Insiders in higher education and at bond rating agencies know how bad the College Meltdown has become. They have been tracking it for years, and know the most vulnerable schools by name. What indicators do they use, and why aren't the People privy to the information?
In May 2017, I posted the short piece, Charting the College Meltdown. The article included a spreadsheet of key variables that could be used to gauge the direction and intensity of the downturn in US higher education.
Three years ago, revenues were the only variable in the green, and those numbers were from 2015. Clearly, even revenues had been declining earlier at many institutions, especially at for-profit colleges, community colleges, and smaller private schools.
Additional information has been compiled and analyzed since 2017. For example, Gary Roth's "The Educated Underclass" (2019), painted a disturbing picture of US higher education and gainful employment, and the larger economy that had been producing lots of low-wage jobs and fewer good jobs with security. And enrollment data from the National Student Clearinghouse point to a hollowing out of America and significant declines in state enrollments.
Nathan Grawe's analysis of demographic trends also projected a dramatic loss in the college enrollment pipeline in 2026, a ripple effect of the 2008 Great Recession.
One of the problems with even doing an analysis is the lack of data and the quality of data. As part of their plan to deregulate, defund, and privatize higher education, the Trump Administration has discouraged transparency and accountability measures put in place during the Obama Administration.
Student loan defaults, measured by the 3-year student loan default rate, is a poor indictor of problems in the student loan system. Colleges and universities have learned how to game the system, offering deferments to students to keep debtors from defaulting in the three-year window. Student loan repayment rates, a good proxy for long-term defaults, have been eliminated from the College Scorecard.
Variables, like the actual quality of Student Loan Asset-Backed Securities (SLABS) can only be gained through inside information.
The New York Federal Reserve had been a source for the College Meltdown, but recently they appeared to be more like cheerleaders of the industry rather than objective analysts.
In addition, US Department of Education data is released at a plodding pace, often lagging about 2 years. That's why data from the National Student Clearinghouse are so important.
What variables do you think are the most important in gauging the higher education business? And what variables should be added or removed from the chart?
More resources from College Meltdown
Observations of the College Meltdown in Real Time
College Meltdown Resources (includes college choice and career planning tools)
A preliminary list of private colleges at risk
Are Brand Name Coding Bootcamps the New Higher Education Scam?
College Meltdown Expands to Elite Universities
Education is a Racket
Higher Learning Commission: Accreditation Is No Sign Of Quality
The Slow-motion Collapse of America's Largest University
Enrollment declines, campus closings, economic losses and the hollowing out of America
Community Colleges at the Heart of the College Meltdown
What happens when Big 10 grads think "college is bullsh*t"?
US Departments of Education, Defense, and Veterans Affairs Shirk Responsibilities to Servicemembers, Veterans, and Their Families
The College Meltdown Is Painfully Obvious
When College Choice is a Fraud
Music Videos of the College Meltdown
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