Scam Artist or Just Failed CEO?

For eight years, this blog has been investigating greed and corruption in higher education at all levels, from predatory for-profit colleges and student loan servicers to elite university endowments. We have also highlighted the good people in higher education: those who promote transparency, accountability, value, justice, and empathy.

Over those years, we have gained a good number of friends and allies and received a small amount of negative feedback. When we did face staunch criticism, or in a few cases, threats, we had to consider the sources, who were always bad actors or those who worked for them. The bad actor, Christopher (Chip) Paucek, and his attorneys, have filed a federal litigation, suing this blog and its author for giving you, our valued readers, our opinion. Specifically, Paucek has taken exception to our characterization of him as a scam artist.

We stand by our opinion of Chip based on what we learned in more than five years of investigations of 2U, the company Paucek led for over 10 years. And we hope that more people will do their own investigations.  

We took our first look at 2U in 2019. In time, we were not the only ones paying attention. Workers in social media presented an inside view of the inner workings of 2U, describing what they viewed as enrollment practices that were highly questionable. Student consumers stepped forward, saying they had been deceived by 2U. Shareholders came forward, presenting Chip’s own words, saying he had misled them. The Wall Street Journal published a number of investigative pieces about 2U and the Chronicle of Higher Education also published two articles. While none of these outlets mentioned Chip, he was the CEO at the time, and in our view was responsible. 

By March 2022, Chip Paucek was still CEO of 2U, and was formally setting up the Pro Athlete Community, also known as PAC. There was nothing secret about this venture by this time. But it did seem to us questionable that a CEO of a large corporation would be formally setting up another for-profit organization while the one he was running was failing.  

In 2024, Chip admitted in an interview that he should have left 2U in 2019, but he didn’t. Chip also admitted that without his staying at 2U during that five year period, he wouldn’t have been able to start PAC. Last June, while still being paid as a consultant to 2U, a company nearly bankrupt, he led a group of retired players to ring the bell at NASDAQ. No one in the mainstream media picked up on the hypocrisy of all that exuberance on Wall Street. But we did.  

 

Chip’s lawsuit against us was a surprise on several levels. First, our statements were just our opinion–it’s not provable or disprovable. Second, it seems nonsensical to bother with a blog seen by only 25,000 people a month. Third, and most importantly, Chip Paucek’s track record in business could reasonably lead someone to believe he is, indeed, someone who says untrue things to his own benefit. 

Our feeling is that this lawsuit is more than a man taking exception to being called out for his track record; it’s, in our view, an attempt to keep us from warning his next potential victims–the athletes, employees, and investors who will be the next to learn about his methods. 

Many states (including New Jersey, where Chip filed suit) have a law to deal with situations in which someone uses the courts to squelch investigative journalism. Accordingly, we are pursuing an Anti-SLAPP (strategic lawsuits against public participation) counter suit, asking for his case to be dismissed, and for him to pay our legal fees and court costs.  

On November 25th, David Halperin, an ally of ours for many years, let the public know that 2U is likely to be under investigation by the Federal Trade Commission and the California Attorney General. The company Chip left in 2023, but is still being paid by, as a special advisor. We are not surprised.  

If Chip would grant us an interview, we’d like to know more.

Related links:

“A Perverse Outcome”: Advocates Warn that 2U Bankruptcy Could Protect Executives at Students’ Expense (Student Borrowers Protection Center). 

Department of Education Must Protect Students Following Collapse of For-profit Education Company 2U (Project on Predatory Student Lending) 

A Hidden Risk of Online Higher Education (Student Borrower Protection Center) 

David Bernard v Climb Credit, University Accounting Services, Loan Science & 2U

2U Investors Reach $37 Million Settlement With Online Educator (Bloomberg Law)

Mounting Evidence from State Watchdog Report Proves That, Yet Again, Public Universities Are Selling Out Students to For-Profit Companies (Student Borrower Protection Center) 

USC Ends Partnership with 2U After Graduate Social Work Students Sue Over Online MSW “Diploma Mill” (Project on Predatory Student Lending)

Letter from CFPB to Richard Cordray about 2U

The Long, Steep Fall of an Online Education Giant (Wall Street Journal)

That Fancy University Course? It Might Actually Come From an Education Company.

USC Pushed a $115,000 Online Degree. Graduates Got Low Salaries, Huge Debts. (Wall Street Journal)

2024 DMN Academic Freedom Lecture (Judith P. Butler)

Judith Butler is Distinguished Professor in the Graduate School and formerly the Maxine Elliot Chair in the Department of Comparative Literature and the Program of Critical Theory at the University of California, Berkeley.

 

Related links:

Protest Stories in the Higher Education Inquirer

Perspective After a Trump Victory

It is clear that when thousands demonstrate over a prolonged period dramatic changes can be made. People have wrought changes in the past, and they will continue to do so. Dr. DuBois, the great Negro historian, wrote in his "Farewell Message": "Always human beings will live and progress to greater, broader and fuller life. The only possible death is to lose belief in this truth because the great end comes slowly; because time is long..." We should proceed calmly and with optimism—our actions tempered always by our perception of reality.

Bettina Apthekar, Big Business and the American University (1966)

Seven of Higher Education's Biggest Myths (Glen McGhee)

Several cultural myths and assumptions are deeply embedded in discussions about higher education and colleges as social institutions:

The Myth of Meritocracy
This pervasive myth assumes that higher education is a level playing field where students succeed purely based on their individual merit and hard work. However, this overlooks how socioeconomic background, cultural capital, and systemic inequalities significantly impact educational outcomes.

The Access Myth
This is the belief that simply increasing access to higher education will solve social inequality and lack of economic mobility. While education can create opportunities, it is not a silver bullet for addressing broader structural issues of poverty and labor conditions. Access for the rich is absolutely there, through legacy admissions.  The Varsity Blues (aka College Admissions Scandal) also showed how people could get into elite colleges if they were willing to pay for it.

The Myth of Neutral Education
There's an assumption that education can be politically and ideologically neutral. However, all educational systems reflect certain values, power structures and cultural assumptions. The idea of a purely objective curriculum is itself a myth.

The Myth of Free Speech and Assembly

Universities are not bastions of free speech, and student protesters this year learned that the hard way, being detained, arrested, and expelled for their efforts. Universities like UCLA have done even more to constrain protests, limiting assembly to tiny free speech zones. Presidents are afraid to challenge trustees, and with some notable exceptions, teachers and staff are unwilling to speak truth to power. Students, too, are afraid that their grades may be affected if they challenge their professors.   

The Myth of the University as a Benevolent University

Often, universities are portrayed as benevolent institutions solely focused on the betterment of society.  In reality, higher education institutions are deeply embedded in and influenced by broader societal forces and economic pressures, including pressure from university trustees and major donors. Also, elite universities have for centuries used their power and resources to take land from those with less power.  

 

 

The Myth of the Rational Student: The assumption that students are rational actors who make informed decisions about their education often ignores the impact of social, economic, and cultural factors. In addition to marketing and advertising, many students are influenced by family expectations, peer pressure, and societal norms, which can shape their choices.

The Economic Imperative Myth

This is the belief that the sole purpose of higher education is to prepare students for the job market and increase their earning potential.  This myth is understandable given the vast number of underemployed college graduates.  

This myth prioritizes economic outcomes over other valuable benefits of a college education, such as personal growth, critical thinking skills, and civic engagement.And it can lead to a decline in the quality of education, as colleges prioritize marketable programs, even if they don't align with students' skills, abilities, or interests.

 

Overemphasizing economic outcomes can exacerbate existing inequalities. Students from low-income backgrounds may feel pressured to choose majors perceived to be financially lucrative, even if they are not their first choice. This can limit their educational and career opportunities in the long run. 

 

Advocates for a broader view of higher education argue that colleges should prioritize a well-rounded education that prepares students for a variety of life paths. This includes developing critical thinking skills, fostering creativity, and promoting social justice.

The "Education Not Agitation" Act Seeks Crackdown on Campus Protestors

Republican Greg Murphy (MD) has introduced legislation in Congress to crack down on American college campuses, and to support the restriction of freedom of assembly and other Constitutional rights. The legislation is titled the Education Not Agitation Act.  

This legislation disqualifies individuals who are convicted of certain criminal offenses from receiving education related tax benefits including the American Opportunity Tax Credit, the Lifetime Learning Tax Credit, and the deduction on student loan interest. 

Specifically, if an individual is convicted of unlawful assembly, rioting, trespassing, vandalism, battery, or battery on a law enforcement officer while conducting a protest at an institute of higher education, they will be disqualified from receiving these tax benefits. 

Unlawful assembly is the legal term to describe a group of people with the mutual intent of deliberate disturbance of the peace. Trespassing is knowingly entering another owners' property or land without permission. Vandalism is the intentional destruction or defacement of another person's property. These acts, however, are subject to the varying opinions of law enforcement, prosecutors, judges, and juries.

The threat of arrest and use of force, detention, school suspensions, deportations, and other police and administrative powers may be enough to prevent peaceful protests or reduce the power of the protestors. Some universities and state governments have already acted to reduce and restrict freedom of speech and assembly on campus.

Legislation like the Education Not Agitation Act further sanctions those who may have valid reasons for resistance on existential matters like war and peace, genocide, and catastrophic climate change. History (hopefully) will record that.  

Related links:

 
What caused 70 US universities to arrest protesting students while many more did not?  

Campus Protests, Campus Safety, and the Student Imagination 

Democratic Protests on Campus: Modeling the Better World We Seek (Annelise Orleck)

Methods of Student Nonviolent Resistance

Wikipedia Community Documents Pro-Palestinian Protests on University and College Campuses

One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

A People's History of Higher Education in the US

How Would Trump's Plans for Mass Deportations Affect US Higher Education?

Higher Education Uncensored

The Higher Education Inquirer is a rare space for students (consumers), workers, debtors, and community members to speak the truth about higher education and its most important issues, including the truth related to climate change and environmental destruction, human rights, student rights and worker rights, mass surveillance and policing, sexual assault and rape culture, racism and bullying, mental illness and suicide prevention, hypercredentialism, student loan debt and underemployment, NCAA money sports, higher education scams, cheating, and AI, university endowments, land theft and gentrification by universities, and any issues that are too politically charged for other news outlets to consider.

HEI fills this role because many student newspapers cannot perform that service. No mainstream media outlet (large or industry niche) or nonprofit can do that either. In those cases, the purse strings affect what is published and what isn't. Writers and editors are censored, and sometimes they censor themselves to avoid retribution or the possibility of retribution. If you are a student journalist, whistleblower, or concerned citizen, we invite you to submit your work to us. If you have a petition or an event, or want to leak documents anonymously, please let us know.  

Related links:

Ahead of the Learned Herd

 

Good ideas are stolen. Great ideas are buried. We uncover both. And we publish them.  

A People's History of Higher Education in the US