toxic assets to the US government. 

Along the way there have been important detractors in popular culture, especially on the right. Conservative radio celebrity Dave Ramsey, railed against irresponsible folks carrying lots of debt, including student loan debt. He was not wrong, but he did not implicate those who preyed on student consumers. On the left, the Debt Collective also railed against student loan debt, long before the right, but they were often ignored or marginalized. 

Adapting to a Brutal System

The system  works for elites and some of those who serve them, but not for others, even some of the middle class. Good jobs once at the end of the education pipeline have been replaced by 12-hour shifts, 60 hour work weeks, bullsh*t jobs, and gig work. 

Working-class Americans are living shorter lives, lives in some cases made worse not so much by lack of education, but by the destruction of union jobs, and by social media, and other intended and unintended consequences of technology and neoliberalism. Millions of folks, working class and some middle class, who have invested in higher education and have overwhelming debt and fading job prospects, feel like they have been lied to.

We also have lives made more sedentary and solitary by technology. Lives made more hectic and less tolerable. Inequality making lives too easy for those with privilege and lives too difficult for the working class to manage. Lives managed by having fewer relationships and fewer children. Many smartly choosing not to bring children into this new world. All of this manufactured by technology and human greed.  

The College Dream is Over...for the Working Class

There are two competing messages about higher education: the first that college brings opportunity and wealth and the second, that higher education may bring debt and misery. The truth is, these different messages are meant for two groups: pushing brand name schools and student loans for the most ambitious middle class/working class and a lesser form of education for the struggling working class. 

In 2020, Gary Roth said that the college dream was over. Yet the socially manufactured college mania continues, flooding the internet with ads for college and college loans, as social realities point to a future with fewer good and meaningful jobs even for those with degrees. Higher education will continue to work for some, but should every consumer, especially among the struggling working class, believe the message is for them? 

Related links:

More than half of college grads are stuck in jobs that don't require degrees (msn.com)

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

Edtech Meltdown 

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

2U Declares Chapter 11 Bankruptcy. Will Anyone Else Name All The Elite Universities That Were Complicit?

College Mania!: An Open Letter to the NY Fed (2019)

"Let's all pretend we couldn't see it coming": The US Working-Class Depression (2020)

The College Dream is Over (Gary Roth, 2020)

HEI Investigation: Academic Partnerships

In 2022, Online Program Managers (OPMs) are being scrutinized like their predecessors, for-profit colleges, in the early 2000s.  2U, one of the leaders in the industry, has been particularly singled out as a predatory company, working with elite schools like the University of Southern California, and selling their overpriced master's degrees.  

Before that, Kaplan Higher Education and Kaplan Higher Education gained attention for selling off their for-profit schools but maintaining the management services for Purdue University Global and University of Arizona Global.  

In this media attention on OPMs, a few companies have been able to avoid much scrutiny, with Academic Partnerships flying below the national media radar for years.  

Academic Partnerships (AP) is a mature online program manager that claims to serve more than 50 universities, most regional state universities.  The Higher Education Inquirer could only find about half that number. AP also claims to "help universities grow"--without providing much evidence.  In some cases, these lesser brand schools have been facing decreasing enrollment and revenues-- and it's not apparent how much AP can help them in the long run.  

What we do know is that the OPM receives about half of all the revenues for their work, which includes cheaper privatized marketing, advertising--and recruitment services from enrollment specialists spread across the US. 

AP's sales pitch is that they can transform their partner universities and help provide reasonably priced degrees in lucrative career fields (such as RN to BSN programs), but is this happening with all the online degree programs offered? And would some consumers be better off choosing a local community college? 

AP's partner universities include: 

Arkansas State University
Avila University
Boise State University
Carleton University
Eastern Michigan University
Eastern Washington University
Emporia State University
Florida International University
Louisiana State University Shreveport
Norfolk State University
Northern Kentucky University

Pittsburg State University
Radford University
St. Cloud State University
Southern Illinois University
Southern Oregon University
Southeastern Oklahoma State University
Texas A&M (International University)
University of Illinois Springfield
University of Maine at Presque Isle
University of North Carolina Pembroke
University of Texas at Arlington
University of West Florida
William Paterson University
Youngstown State University

If you teach or study online at one of these AP university partners, what have you observed?  

• Do instructors maintain the rights to the content they have created?  
• What are the online classes like compared to face-to-face courses?  
• What are graduation rates for these online students compared to on campus students?
• How much debt do former online students have compared to on campus students?  
• What kind of jobs are former online students getting compared to on campus students? 
• Are former online students able to pay off these debts?  

 

Related link: "The Private Side of Public Universities: Third-party providers and platform capitalism"

Related link: HEI Investigation: EducationDynamics

Related link: 2U Virus Expands College Meltdown to Elite Universities

Related link: Purdue University and Its Subprime College Cousin Committing Fraud 

Related link: Online Program Manager for University of Arizona Global Campus Facing Financial Collapse 

 

 

Guild (Education) No Longer Glitters: Layoffs, Toxic Work Environment, Questionable Acquisition

Here's our latest analysis of Guild (formerly Guild Education) based on a limited amount of publicly available data. Guild is a third-party provider of adult education, connecting big corporations like Walmart, JP Morgan, Tesla, and Disney with online schools like Purdue University Global (Purdue University's robocollege) and e-Cornell (Cornell's online school). 

For years, Guild Education received a substantial amount of positive press, which put them on our radar in 2021. We and others in the education world were wary of all the hype. Forbes was a big contributor to Guild's rise, along with its supporters: Silicon Valley Bank, ASU+GSV, Steph Curry, Oprah,  Johny C. Taylor Jr., Michael Horn, and Kenneth Chenault. And Guild had political ties with Mae Podesta, a daughter of Democratic Party powerbroker John Podesta.

In 2023, Guild was again on the radar as the edtech meltdown was occurring and investor money was drying up, especially in Silicon Valley. In September of 2024, Disney cut back on its Guild-managed education program.

Since Guild is a private, for-profit company, this limits our ability to fully assess the company, including its value. It appears Guild has not received a capital infusion since the summer of 2022, and there is no indication that it has ever been profitable. Valuations.fyi reports that Guild's value has dropped from a peak of $4.4B in 2022 to $1.3B in 2024.

The last two years Guild has suffered significant layoffs, and its charismatic CEO Rachel Romer, who suffered a stroke, was replaced by a less popular Bijal Shah (who only has a 37 percent favorability rating on Glassdoor). The edtech company has gone through major transitions, including a rebranding, while downsizing its core business. In early 2024, Guild announced that it was offering AI training. More recently, it has acquired Nomadic Learning, a platform for educating corporate leadership.

Glassdoor reviews have provided more information that are summarized here:

1. Toxic Work Environment/Hostile leadership: The behavior of senior leadership, particularly the CMO, is described as hostile, manipulative, and discriminatory. 

Lack of empathy: A lack of empathy from leadership towards employees is a recurring theme.

Discrimination: Instances of discrimination, both overt and subtle, are alleged, especially against women and employees of color.
 

2. Unfair Treatment and Inequity/Favoritism: Friends of leadership seem to be favored, regardless of merit or performance.

Unequal treatment: Women and employees of color appear to be disproportionately affected by negative actions, such as layoffs and discrimination.

Limited opportunities for advancement: The focus on "allies" in ERG spaces may limit opportunities for marginalized employees.
 

3. Erosion of Employee Benefits/Reduced holiday time: The removal of holiday time off and restrictions on PTO use have negatively impacted employees' ability to balance work and personal life.

Decreased support for employees: The company's focus on reducing costs has led to a decline in benefits and support for employees.
 

4. Misalignment with Mission/Prioritizing profits over people: The company's actions seem to prioritize financial gain over its stated mission of unlocking opportunity.

Disregard for employee needs: The company's failure to address the needs of its employees, particularly women and caregivers, contradicts its mission.
 

5. Loss of Talent/High turnover: The toxic work environment and declining benefits are likely contributing to a high turnover rate among talented employees.

Loss of marketing talent: The company's reputation is suffering due to the loss of its best marketing talent.

These issues raise serious concerns about Guild Education's culture, leadership, and commitment to its employees and mission. Addressing these problems will be crucial for the company's long-term success.

Why Acquire Nomadic Learning?

There could be several reasons why a company with a toxic work environment and declining employee morale would continue to acquire other businesses:

Diversification: Acquisitions can be seen as a way to diversify the company's revenue streams and reduce its reliance on a single product or service.

Market expansion: Acquiring other companies can help a company expand into new markets or geographic regions.

Synergies: The acquisition of complementary businesses can create synergies that lead to cost savings or increased revenue.

Talent acquisition: Acquisitions can be a way to acquire talented employees or intellectual property.

Short-term financial gains: Acquisitions can sometimes provide short-term financial gains, such as increased revenue or stock price appreciation.

However, it's important to note that these reasons may not be sufficient to justify the acquisition of other businesses if the company's internal problems are not addressed. A toxic work environment and declining employee morale can negatively impact a company's ability to retain talent, attract customers, and innovate.

It's possible that the company's leadership believes that acquisitions can help to mask or distract from the underlying problems. However, this is a short-term solution that is unlikely to be sustainable in the long run.

To truly improve its situation, Guild Education will need to address the root causes of its problems, including the toxic work environment, declining employee morale, and misalignment with its mission.

University of Phoenix and the Ash Heap of Higher Ed History

 (Updated September 14, 2023)

The University of Phoenix (or at least its name) may soon enter the ash heap of US higher education history--and rise again as a state-run robocollege.  But it shouldn't--at least not yet. Once hailed as the leader in affordable adult education for workers entering middle management, it is a shell of its former self--in an economy less certain for workers and consumers. 

With the school's wreckage are approximately one million people buried alive in an estimated $14B-$35B in student loan debt.  

Pattern of Fraud

As of January 2023, more than 69,000 of these student loan debtors have filed Borrower Defense to Repayment fraud claims with the US Department of Education against the University of Phoenix (UoPX). Many more could file claims when they become aware of their rights to debt relief. In the partial FOIA response below, the US Department of Education reported that 69,180 Borrower Defense claims had been made against the school.

In a recent federal case, Sweet v Cardona, most if not all of the 19,860 "denied" cases were overturned in favor of the student loan debtors.  We estimate the smaller number of fraud claims alone to amount to hundreds of millions of dollars.  

Through a FOIA request, we also discovered 6,265 consumer complaints in the FTC database. In 2019, the FTC and the University of Phoenix settled a claim for $191M for deceptive employment claims.  Based on the consumer complaints, we have no reason to believe that Phoenix has changed its behavior as a bad actor. 

On May 3, 2023, six US Senators (Warren, Brown, Blumenthal, Durbin, Merkley, Hassan) called for the US Department of Education, Department of Veterans Affairs, and Department of Defense to investigate the University of Phoenix for launching a new program suggesting that it was a public university.  The letter stated that the school "has long preyed on veterans, low-income students, and students of color."

Wolves in Sheep's Clothing

University of Phoenix's owners could potentially be liable for refunding the US government for the fraud. But as a state-related organization, it may be more politically difficult to claw back funds, no matter how predatory the school is.  

Purdue University Global and University of Arizona Global set a precedence in state-related organizations acquiring subprime schools (Kaplan University and Ashford University) and rebranding them as something better. Whether they are better for consumers is questionable. Phoenix will have to cut costs, largely by reducing labor. Using Indian labor (like Purdue Global) and AI could be profitable strategies.  It's likely that this deal, even if profitable, will add fuel to the growing skepticism of higher education in the US. 

University of Phoenix's Finances

Apollo Global Management and Vistria Group currently own University of Phoenix but have been trying (unsuccessfully) to unload the subprime college for more than two years. Little is publicly known about the school's finances. What is known is that UoPX gets about $800M every year from the federal government, through federal student loans, Pell Grants, GI Bill funds, and DOD Tuition Assistance.

Despite this government funding, US Department of Education data show the school's equity value for the Arizona segment declined significantly, from $361M in FY 2018 to $187M in FY 2021. 

$347M of the University of Phoenix's $518M in assets are intangible assets. Intangible assets typically include intellectual property and brand reputation. The school has $348M in liabilities.  

The University of Phoenix has been reducing expenses by cutting instructional costs, from $70M in FY 2020 to $60M in FY 2021. UoPX spends about 8 percent of its revenues on instruction.

Marketing and advertising expenses are not available, but Phoenix has been visible on the Discovery Channel's Shark Week, CBS' Big Brother, and other television events. ISpot.tv reports that University of Phoenix spends millions of dollars each year on television ads.  On one ad alone, the ad spend from February 2023 to July 2023 was an estimated $3.5M. 

Attempts to Sell UoPX

There have been two known potential buyers for the University of Phoenix: the University of Arkansas System and the University of Idaho. In both cases, the owners required the potential buyers to keep the deal secret until the sale was imminent.  

Fear of the impending higher education enrollment cliff appears to be an important pitch to potential buyers. 

Arkansas, the first target, was in the process of making the deal, and it might have gone through if nit for the voice of one whistleblower and one outstanding investigative reporter, Debra Hale Shelton of the Arkansas Times.

In the case of Idaho, news of the potential deal was publicly noted just one day before the preliminary agreement was made with the Idaho Board of Education. Two other secret meetings were held before that.  

A number of journalists including Kevin Richert (Idaho EdNews), Laura Guido (The Idaho Press), Troy Oppie (Boise State Public Radio), and Noble Brigham (Idaho Statesman) have exposed some of the problems and potential problems with the deal.  In June, Idaho legislators began questioning the acquisition.  

More recently, the opinion editor at the Idaho Statesman argued that the deal may actually be worthwhile. 

Particulars about the finances are sketchy at best and misleading at worst.  The University of Phoenix is said to include $200M in cash in the deal, but they have not said how much of that sum is required by law as "restricted cash"--money the school needs if the Department of Education needs to claw back funds.  Phoenix also claims to be highly profitable, but without showing any evidence.  

What is known about the deal is that the University of Idaho will have to borrow $685M and put its (bond) credit rating at risk. The school has not identified important information how the bonds would be sold (underwriters, bond raters, date to maturity, interest rate). 

The University of Idaho has created an FAQ to answer questions about the sale, but HEI has identified a number of misleading statements about University of Phoenix's present finances (failure to report the school's equity), potential liability (cost of tens of thousands of Borrower Defense claims), and leadership (lack of background information about Chris Lynne, the President of the University of Phoenix).  These deficiencies have been reported to the University of Idaho and to the Representative Horman. 

On June 20, Idaho Attorney General Raul Labrador filed a lawsuit to halt, or at least slow down the deal. 

The University of Idaho submitted a Pre-Acquisition Review from the US Department of Education, and it may take up to three months before the application is completed. 

As of September 2023, the deal is far from done.  Since this article was first published there have been a number of developments:

On September 11,  US Senators Elizabeth Warren, Dick Durbin, and Richard Blumenthal called on University of Idaho President Green to abandon the sale.  The Senators also asked Green if he had a plan to pay for the Borrower Defense claims, noting that University of Arizona may be on the hook for thousands of claims against Ashford University (aka University of Arizona Global campus).

In November, the Joint Finance-Appropriations Committee of the Idaho Legislature is expected to discuss the issue again.

*The Higher Education Inquirer has made a FOIA request for more up-to-date numbers from the US Department of Education. We have also filed FOIA requests with the FTC. 

Related link: 

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

The Growth of "RoboColleges" and "Robostudents"

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

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

Visual Documentation of the College Meltdown Needed

 

                                       

The Higher Education Inquirer is looking for images to document the College Meltdown which began in 2010.  

The US Department of Higher Education posts hundreds of campus closings each year.  Images of these closed schools can be used to document an important part of US higher education history.

Closed campuses vary in size, from high school classrooms, hotel conference rooms, and store fronts, to satellite and branch campuses, to small private colleges, and larger career colleges. Some schools have been repurposed, others demolished, and others remain in disrepair--as ruins--and relics of a more humane (or at least more human) past. 

                        

Over the last two decades, the University of Phoenix alone closed more than 500 campuses, many which were conveniently located near US interstate highways.  In 2025, UoPX will have just one campus, located in Phoenix, Arizona. 

In 2015, Corinthian Colleges and Le Cordon Bleu went out of business.  A year later ITT Tech closed all of its doors. The Art Institutes also closed dozens of campuses. In 2018, Virginia College campuses closed, and Kaplan Higher Education sold its remaining properties to Purdue University. Today, only a few Purdue University Global campuses remain.  DeVry University has closed many locations, but several ghost campuses, those with few if any students, remain. Ashford University became a fully online University of Arizona Global. 

In just a few decades, under the guise of creative disruption, brick and mortar colleges with skilled professors and staff have been replaced by large online robocolleges that hire few if any instructors and offer fewer student services, such as mental health counseling.  And community branch campuses have been replaced by online program managers (OPMs) that advertise, recruit, and even write curriculum for regional public universities and elite private colleges, often without the knowledge of the students/consumers.  

The US Department of Education's PEPS Closed School Monthly Report has been largely ignored by the media.  But as a historical document, the list is telling.  Since 1986, approximately 18,000 campus closings have been reported. The peak year for closings was 2016, when more than 1100 schools were reported as closed.  

 

 [Bay State College in Boston, Massachusetts, which has partially closed. BSC is owned by Ambow Education., which is in deep financial trouble]

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

Abandoned Long Island College Sits in Disrepair, And Community Says It's A Danger (Greg Cergol, NBC New York)

The Growth of "RoboColleges" and "Robostudents" 

 PEPS Closed School Monthly Report

 

The Growth of "RoboColleges" and "Robostudents"

In a previous Higher Education Inquirer article, I presented frightening full-time faculty numbers at some large online universities which I call "robocolleges."  Full-time faculty at these robocolleges, in fact, are nearly nonexistent. Bear in mind that all of them are regionally accredited, the highest level of institutional accreditation, and the list includes well-known public university systems as well as for-profit ones.  

Robocolleges have de-skilled instruction by paying teams of workers, some qualified and some not, to write content, while computer programs perform instructional and management tasks. Learning management systems with automated instruction programs are known by different names and their mechanisms are proprietary.  As professor jobs are deskilled, tasks can be farmed out at reduced costs.  

Besides the human content creators who may be given instructional titles, other staff members at robocolleges are paid to communicate with students regarding their progress. The assumption is that managing work this way significantly reduces costs, and it does, at least in the short and medium terms.  However, instructional costs are frequently replaced by marketing and advertising expenses to pitch the schools to prospective students and their families.  Companies like EducationDynamics and Guild Education have filled the niche of promoting robocolleges to workers at a reduced cost but their overall impact is minimal.  

Meanwhile,  companies like Chegg profit from this form of learning, helping students game the system in greater numbers, in essence creating robostudents.  

The business model in higher education for reducing labor power and faculty costs is not reserved to for-profit colleges.  Community colleges also rely on a small number of full-time faculty and armies of low-wage contingent labor.  

In some cases, colleges and universities, including many brand name schools, utilize outside companies, online program managers (OPMs), to run their online programs, with OPMs like 2U taking up as much as 60 percent of the revenues.  OPMs can perform a variety of jobs, but are best known for their work in enrollment and retention.  Prospective students may believe they are talking to representatives of a particular university when in fact they are talking to someone from an outside source.  Noodle has disrupted the OPM model by selling their services ala carte, but only time will tell whether it has an impact, or whether schools will merely find less costly outsourced servicers.  

Outsourcing higher education has been a reality in US higher education for decades. And automation is also part of education, as it should, when it performs menial tasks, such as taking roll and doing preliminary work to determine student cheating.  It's likely that more schools will become more robotic in nature to reduce organizational expenses.  But what are the long-term consequences with long-term student outcomes, when automation is used to perform higher level tasks, and when outsourced individuals act in the name of brand name colleges?  

To get a small glimpse of this robocollege phenomenon, these schools cumulatively have about 3000 full-time instructors for more than a half-million students.  

American Intercontinental University: 51 full-time instructors for about 8,700 students.

American Public University System has 345 F/T instructors for more than 50,000 students. 

Aspen University has 34 F/T instructors for about 9,500 students.  

Capella University: 216 F/T for about 38,000 students.

Colorado State University Global: 34 F/T instructors for 12,000 students.

Colorado Technical University: 59 F/T instructors for 26,000 students.
Devry University online: 53 F/T instructors for about 17,000 students.

Grand Canyon University has 461 F/T instructors for 103,000 students.*  
Liberty University: 1072 F/T for more than 85,000 students.*
Purdue University Global: 346 F/T instructors for 38,000 students.

South University: 0 F/T instructors for more than 6000 students.

Southern New Hampshire University: 164 F/T for 104,000 students.

University of Arizona Global Campus: 194 F/T instructors for about 35,000 students.
University of Maryland Global: 193 F/T instructors for 60,000 students.

University of Phoenix: 127 F/T instructors for 96,000 students.

Walden University: 206 F/T for more than 50,000 students.

*Most of these full-time instructors are faculty at the physical campuses.  

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

It's commonly known that US student loan debt is now about $1.7 trillion and that more than 44 million Americans are laden with this debt.  It's also known that student debt is not a problem for everyone who goes to college or everyone who takes out loans.  

Student loan debt is not equally distributed: while the children of elites can go to school without incurring debt and find meaningful work after graduation, working families are burdened because so many cannot find decent, gainful employment after dropping out or even after graduating from college--work that would enable them to repay their loans.

Student loan debt is also not distributed equally among the schools that generate the debt.  Working class people who have the opportunity to get to elite schools may incur less debt there than by attending state universities--but others who attend these elite schools, especially online at the graduate level, may not be so lucky.  

Those who attend subprime colleges, and who take the wrong majors, may incur debt they can never repay.  

And the multitude of debtors in between, the many millions going to less than elite schools, are having to restrict their dreams as they pay back their loans.  

The US Department of Education and other organizations publish important information on student loan debt.  The College Scorecard, for example, gives consumers information on the debt they can expect, gainful employment after attending, and the numbers on student loan repayment.   The Washington Monthly also ranks colleges, and important numbers, like social mobility rankings and amount of principal paid are in the rankings. The Century Foundation and The Institute for College Access and Success (TICAS) also contribute to our knowledge. 

But there are glaring gaps in our current knowledge about student loan debt, knowledge necessary for establishing greater transparency and accountability.  

One of the most important knowledge gaps is in learning about student debt by institution.  In 2016, Adam Looney and Constantine Yannelis presented a conference paper on student loan debt that listed student loan debt by institution.  

Table 5 in this report showed an important aspect of the debt, of accumulated debt, the percent of principal still owed on debt, and the 5-year student loan default rate.  University of Phoenix attendees had an estimated $35 billion in accumulated debt, outpacing Walden University.  And Argosy, Strayer, Capella, DeVry, American Intercontinental, and Nova Southeastern attendees owed more money than the principal of their loans, 5 years after the loans were taken out.  Kaplan University (know known as Purdue University Global) had a 5-year student loan default rate of 53 percent, and Ashford University (know known as University of Arizona, Global Campus) and Colorado Technical Institute had 5-year student loan default rates of 47 percent.  These subprime colleges, in effect, were draining the student loan portfolio while providing a service that hurt many of their customers.  

Even some big brand name schools like NYU, University of Southern California, Penn State, Arizona State University, Ohio State, University of Minnesota, Michigan State, Rutgers, Temple, UCLA, and Indiana University had students with enormous amounts of debt that they were having to pay off.  

The data in this study were from 2009 and 2014.  What has happened since then at the institutional level?  What schools today are draining the student loan portfolio and financially crippling those who have attended?  Consumers and tax payers should be allowed to know.  

Related link: The College Dream is Over (Gary Roth)

Related Link: USC Pushed a $115,000 Online Degree. Graduates Got Low Salaries, Huge Debt (Wall Street Journal-Lisa Bannon and Andrea Fuller) 

Related link: A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising loan default ( Looney and Yannelis, 2016)

Related link: College Meltdown Expands to Elite Universities

Related link: What happens when Big 10 grads think "college is bullsh*t"?

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

The failure of University of Phoenix (UoPX) is more than a dark moment in higher education history.  It should act as a lesson learned in the higher ed business. Executives at 2U, Guild Education, Coursera, Liberty University, Purdue University Global, University of Arizona Global, Chegg, Academic Partnerships, Pearson PLC, Navient, Maximus and other for-profit and non-profit entities must take heed of the mistakes and the hubris of Phoenix, the wisdom of its cofounder John D. Murphy, and the silencing of important worker voices.  

For several decades of the 20th century, hundreds of University of Phoenix campuses dotted the American landscape, conveniently located in cities and growing suburbs, off major highways. Founded in 1973, America's largest university became a for-profit darling of Wall Street in the 1980s and 1990s, and the provider of career education for mid-level managers in corporate America and public service. A Phoenix degree was the ticket to promotions and salary increases.  

During its zenith, the school was backed by dozens of lawyers and DC lobbyists and a number of politicians and celebrities--including Nancy Pelosi, John McCain, Shaquille O'Neil, Al Sharpton, and Suze Orman. UoPX bought the naming rights to the Arizona Cardinals' pro football stadium in 2006. And in 2010, enrollment at the University of Phoenix stood at nearly a half million students.  The school even had an enormous presence at US military installations across the globe. University of Phoenix's presence was everywhere.* 

Phoenix's stock rose for many reasons. It was a leader in educational innovation. It was convenient and affordable for upwardly social mobile workers.  Its profits were large, and its labor costs were relatively low because UoPX hired business leaders and experts in the field, not tenured scholars, to teach part-time.  

But something went horribly wrong along the way.

In the 2010s, University faced government and media scrutiny for its questionable business practices, its declining graduation rates, and its part in creating billions in student loan debt. And when workers voiced their concerns, they were silenced in a variety of ways, from threats and intimidation to firings. 

This enrollment collapse has now lasted a dozen years and counting.  

Today, as a miniscule portion of Apollo Global Management's portfolio, UoPX's enrollment numbers are less than 100,000--and few of its physical campuses remain open during the Covid pandemic. It's not known how many campuses, if any, are financially viable.  

University of Phoenix enrollment, 2009-2016 (Source: US Department of Education) 

There are a several reasons why University of Phoenix is just a shadow of what it was. Businesspeople and lobbyists blame government regulation and oversight; others blame the relentless pursuit of quarterly profits and corrupt Apollo Group CEOs, including Todd Nelson.

Having talked to co-founder John D. Murphy and read his book Mission Forsaken, what I found out was that University of Phoenix began failing three decades earlier, during the Ronald Reagan era, when US companies chose to invest less in their workforces.  When this post-Fordist shift happened, US companies reduced benefits for workers, and divested in the education and training of mid-level executives.

In order to keep the company growing in the face of this retrenchment, UoPX shifted its mission, from educating America's upwardly mobile workers to enrolling anyone--at any cost. The company could only decline as it preyed upon consumers and silenced its workers.   After 2010, enrollment counselors were signing up people who were woefully unprepared academically and financially for college work.  

By 2014, about 1 million University of Phoenix's alumni were saddled with more than $35 billion in student loan debt.     

US Student Loan Debt by Institution (Source: Brookings, Looney and Yannelis, 2015)

In 2017, Apollo Group sold the company to Apollo Global Management, an investment behemoth, along with Vistria Group and the Najafi Companies.   As part of its holdings, the school was a tiny portion of its portfolio. Barak Obama's close friend, Anthony Miller, was paid to be Board president.  

Among national universities, UoPX is now ranked near the bottom in social mobility according to the Washington Monthly.

In January 2022, as a sign of its continued unraveling, Apollo Education appointed George Burnett, a former executive of three failed or predatory companies, including Alta College and Academic Partnerships, to be Phoenix's newest President. 

UoPX's problems are a symptom of an economic system that despite the hype cares little about workers: a system that today looks at labor costs as something to be reduced--rather than an investment. With few exceptions, America's most powerful corporations: Amazon, Walmart, Target, Yum Brands, McDonalds--rely on low-wage labor and automation to make a huge profit. Companies in medicine, finance, and tech have smaller labor numbers--and while work may be lucrative at the moment, it's becoming more precarious.

*In the early 2010s, Apollo Group, Phoenix's former parent company, spent between $376 million and $655 million a year on ads and marketing.  

Related link: Friends In High Places: Who Endorses America’s Troubled For-Profit Colleges? (David Halperin) 

Related link: New University of Phoenix Head Ran College That Closed After Fraud Suit (David Halperin, Republic Report) 

Related link: Bid to buy for-profit college by former Obama insiders raises questions (Michael Stratford and Kimberly Hefling, Politico).

Related link: Massive College Scams Taxpayers Out of Student Loans with Fake Enrollment Paperwork, Whistleblowers Say (Luke Rosiak,The Daily Caller)

Related link: The Slow-Motion Collapse of America’s Largest University

Related link: Can Apollo Global Management stem the bleeding at University of Phoenix?

Related link: University of Phoenix Collapse Kept from Public Scrutiny, As Ads Continue

Related link: Higher Learning Commission: Accreditation Is No Sign of Quality

Related link: Robocolleges and Robostudents

Related link: Guild Education 

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. 

Need Student Debtors to Provide Information about Low-Financial-Value Postsecondary Programs (Updated February 15, 2023)

 

[Editor's Note: The public comment period ended February 10, 2023.]  

The US Department of Education is accepting public comments as a Request for Information (RFI) about "Public Transparency for Low-Financial-Value Postsecondary Programs."  The announcement is available at the US Federal Register.  

The URL to make these comments is at 

https://www.regulations.gov/document/ED-2022-OUS-0140-0001

As with most US government rules and policies, industry insiders have great influence in these decisions--and concerned citizens are often shut out of the process. When consumers do have a chance to speak, they may not even know of those opportunities.  That's why the Higher Education Inquirer is asking student loan debtors to contribute to this RFI while they can.   

Tell DC policymakers and technocrats about your unique struggles (and your family's struggles) tied to student debt--and what could be done to better inform consumers like you. 

There you can find public comments that have already been made.  As of February 15, only 129 comments were posted. 

According to the announcement: 

"a misalignment of prices charged to financial benefits received may cause particularly acute harm for student loan borrowers who may struggle to repay their debts after discovering too late that their postsecondary programs did not adequately prepare them for the workforce. Taxpayers also shoulder the costs when a substantial number and share of borrowers are unable to successfully repay their loans. The number of borrowers facing challenges related to the repayment of their student loans is significant."  

The Request for Information continues...

"Programs that result in students taking on excessive amounts of debt can make it challenging for students to reach significant life milestones like purchasing a home, starting a family, or saving enough for retirement, ultimately undermining their ability to climb the economic mobility ladder. Especially for borrowers who attended graduate programs, debt-to-income ratios often rise well above sustainable levels. IDR (Income-Driven Repayment) plans also cannot fully protect borrowers from the consequences of low financial-value programs. For instance, IDR plans cannot give students back the time they invested in such programs. For many programs, the cost of students' time may be at least as significant as direct program costs such as tuition, fees, and supplies. Loans will also still show up on borrowers' credit reports, including any periods of delinquency or default prior to enrollment in IDR."

"The Biden-Harris Administration is committed to improving accountability for institutions of higher education. One component of that work is to increase transparency and public accountability by drawing attention to the postsecondary programs that are most likely to leave students with unaffordable loans and provide the lowest financial returns for students and taxpayers."

CECU, an group representing for-profit colleges, has an organized effort to protect its interests. 
 

Meanwhile, Robert Kelchen has provided an EXCEL spreadsheet that provides many answers. The dataset covers 45,971 programs at 5,033 institutions with data on both student debt and earnings for those same cohorts. We found more than 12,200 programs where debt exceeds income. And more than 7200 programs resulted in median incomes of less than $25,000 a year with debt greater than $10,000.

While some of these high-debt programs in medicine and law may eventually be profitable, many more paint a picture of struggle with a lifetime of debt peonage. Cosmetology schools had a large number of low-income programs.  But the fine arts, humanities, social sciences, and education also produced low-value programs in terms of debt to income ratio. 

Some of subprime schools HEI has been investigating (Purdue University Global, University of Arizona Global, The Art Institutes) had a number of low-value majors. But elite and brand name schools like Duke, Drexel, Emory, Syracuse, Baylor, DePaul, New School, and University of Rochester even have high debt and low-income programs. 

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

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

Related link: The College Dream is Over (Gary Roth)

Related link: Even Elite Schools Have Subprime Majors (Keil Dumsch and Dahn Shaulis)

US Departments of Education, Defense, and Veterans Affairs Shirk Responsibilities to Servicemembers, Veterans, and Their Families

As a military veteran working to expose some of the most predatory practices by subprime colleges, the idea that anyone at the US Department of Education, US Department of Defense (DOD) or Department of Veterans Affairs (VA) would say "Thank you for your service" rings hollow, especially on the 4th of July.

The US  government has systematically shirked its oversight of subprime colleges that target servicemembers, veterans, and their families, especially during the Trump Administration.

I have to give some credit to President Obama for trying to do something against these schools, with Executive Order 13607, but much of that work has been undermined by DOD and VA officials.

• Instead of exposing poor performing schools that get DOD Tuition Assistance, officials in 2018 decided that protecting these schools from a "witch hunt" was more important.
• In 2019, DOD continued to protect even the worst 50-100 subprime schools from public scrutiny.
• VA Office of Inspector General reported that $474 million had been inappropriately allocated to subprime schools, but I have seen no attempt to claw back the money for US taxpayers.
• Purdue University Global, one of the worst schools for misleading consumers, has faced no consequences for their unethical behavior as they targeted servicemembers in the Army, Navy, Air Force, and Marine Times, as well as social media.

I have filed a FOIA and a complaint about Waste, Fraud, and Abuse to DOD, but have been told not to hold my breath. And I have also filed a complaint with the VA, but have even less faith that they will do their job.

Related article: 8 tips to help vets pick the right college (Military Times)

"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis)

In 2013, Futurist Bryan Alexander aptly talked about peak college enrollment in the United States.  And over the last decade or so, higher education enrollment has declined in almost every state. Now at least 18 US states have experienced enrollment drops greater than 20 percent--and five more are close to that threshold.  

People can watch the College Meltdown in real time at thelayoff.com. 

Enrollment declines are the result of several interrelated economic and demographic shifts.  Reduced populations of college age people, economic distress, growing inequality, and migration are some of the interacting factors. College is expensive and time consuming for working folks.  

While programs like College Promise can help with shoring up community college enrollment, they cannot make up for deep social and economic problems. Online learning has made school more convenient, but the quality and value of several of America's robocolleges (colleges largely free of full-time instructors) is often substandard.  

For many working-class families, college is no longer perceived as the golden ticket to upward social mobility. And a growing educated underclass, based on their own personal experiences with underemployment and student loan debt, are skeptical about the value of higher education for their children--if they choose to have children. Many are not.  

Without significant change, we estimate that the 2026-27 enrollment cliff is likely to put almost every US state above a 25 percent decline over the last 15 years.  With another economic meltdown, the numbers could get worse without major reform--smart social reform--not reform that lines the pockets of the rich and powerful.  

Though consumer demand for college has declined significantly, college costs have not.  Increasing federal funding, though, especially to subprime robocolleges like Purdue University Global, Liberty University, University of Phoenix, and University of Arizona Global Campus may not lead to lower college prices, better quality curriculum, or better jobs at the end of the pipeline.   

*major colleges' data missing from the chart

(Source: National Student Clearinghouse) 

Related link: Observations of the College Meltdown in Real Time

Related link: Alaska is Leading the College Meltdown. Who's Next?

Related link: Enrollment declines, campus closings, economic losses and the hollowing out of America

Related link: Community Colleges at the Heart of College Meltdown

Related link: "Let's all pretend we couldn't see it coming": The US working class depression 

Seeking Whistleblowers in Higher Education

The Higher Education Inquirer is seeking whistleblowers who can tell us what is happening in higher education as the Trump Administration takes control over the federal government. The information needs to be reliable and credible. Leads are fine, but verifiable documents are better. 

We are particularly interested in obtaining information related to the US Department of Education, Department of Homeland Security,  Department of Veterans Affairs, Department of Defense, Department of Labor, the Federal Trade Commission, and other agencies related to higher education and employment. 

We are also interested in those involved in higher education administration and finance, particularly at elite universities and state flagship universities. With a few exceptions, we expect university presidents at elite universities to stay quiet, clamp down further on dissent and fall in line with any new policies, as the threat to tax them at higher rates becomes a concern. 

In the past we have relied heavily on Freedom of Information Act requests, which often take months, and multiple efforts, to obtain important data. Sometimes the information is delayed for years or never comes. And right now, we can't afford to wait.  

Since 2016, HEI has recruited a number of courageous people for inside information about for-profit colleges.  This has included informants from the University of Phoenix, Ashford University (aka University of Arizona Global), and Kaplan University (aka Purdue University Global) and the lead generators they schools have hired. 

We have also communicated with people associated with online program managers, such as 2U and Academic Partnerships.  

All of this information has been helpful in exposing the back rooms of the higher education business. 

Now, more than ever, we need information that folks won't find anytime soon in other news outlets.  News that workers, consumers, and their families can use to make better decisions about their life choices. 

IPEDS Trend Generator illustrates lower enrollment, less revenues, fewer jobs at for-profit colleges

The newest US Department of Education IPEDS data show that enrollment, revenues, and jobs have decreased dramatically in the for-profit college sector. 

Enrollment at for-profit colleges dropped from a peak of 2.4 million in Fall 2010 to 1.3 million in Fall 2017.  That's an enrollment drop of 1.1 million.  

This, in turn, has led to less revenue and fewer workers. 

Revenues at for-profit colleges peaked in 2011 at $29.6B and dropped to $19.4B in Fall 2017. That's a drop of more than $10B a year from its peak. 

For-profit college employees peaked at 295,887 in 2012 and the number dropped to 176,441 by Fall 2017. That's a loss of more than 120,000 jobs.

Decline in enrollment, revenues, and employees (2010-present)

Fall/Year    Enrollment    Revenues              Employees
2010           2,430,657      29,603,059,000     295,476
2011           2,368,440      33,889,758,000     288,882
2012           2,174,457      32,196111,000      295,887
2013           2,000,883      29,643,714,000     258,098
2014           1,883,199      27,310,167,000     241,134
2015           1,629,393      24,007,022,000     214,656
2016           1,437,452      20,804,128,000     191,083

2017           1,345,633      19,446,382,000     176,441 

You can create graphs and tables yourself using the updated data at the IPEDS Trend Generator.

Current conditions in the for-profit college industry may actually be worse, judging by the Fall 2018 assessment by National Student Clearinghouse, which had reported an additional 15 percent decline.  However, NSC's original press release has been removed.  

The data also do not consider more recent losses, such as the collapse of Education Corporation of America (which includes Brightwood College and Virginia College) or Dream Center Education Holdings (which includes Argosy, Art Institutes, and South University. 

One confounding issue is that for-profit colleges Grand Canyon University and Purdue University Global (formerly Kaplan) have moved to the non-profit side.  Ashford University is also working on having its tax status changed from for-profit to non-profit.

Related link: Observations of the College Meltdown in Real Time

Related link: The Slow-Motion Collapse of America’s Largest University