Monday, November 15, 2021

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"?

Monday, September 6, 2021

The Tragedy of Human Capital Theory in Higher Education (Glen McGhee*)

Have you ever wondered why US student loan debt has soared past all other debt but mortgages, to more than $1.7 trillion?  Did you know $500 billion of that outstanding student loan debt will never be paid back to the US Treasury and that this huge black-hole is sucking the life from Millennials in debt peonage?  

And did you know all of this mess can be attributed directly to a set of misguided economic nostrums that go by the name of "Human Capital Theory"?

This is the tragedy of deeply flawed Human Capital Theory.  Having hijacked notable successes with professionalization (remember: not everyone can be a "professional"), human capital theorists in the early 1960s worked to spread and legitimize the idea that "learning means earning."

The sinister-side is that for the lucky ones, the motto proved true.  But today's grievously high debt burdens and the growing number of precarious jobs for those not so lucky contradicts the idea that "learning means earning."  

The seeds of Human Capital Theory have been growing for more than century, first through Madison Avenue marketing and then University of Chicago myth making. 

Here's an ad from September 1920 issue of Popular Science Monthly that makes the point: the possession of knowledge means higher wages. In this case, the 1920's proprietary “correspondence” schools and colleges relied heavily on this basic message to sell themselves -- what was later to become the central tenet of Human Capital Theory.

The naivete of these one-hundred year old advertisements is obvious now. We know better; whether it's through our own bitter experience, or the experience of those around us -- life is not so simple. Such simplicity has been debunked, and the idea itself that knowledge always translates into higher earnings has lost its appeal.

But at the time, these advertisements picked up on the massive surge in economic changes -- the new jobs, new occupations, new companies -- sweeping the county. Commerce and business life expanded and was transformed in numerous ways. Using 1880-1930 census data, Cristina Groeger shows how upper-class elites benefited far more than, say, those suffering from racial discrimination that barred them completely from higher-wage employment.

Sadly, Human Capital Theory does not take any of this into account. Racial and gender-based discrimination through our social institutions is, unfortunately, completely missing from Human Capital Theory. Learning does not equal earning when you lack access to job opportunities due to discrimination, or when you were born to a certain set of parents at a certain place, at a particular point in time.

For those lucky enough to ride the wave of growing prosperity, the slogan was true. And that's what has been driving support for Human Capital Theory -- it's just a glimpse in a 100 year old rear-view mirror. Public policy at the federal level, state level -- and even local support of education -- has been premised on the myth that financial support of education "equals earnings" -- for everyone. This is, of course, not true for those faced with wage stagnation, high unemployment and under-employment, automation, out-sourcing of good jobs, and skill erosion -- all these factors come into play and complicate the picture.

Worse yet is the global reach of these misguided directives to developing nations to spend freely on education.

In 1960, Theodore Schultz highlighted the importance of human capital for economic development among poor nations in his presidential address to the American Economic Association. “Human capital investing” soon became a priority among economic development specialists and policy makers through the World Bank and the efforts of the Chicago School. "Learning means earning" became World Bank gospel, linking GDP and economic growth with a nation's investment in higher education. The Chicago School apparently falsified the direction of causality between higher education and economic growth, resulting in additional tragical consequences on a global scale.

Not all economists, however, are so deeply committed to Human Capital Theory.

In fact, the number of dissenters is on the rise, and include Phillip Brown, Hugh Lauder and Sin Yi Cheung, the authors of The Death of Human Capital?

University of Oxford economist Kate Raworth has developed "doughnut economics" as an alternative approach, even going so far as to encourage "guerrilla economics" and declaring "it's time to vandalize the economic textbooks"!

David Blanchflower, former Bank of England governor and Dartmouth economics professor, is another highly vocal critic of human capital theory. Cristina Groeger's History of Education in Boston 1880-1930: The Education Trap is another critique that runs the length of an entire book.

Gradually, the human capital theorists that were so popular in the 1960s and 1970s are being replaced by a new cohort that isn't interested in supporting outdated dogma.

But tragically, the damage has been done, and economists need to be held accountable. They can start by joining those that are denouncing Human Capital Theory.

*Glen McGhee is the Director of the Florida Higher Education Accountability Project (FHEAP)

Wednesday, July 21, 2021

SLABS: The Soylent Green of US Higher Education

Michael Bright of the Structured Finance Association defends the role of NRSRO's at the House Financial Services subcommittee on NRSROs, July 21, 2021

Bill Harrington of the Croatan Institute has been sounding the alarm bells. Mr. Harrington is telling everyone that he can, that the market for privately securitized student loans is corrupt, and that oversight of the securities and their related derivatives has been almost nonexistent.

SLABS, Student Loan Asset-Backed Securities, are private and federally insured student loans that are bundled, rated, and sold in tranches to institutional investors as bonds. In other words, the private debt of student debtors and their families is turned into investments that are considered low risk, but in some cases high yield. The most lucrative investments are the most toxic loans. 

This cache, a mix of old FFELP government backed loans (the program ended in 2010) and private sector loans may be valued at about $245 billion but is referenced in untold billions more of complex financing instruments such as structured investment vehicles, stocks and unsecured corporate debt and repurchase facilities.  About 11 million people still owe money from the FFEL program. 

SLABS are rated from AAA to B (junk) but all are marketed as safe and the demand is greater than the supply.  No one outside of the industry knows who actually owns the financial instruments, but it's assumed they are almost always large institutional investors such as banks, state and municipal funds, and retirement funds. 

Since at least 2015, SLAB sellers have extended the maturity dates of some SLABS by decades to avoid lowering their ratings.  Issuers are known to game the system by shopping around for better credit ratings.  

In May 2020, Morningstar accepted a $3.5 million fine for failing to separate its credit ratings and analysis operations from its sales and marketing efforts.  But they denied any wrongdoing.

Who oversees the SLAB industry?  Three raters:  Moody's, Standard & Poor's, and Fitch Ratings.  These companies are paid to rate the SLABS, and are also tasked for government oversight as Nationally Recognized Statistical Ratings Organizations (NRSRO's).  The credit rating agencies not only rate SLABS, they are paid to rate them by the loan issuers, like Navient and Nelnet, causing a potential conflict of interest.  

How much of a problem are SLABS as an investment?  What's the real risk?  Chances are that they are a much greater risk than they appear, and that's how it's framed in the SMU Law Journal article by Samantha Bailey and Chris Ryan titled "The Next "Big Short": COVID-19, Student Loan Discharge in Bankruptcy, and the SLABS Market." 

Metaphorically, SLABS are like Soylent Green, the subject of the dystopian movie that came out in 1973 and portrayed a chaotic New York City in 2022.  It's not until the end of the film that audience is told that the food that people were fighting for, Soylent Green, was actually people, processed for consumption.  

In 2021, SLABS are human lives, in the form of crippling debt, packaged for consumption: consumed by a range of big investors including big banks and pension funds.  

"It is up to each and every one of us, to decide where we wish to direct our focus. Is it fear, or forgiveness? Suffering or thriving? When we accept the principles of quantum physics, we understand that we are all entangled as one singular organism," said Allison Pyburn, student loan expert and author of the upcoming book, "The Great Unwind."

Friday, July 9, 2021

Academic Capitalism and the next phase of the College Meltdown (updated January 26, 2022)

It appears we have entered a new phase of Academic Capitalism and the College Meltdown. The previous phase involved College Mania! and the growth of the "educated underclass" (including gig workers, adjuncts and postdocs), Wall Street over-speculation, the divestment of corporations from employee benefits, and the rise and fall of for-profit colleges: Corinthian Colleges, ITT Tech, Education Management Corporation, Apollo Group, Education Corporation of America, and Laureate Education.  

Enrollment at proprietary schools is down about 40 percent from its peak in 2010 and higher education enrollment has dropped every year for the last decade.  In absolute numbers, community colleges have taken the largest hit.  Regional public universities have also experienced large enrollment declines.

At other schools, student aid has shifted from "needs based" to "merit based" making college choice for low- and moderate income families an even riskier choice

Student loan debt has crippled millions of working families, but neoliberal experts at Goldman Sachs and the Federal Reserve do not see a significant problem. 

According to the Federal Reserve, the student debt problem is ameliorated by the decline in births to people of lower socio-economic status.  The FED has also consistently reported that the debt is not a huge drag on the economy (less than 0.05 percent per year). Those developments, along with an anemic but growing student debt movement, have meant that the chance for progressive and meaningful change is limited under the Biden administration, but possible in the long run.  

This new phase of the College Meltdown has strong roots in the 1980s and involves the continued growth of the educated underclass (including elite overproduction in higher education) and more bulls*t jobs, the privatization of public higher education, the proliferation and consolidation of online program managers (OPMs) working for name brand and lesser known schools, non-profit subprime colleges, robocolleges, continued grade inflation, and the fall of the US federal student loan program. In 2020 and 2021, higher education also received three massive federal bailouts.  

Larger developments include the resurgence of authoritarianism, the hollowing out of America, and the global climate change crisis.  Despite these glaring existential problems, a looming college enrollment cliff in 2026, and growing dismay by working families, irrational exuberance and false optimism continues among most college business officers and middle-class consumers.  

Will austerity and excesses in the system lead to even more dramatic failures? Will the states and federal government ask for more transparency and accountability of the government funds that keep the system afloat?

What should we be observing in this new phase:  

1. The growth (and power) of the "educated underclass"

2. The effects of student loan debt on working families and social institutions (including religion and the economy) 

3. The state of the student loan forgiveness movement and popular opinion about student loan forgiveness

4. The health of the US Department of Education's Student Loan Portfolio

5. The growth of Online Program Managers

6. The degree that public universities are serving their citizens

7. The amount of money spent on marketing and advertising in higher education

8. Analyses of the FED, big banks, and rating agencies about the K-12 pipeline, higher education, student loan debt, and the growth of the educated underclass 

9. Local, state, and federal responses to "savage inequalities" in the K-12 pipeline, student loan debt, and the growth of the "educated underclass"

10. The rise of authoritarianism/neofascism in US education and the US as a whole  (e.g. mass surveillance, anti-intellectualism, hate crimes)

11. In deference to Bryan Alexander and his upcoming book "Universities on Fire" I must include global climate change as a phenomenon that must be observed and dealt with.  Failure to address this existential problem makes the other issues irrelevant.  


This article was updated November 11, 2021 to include a link to elite overproduction in higher education and on January 26, 2022 to include a list of recent references.  

Thursday, July 1, 2021

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.  

Wednesday, June 2, 2021

Department of Education’s Office of Postsecondary Education Announces Public Hearings on Protections for Students, Loan Repayment, Targeted Loan Cancellation Programs, and Other Higher Education Regulations

The US Department of Education is holding virtual hearings on higher education regulations and reform.  The hearings will be held June 21, 23, and 24, 2021.  Following these hearings ED will solicit nominations for non-federal negotiators who can serve on the negotiated rulemaking committees, which will convene in late summer 2021.  Individuals who would like to make comments at the public hearings must register by sending an email message to no later than 12:00 PM (EST) on the business day prior to the public hearing at which they wish to speak.   Speakers should prepare a speech that is 3 to 4 minutes in length.  Topics may include:

  • Ability to benefit
  • Borrower defense to repayment
  • Certification procedures for participation in federal financial aid programs
  • Change of ownership and change in control of institutions of higher education
  • Closed school discharges
  • Discharges for borrowers with a total and permanent disability
  • Discharges for false certification of student eligibility
  • Financial responsibility for participating institutions of higher education, such as events that indicate heightened financial risk
  • Gainful employment
  • Income-contingent loan repayment plans
  • Mandatory pre-dispute arbitration and prohibition of class action lawsuits provisions in institutions’ enrollment agreements
  • Pell Grant eligibility for prison education programs
  • Public service loan forgiveness
  • Standards of administrative capability
For more information, read the announcement. 

Wednesday, April 14, 2021

US Higher Education and the Intellectualization of White Supremacy

US higher education has reflected and reinforced white supremacy, a particular form of racism, for hundreds of years.  Elite US universities were built and maintained through generations of land theft and killing of native peoples, the enslavement of Africans and their descendants, and the use of intellectualized propaganda to maintain the social order.  

Aspects of this ideology continue today and are visible to the well trained mind but invisible to the equally trained white supremacist mind, enough so that allegedly well educated people have the ability to deny or minimize its presence despite overwhelming evidence.  

White supremacy did not end when enslaved people were not held captive at universities.  It did not end with the creation of Historically Black Colleges and Universities.  It did not end when overt racial discrimination was challenged in the 1960s and 1970s or when affirmative action was instituted. It did not end with various types of ethnic studies.  It did not end with the oversampling of groups in health studies. It did not end in the 21st century when students protested racist speakers or when the names of some rich and famous white supremacists were removed from buildings or endowments.  It did not end with anti-racist studies or when some schools hired people of color for powerful positions.  White supremacy is embedded today not just in history, literature, or criminal justice courses or in the science labs.  

How much white supremacy do you see embedded at your local college or university?  How is this ideology carefully taught?  Are matters of race and ethnicity ignored (color blind racism)?  How can you observe it systematically in the classroom and in the textbooks?  Do you see it in the racial and economic class makeup of the professors and the students?  In funding? In the recruiting of "legacies"? How do schools pit people against each other and invite animosity in the name of freedom of speech?  How much critical thinking is taught?  How much effort have these institutions really made to the correct the effects of hundreds of years of oppression not only at the school, but in the local community? What numbers can you share that expose the presence of white supremacy at your cherished school? 

Sunday, April 4, 2021

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

According to the Harvard Business School, "Guild Education is an education marketplace that connects employers and universities to provide employees with “education as a benefit.” Guild's employer clients include Walmart, Lowe's, Chipotle Mexican Grill, Taco Bell, Disney and Discover Financial. Its education partners include Penn Foster High School, eCornell (part of Cornell University), CSU Global, Purdue University Global (formerly Kaplan University), University of Denver University College, UF Online (part of University of Florida), Johnson and Wales University Online, Brandman University, Bellevue University, and Ancora Education. A majority of Guild's students are working class people of color. The company has been featured in Bloomberg, Forbes, CNBC, the Wall Street Journal, and Inside Higher Education.


(2015) Guild Education founded by Rachel Romer Carlson and Brittany Stich, two Stanford graduates.
(2016) Guild Education raised $8.5 million in Series A funding. They also received an EQUIP grant from the US Department of Education "to provide low-income students with access to new models of education and training." 
(2017) Guild Education raised $20 million dollars in Series B funding. Guild Education teamed up with Lyft to offer programs to its drivers, making Lyft the "First Gig-Economy Company to Provide Access To Education Services to Contractors." Guild also worked with the Denver Public Schools system to help paraprofessionals, most of whom are people of color, become teachers. CEO Rachel Romer Carlson named to the Forbes 30 Under 30 list. 
(2018) Guild Education raised $40 million dollars in Series C funding. Felicis Ventures was a major investor. 
(2019) Guild Education valued at more than a billion dollars, a rare feat for a company founded by women. Guild Education raised $157 million in Series D funding. Investors included General Catalyst, Emerson Collective, Iconiq Capital and Lead Edge Capital. Ken Chenault joined Guild’s Board of Directors. NBA basketball star Stephen Curry also announced that he had invested in Guild Education.
(2020) Guild Education acquired edtech venture consultancy Entangled Group. CEO Rachel Romer Carlson was named a finalist for the EY Entrepreneur of the Year. 
(2021) Guild Education teamed up with online program manager 2U to connect employees with 500 bootcamp programs covering 30 disciplines and with Google to offer Google Career Certificates. It also added Ancora Corporate Training to its group of educational providers. 

Education Assistance Programs

Education assistance programs are used by many large businesses to recruit, retain, and retrain employees and to increase goodwill with former employees and the public. Corporations with these programs, include Walmart (Live Better U), Amazon (Career Choice), McDonald's (Archways to Opportunity) and Kroger (Feed Your Future). According to Wharton College professor Peter Cappelli, only a small percentage of workers actually use these benefits. 

Policy scholar Kelia Washington states that programs like those at Starbucks, Walmart, and Amazon "are limited in their ability to meaningfully increase college access and completion, and, at worst, they can create additional barriers for employees seeking to obtain high-quality, meaningful credentials." She added that "despite what may be advertised, corporate education assistance programs do not meaningfully relieve financial constraints facing employees interested in pursuing a college degree. These programs in fact limit the college and career choices for some of their employees."

Are Unicorns Real? 

Guild Education has gotten a lot of positive press as an innovative company doing good work. But what do we know about its operations? We know several of its high-profile clients (e.g. Walmart, Chipotle Mexican Grill, Taco Bell, The Walt Disney Company, Discover Financial Services, 5 Guys Inc) and educational providers (Penn Foster, University of Arizona Global Campus, Purdue University Global, University of Florida). The edtech startup is said to be valued at $1 Billion + (a unicorn), with annual revenues of $100 Million+. Paul Freedman has stated that Guild could become a $100 Billion company. But how about the real balance sheet? 

Bright Horizons is the company's largest competitor. Bright Horizons is publicly traded (BFAM) and has worked with more than 200 companies, including Home Depot and Goldman Sachs. Instride works with Arizona State University, Starbucks, and Uber

While University of Phoenix and EducationDynamics represent the old guard in for-profit education, Guild Education brings the "business model" of higher ed into the 2020s, connecting anti-union companies, low wage labor, and the new "lower ed," producing what appears to be little more than hype.

Leadership and Board Members

Rachel Romer Carlson is the CEO of Guild Education and the grand daughter of former Colorado Governor Roy Romer.  Her father Chris Romer is a lesser known politician who has worked in the oil and gas industry and charter schools.  Natalie McCollough is president and Chief Commercial Officer, Jessica Rusin is Chief Technology Officer, and Suzanne Stoller is the Chief People Officer.  Mae Podesta, VP of Finance and Strategy, is the daughter of DC power broker John Podesta. 

Guild's Board of Directors includes American business executive Kenneth Chenault, Google product innovator Wesley Chan, and Johnny C. Taylor Jr., President and CEO of the Society for Human Resource Management (SHRM). Lisa Sherman, President and CEO of the Ad Council is a board advisor. Michael Horn, co-founder of the Clayton Christensen Institute for Disruptive Innovation, is a senior strategist. Other board members include Annie Kadavy of Redpoint Ventures and Byron Deeter of Bessemer Venture Partners.  

Current Partners

Walmart's program is called Live Better U. Associates have the opportunity to earn a college degree "for just $1 a day." Partners include Penn Foster High School, Southern New Hampshire University, Purdue University Global, University of Florida, Bellevue University, and eCornell. Penn Foster provides online courses in facilities maintenance, industrial maintenance, HVAC/refrigeration, electrical, plumbing and construction. 

Disney's Aspire program partners include Purdue University Global, Southern New Hampshire University, University of Arizona online, University of Central Florida, Valencia College, Brandman University, University of Florida Online, University of Denver University College, Wilmington University and Bellevue University. In 2019, Disney reported "that they had invested $150 million in the Aspire free education program for 90,000 of the company’s cast members." 

Chipotle's program partners with Bellevue University. Wilmington University, Southern New Hampshire University, Brandman University, and Purdue University Global.

Lowes' program partners are Penn Foster High School, Brandman University, Colorado State University School of Business, Wilmington University, and Bellevue University.

Taco Bell's program partners with Brandman University, Johnson and Wales University online, Pathstream, University of Denver, and Wilmington University.

Discover Financial Services' program partners include University of Denver University College, Brandman University, Wilmington University, Bellevue University, and University of Florida Online.

Five Guys' program partners include Penn Foster High School, Brandman University, Southern New Hampshire University, Wilmington University, and Bellevue University.

Education Partners

Ancora Education is a for-profit educator focusing on vocational and technical programs.
Bellevue University is a private university based in Nebraska.
Brandman University is part of the Chapman University system.
eCornell is part of Cornell University, an elite private university.
Pathstream is a "web-based platform for teaching in-demand tech skills for work."
Penn Foster High School is a for-profit online high school owned by Bain Capital.
Purdue University Global, formerly known as Kaplan University, is a part of the Purdue University system.
Southern New Hampshire University is a large non-profit university.
University of Denver University College is a private university.
UF Online is part of the University of Florida state system.
Wilmington University is a private non-profit university based in Delaware.


Bright Horizons is the company's largest competitor. Bright Horizons is publicly traded (BFAM) and has worked with more than 200 companies, including Home Depot and Goldman Sachs. Instride works with Arizona State University, Starbucks, and Uber.

Humans Don't (Really) Matter

According to the company, from 2015 to 2019, 400,000 working adults used Guild Education to explore their paths back to school. Guild states that there is a 208 percent return on investment for every one dollar spent on education and that the 90-day retention rate for employees enrolled in Guild is 98 percent versus a 71 percent baseline employee retention rate. In 2018, according to Guild, the Lumina Foundation "agreed to research and measure the impact and effectiveness of the program and will work with the Walmart team to share findings." In 2021, Guild also claims to have "helped working learners avoid more than $363 million in student debt." 

According to the Chronicle of Higher Education, "about 15,000 of 950,000 eligible employees use the $1-a-day tuition benefit." That's only about two percent of Walmart's workforce.  In a piece for EducationDive, CEO Rachel Romer Carlson said about 3 to 5 percent of workers in the Guild programs use the benefits.  

With their other clients, is Guild providing educational services to more than two percent of the eligible workers? And how many workers are completing programs?  From this analysis, and the intentional lack of data, it would appear Guild Education for the most part is acting as an anti-union shill, for corporate PR, gathering personal data, upskilling a few workers, and creating lots of goodwill for Walmart and others.  It's possibly a profitable strategy in a world of growing automation and widening inequality, where working people have little to do with the calculus. 


Wednesday, March 24, 2021

HEI Investigation: EducationDynamics

EducationDynamics (“EDDY”) is a multichannel higher education marketer and lead generation company that services a number of for-profit and formerly for-profit online colleges, including American Intercontinental University, Colorado Technical Institute, South University, Purdue University Global (formerly Kaplan University), and University of Arizona Global (formerly Ashford University). [i]

EDDY’s operations include call centers in Boca Raton, Florida and Lenexa, Kansas where some education advisors are paid commissions for enrolling students. It appears that the call centers have been engaged in bait-and-switch tactics as consumers who are seeking work are enrolled in these schools.

Originally known as Halyard Education, EducationDynamics has faced allegations of being a predatory company for at least a decade. [ii] [iii] For more than a decade, the company, through a number of lead generation websites and tv commercials, brought hundreds of thousands of leads to the most predatory schools, including Corinthian Colleges, ITT Technical Institute, and Virginia College, all which have closed. In 2019 and 2020, EDDY purchased the assets of other dubious marketers, Thruline[iv] and Quinstreet. [v] [vi]

At least one source has indicated that Halyard and EducationDynamics purchased leads from Alec Defrawi, who was prosecuted by the FTC in 2016 for a job-education bait-and-switch scheme.[vii] While the recipients of the leads were not mentioned in the complaint, a comment on the FTC website also alluded to a relationship between Defrawi and EducationDynamics.[viii]

More recently, there is evidence on GlassDoor[ix] and Indeed[x] suggesting that EDDY has engaged in bait and switch tactics at its Boca Raton call center. Former employees have complained that the call center receives leads from people who believed they were applying for work, and that call center workers were required to enroll them in schools.

While the allegations were not as clear at the Kansas location, one EducationDynamics sales associates stated that they were getting “shady” and “uninterested” leads and that management was aware of the problem. The employee also noted that EDDY workers went under different company names to avoid scrutiny. 

[i] EducationDynamics History, Acquisitions, And Higher Ed Services
[ii] Sen. Durbin: Don't fall for college-in-your-pajamas trick | TheHill
[iii] Veterans could be first to pay as DeVos rolls back for-profit college oversight (
[iv] EducationDynamics Acquires Key Assets from Thruline Marketing
[v] EducationDynamics Acquires Assets of QuinStreet's Higher Education Vertical (
[vi] In 2012, Quinstreet was prosecuted by 20 state Attorneys General for deceiving veterans through its website. Attorneys general announce settlement with for-profit college marketer (
[vii] Robert Nolan of Halyard Capital Had Knowledge of Alec Difrawi Scams – scamFRAUDalert™ Report
[viii] Don’t quit your day job: FTC sues education lead generator for bogus job application process | Federal Trade Commission
[ix] EducationDynamics Reviews | Glassdoor
[x] Working at Education Dynamics: Employee Reviews |

Thursday, March 18, 2021

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

Even elite US universities have academic majors that result in negative or low returns on investment (ROI).   The Higher Education Inquirer I looked at some of America's most elite schools and found the worst performing majors at each school.  You can find the information yourself by going to the US Department of Education's College Scorecard.  

While the College Scorecard has limitations, including incomplete and missing data, it can still be used as one tool for choosing a college and a major to study.  The College Scorecard has a section for every school called "Salary After Attending." 

If you click on "View More Details" you can see several sections, including a section titled "Salary after Completing."  If you take a look at the range and hover over the low you see the major that had the lowest performing major in terms of salaries.  

The salary ranges for some schools are enormous, and it's amazing what you will find for low salary majors at elite schools. Some may argue that the salaries are misleading if people go on to grad school or medical school, but many do not.  And of those who do continue their studies some still end up as post docs or in other less than optimum jobs while holding an even larger amount of debt.  CalTech is the only school that does not have a low-ROI major. 

Here's a sample. 

Brown, Human Biology, $27,669
Caltech, Mechanical Engineering, $83,177
Carnegie Mellon, Fine and Studio Arts, $20,140
Columbia University, Philosophy, $28,598
Cornell, Geologic and Earth Sciences/Geosciences $25,194
Dartmouth, Biology, $32,563
Duke, Area Studies, $20,262
Emory, Biology, $16,940
Georgetown, Biological and Physical Sciences, $27,476 
Harvard, Anthropology, $26,353
Johns Hopkins, Biochemistry, Biophysics, and Molecular Biology, $14,627
MIT, Biology, $35,772
New York University, Dance, $16,478
Notre Dame, Classics and Classical Languages, Literatures, and Linguistics $20,140
Princeton, Research and Experimental Psychology, $33,993
Rice, Biochemistry, Biophysics, and Molecular Biology, $24,421
Stanford University, English, $23,649
Tufts, Fine and Studio Arts, $23,538
University of California - Berkeley, Philosophy, $20,824
University of California - Los Angeles, Music, $18,498
University of Chicago, Biology, $23,649
University of Michigan - Ann Arbor, Microbiological Sciences and Immunology, $16,169
University of North Carolina - Chapel Hill, Philosophy, $18,154
University of Pennsylvania, Film, Video, and Photographic Arts, $24,035
University of Southern California, Biochemistry, Biophysics, and Molecular Biology, $10,925
University of Virginia, Drama/Theatre Arts and Stagecraft, $18,771
Vanderbilt, Biochemistry, Biophysics, and Molecular Biology, $16,663
Wake Forest University, Health and Physical Education/Fitness, $26,353
Washington University in St Louis, Biology, $16,663
Yale, Ecology, $30,771

Friday, March 12, 2021

Coursera IPO Reveals Bleak Future For Global Labor

Coursera (COUR) is an online educational provider, most notably known for its Stanford grad founders, its free Massive Open Online Courses and its relationship with elite schools like University of Pennsylvania, University of Michigan, and University of Illinois who have provided content.

After about a decade of existence, amid the Covid pandemic, the company has decided to go public, with the help of Goldman Sachs, Morgan Stanley, Citigroup and others acting as underwriters. Coursera has never made a profit even though it has enormous margins, taking the lion's share of the revenues from its joint operations with notable schools.  

Like the Laureate Education IPO in 2017,  Coursera's intentions are global in scope.  Laureate's IPO sold the idea that there was a growing global middle class that needed education and was willing to pay for it. But Laureate's slogan "Here For Good" became a bad joke as the global economy worsened and the company downsized.  

Coursera has already served tens of millions of people, most of whom gained access for free or next to nothing--other than having an internet connection.  

Like Laureate, Coursera has also received funding from the World Bank, but in 2021 the picture is framed differently. Coursera's idea is that the world's labor force is facing a more challenging and perhaps bleak future, a "double disruption" of a global pandemic and increased automation, and the notion that COUR can profit from this disruption.  

The company's Prospectus states: 

According to our estimates based on data from the International Labour Organization, the global workforce will grow by 230 million people by 2030. This is expected to happen at a time when up to half of today’s jobs, around 2 billion, are at high risk of disappearing due to automation and other factors driving obsolescence by 2030, according to The International Commission on Financing Global Education Opportunity.

So how will Coursera make a profit?  According to Gary Roth, author of The Educated Underclass, "Many of these unprofitable, investment-capital initiatives only succeed if they can cannibalize other parts of the economy (e.g. Home Depot or Lowe's versus traditional hardware stores). The education sector is already unprofitable and requires massive amounts of public funding. We'll see if initiates like this can survive."

Roth added that Coursera is mostly "confined to pre-professional and professional areas like non-technical business disciplines that don’t require huge inputs of expertise or equipment. The humanities are out, as are the sciences. They also represent a low tier of degrees, without much respect from much of the ‘employing class’, most of whom graduated from decent-quality liberal arts or state-funded schools."

Tuesday, March 9, 2021

The Business of Higher Education

Higher education is a multi-trillion dollar industry in the US, if you include endowments, land, and other investments.  Journalists and policy people who cover the industry are often quick to put schools and their related businesses into distinct categories, but these categories are oversimplified.  One of the biggest oversimplifications is in categorizing schools as "for-profit" and "non-profit."  

For-profit higher education has typically referred to institutions operating as profit-seeking businesses, but this ignores three centuries of history, economics, and public policy showing the intermingling of for-profit institutions and non-profit enterprises with a for-profit mentality.    

For-profit schools and the for-profit mindset are not new to US education.  While elite private religious based colleges were the first schools of higher education, proprietary training was also available during the late 1700s.  It could be argued that even then, elite colleges could not have grown without the benefits of enslaving their labor, the ultimate in greed and depravity.   

After the US Civil War, through federal legislation (the Morrill Act), state flagship universities were "granted" land stolen from indigenous nations. Private and public black colleges were also formed.  For-profit business and trade schools also sprang up in many American cities, serving a growing demand for entrepreneurs and skilled labor. Private non-profit colleges followed suit.  As early as 1892, University of Chicago started a correspondence school, a money-making strategy copied by Penn State, University of Wisconsin, and many other universities.  

Since the early 20th century, critics have complained about money rather than academics driving traditional university leadership. Thorstein Veblen's book  The Higher Learning in America (1918), was subtitled, "A Memorandum on the Conduct of Universities by Business Men."  Yale and Harvard also brought on football, which was a big money maker for the schools in the early 20th century. In the Goose-Step (1923), Upton Sinclair named names of those with wealth, power, and influence--including a number of robber barons.  

With the help of government funding, higher education grew by leaps and bounds after World War II (the GI Bill) and into the 1960s and 1970s (Pell Grants and federal loans).  State universities and community colleges grew in number.  In 1972, with the reauthorization of the Higher Education Act, proprietary schools gained access to these funds to become a larger player in US higher education.  

By the 1980s, the for-profit University of Phoenix (UoPX) became a pioneer as a mega-university, a  school of over 80,000 students with an emphasis on adult learners, convenience, and a business attitude.  For-profit schools gained legitimacy as universities like Devry and UoPX became regionally accredited and others created their own national accreditors.  In the 1980s and 90s for-profit colleges grew as they became publicly traded corporations with enormous profits and political power. 

With profit-driven schools, academic labor was faced with unbundling, where components of the traditional faculty role (e.g., curriculum design) were divided, while others (e.g., research) were eliminated.  Colleges resembled academic assembly lines rather than bastions of wisdom.  But the marginalization of academic labor was not reserved to for-profit schools.  

As this great unbundling was occurring, state flagship universities became enormous research institutions with multiple missions, many of them profit driven.  Proponents of privatization, outsourcing from for-profit companies, have said that it "helps universities save money and makes them more nimble and efficient." Moody's Dennis Gephardt, however warns that "more and more are cutting closer to the academic core." 

Since the 1980s commercialization in nonprofit and public higher education has accelerated, with universities increasingly involved in enterprises focused on generating net revenue, such as licensing of patents. Indicators of for-profit incursions into nonprofit and public higher education may include university medical centers, corporate sponsored science labs, for-profit mechanisms such as endowment money managers, for-profit fees for service, for-profit marketing, enrollment services and lead generation, privatized campus services, for-profit online program managers (OPMs), privatized housing, private student loans, student loan servicers, student loan asset backed securities, and Human Capital Contracts, also known as income share agreements.

For-profit college enrollment has been in decline since the 2010-2011 school year.  University of Phoenix and Devry are shadows of their former selves,  and two other big schools, Kaplan University and Ashford University have been transformed into arms of two state universities, Purdue University Global and University of Arizona Global Campus.   

But proprietary colleges have not been the only type of colleges in decline.  Community colleges and second tier public and private colleges also reported significant enrollment and revenue losses.  Community college enrollment, in fact, has declined in absolute numbers more than for profit colleges.  

During this decade long decline, what I have referred as the College Meltdown, for-profit mechanisms have gained even ground as government aid and institutional bonds fill in revenue gaps.  Today, US higher education marketing and advertising is ubiquitous. The Harvard Business School operates in many ways like a for-profit enterprise.  And many elite schools rely on predatory for-profit online program managers to recruit students for elite certificates, adding some pocket change to their already bulging resources.