Edtech Meltdown
Email Editor Glen McGhee at gmcghee@aya.yale.edu. Trending hashtags: #AI #borrowerdefense #collegemania #collegemeltdown #dehumanizing #doomloop #edtech #edugrift #enrollmentcliff #k12 #medugrift #opm #protests #robocollege #sciencenotsophistry #solidarity #strikedebt #subprime #uaw #unicity #workingcaste
Monday, September 30, 2024
"White Labeling" in Online Higher Education: Simplilearn
Edtech Meltdown
Sunday, September 29, 2024
Layoffs in Higher Education
The Layoff.com
is a "simple discussion board"
for workers who would like to learn more about
the rumors or possibility of job cuts in their organization. It's also
been helpful for us to understand what has been happening behind the
scenes in the US Higher Education business.
Friday, September 20, 2024
HEI receives cease-and-desist letter from Chip Paucek's lawyers
The Higher Education Inquirer has received a cease-and-desist letter from lawyers representing Chip Paucek and the Pro Athlete Community (PAC). Out of respect for PAC co-CEO Kaleb Thornhill and members of PAC, we have removed the article. However, we stand by all the facts of the story and our characterizations about Mr. Paucek, the former CEO of 2U and Smarterville (aka Hooked on Phonics). These characterizations are based on information and opinions obtained from experts in the education business in addition to publicly available business records and government records, to include earnings call transcripts, consumer lawsuits, and citizen/consumer testimony.
Tuesday, September 17, 2024
Workers at 2U expect more layoffs in 2024
After successfully completing its recent bankruptcy proceedings, 2U workers expect another round of layoffs. 2U, with its subsidiary edX, is the online program manager for dozens of elite universities, like Harvard and Yale, who offer their brand names to sell online degrees and certificates. But two schools, the University of Southern California and Fordham, have distanced themselves from the company. 2U's new board chair of is Brian Napack, who served as an executive at John Wiley and McMillan, two other companies that have faced financial challenges.
Related links:
2U Collapse Puts Sallie Mae and SLABS Back on the Radar (Glen McGhee)
2U Suspended from NASDAQ. Help for USC and UNC Student Loan Debtors.
2U-edX crash exposes the latest wave of edugrift
Saturday, August 10, 2024
2U Collapse Puts Sallie Mae and SLABS Back on the Radar (Glen McGhee)
The collapse of 2U and its subsidiary edX has put Sallie Mae (SLM) on the radar. Many of those elite brand certificate programs (under the name Harvard, MIT, Cal Berkeley) were propped up by Sallie Mae private student loans.
When the adult learners who took these certificate courses from edX did not get better jobs that they were promised, some ended up struggling to pay their loans. Some have defaulted on their loans. And a ripple occurs. As part of a larger edtech meltdown, and with IT jobs being lost each month, the situation promises to get worse.
As a hedge for SLM, most of these loans are processed into Student Loan Asset-Backed Securities (SLABS) and sold off as assets. Large investors, including pension programs are invested directly or indirectly in this mess.
Sallie Mae Boom and Bust
Sallie Mae (SLM) is a private lender that has had a number of problems. Despite being bailed out by the US government and spinning off part of itself, SLM has a poor credit rating that's bad and getting worse.
In 1972, the Nixon administration created the Student Loan Marketing Association, or “Sallie Mae” — a government-sponsored enterprise empowered by the government to use U.S. Treasury money to buy government-backed student loans from banks.
As a publicly traded corporation Sallie Mae has benefited from decades of close government connections.
SLM was very profitable (and very predatory to consumers) when there was little oversight, and the US economy was booming. But when the Great Recession hit in 2008, SLM had to be bailed out when the US government purchased billions of dollars in government-backed student loans. After that bailout, Sallie Mae returned to maximizing profitability. Over the last 5 years, SLM shares have gained 144 percent in value as student borrowers have suffered.
While the economy is doing well enough for the middle class, that could change for the worse, not just for consumers, but also Sallie Mae.
Recent Troubles, Troubles Ahead
In July 2024, Moody's changed its outlook on SLM's long-term from stable to negative,
The bond ratings were already less than stellar, a Ba1 for senior
unsecured notes. Ratings for some of its Student Loan Asset-Backed
Securities were downgraded in 2022.
Help for Student Debtors
For student loan debtors, we recommend joining the Debt Collective and contacting other advocates, including the Student Borrower Protection Center and the Project on Predatory Student Lending.
Related links:
2U Suspended from NASDAQ. Help for USC and UNC Student Loan Debtors.
2U-edX crash exposes the latest wave of edugrift (2023)
2U Virus Expands College Meltdown to Elite Universities (2019)
Wednesday, August 7, 2024
2U Suspended from NASDAQ. Help for USC and UNC Student Loan Debtors.
2U (TWOU), the online program manager for a number of elite and brand name schools has been suspended from the NASDAQ today for regulatory non-compliance.
A number of law firms have also announced potential shareholder lawsuits as 2U attempts to reorganize.Their contention is that shareholders were misled by key executives of 2U.
If these legal contentions are true, the Securities and Exchange Commission has the power to fine and ban executives and former executives from taking part as senior executives with other publicly traded companies. There is a precedent for this. In 2018, the former CEO and CFO of ITT Tech (ESI), Kevin Modany and Daniel Fitzpatrick, accepted penalties.
Potential Relief from Fraud for Elite Online Degrees and Certificates
2U has operated as an online program manager for about 70 clients, mostly highly regarded universities, including Harvard University, Yale University, MIT, University of Pennsylvania, Columbia University, Georgia Tech, University of California, Berkeley, Pepperdine University, Rice University, University of North Carolina, and University of Texas. 2U made false claims about the relationship it had with corporate employers, leading consumers to believe that these brand name credentials would be a ticket to better work.
Students who used federal student loans for 2U's online graduate programs for the University of Southern California and the University of North Carolina may be eligible for debt forgiveness if they can prove that they were defrauded. We recommend contacting the Project on Predatory Student Lending for a potential remedy.
For those who were misled about elite certificates, we recommend contacting the Federal Trade Commission and your state attorney general. However, both options will not result in easy answers.
Related links:
2U Declares Chapter 11 Bankruptcy. Will Anyone Else Name All The Elite Universities That Were Complicit?2U-edX crash exposes the latest wave of edugrift (2023)
2U Virus Expands College Meltdown to Elite Universities (2019)
Saturday, August 3, 2024
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)
Guild Education: Enablers of Anti-Union Corporations and Subprime College Programs
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)Thursday, July 25, 2024
2U Declares Chapter 11 Bankruptcy. Will Anyone Else Name All The Elite Universities That Were Complicit?
2U declared Chapter 11 bankruptcy today and the company is now valued at less than $5M. That's a small shadow of the $5.4B perceived value it had in mid-2018.
As a company that will be owned and operated by vulture capitalists (VCs), 2U (TWOU) and its subsidiary edX will fall below the radar. But that won't stop the company from ensnaring more students for overpriced "elite" and "brand name" degrees and certificates--as it tries to survive. In fact, it might make it easier. The visible economic market and its media won't care anymore.
Somehow, these VC firms will try to extract value from the bankruptcy deal. But how they do that is a mystery. C-suite executives have already gotten some of their bonuses, leaving little else for workers. Reducing labor costs (firing people) will be essential. Not paying their bills is another. Continuing to deceive consumers would be difficult to change. Even after the deal, 2U will still be laden with more than $400M in debt.
Since 2019, we have tried to expose 2U and its business practices, as well
as the role of elite university partners in enabling the sale of advanced degrees and
edtech certificates that led to few good jobs and lots of consumer debt. When they acquired edX from Harvard and MIT for $800M, we doubled down.
The Higher Education Inquirer has been the only outlet to name the elite schools that were complicit in this scheme that took money away from consumers just trying to get ahead. Not just USC, but Harvard and MIT, and Yale, and Cal Berkeley, and the University of North Carolina, and Syracuse, and Pepperdine, and many others. Check out the links below to learn more about how this higher ed scheme developed and collapsed. And how this is just the latest wave of edugrift.
Related links:
2U-edX crash exposes the latest wave of edugrift (2023)
2U Virus Expands College Meltdown to Elite Universities (2019)
Sunday, July 14, 2024
Methods of Student Nonviolent Resistance
Resistance has been an essential part of democracy. And the Higher Education Inquirer has reported on a number of nonviolent actions taken by college students and workers across the US. We have also recognized the brutal physical and economic violence that has been a part of US history and social structure and a major contributor to the ineffective counter-violence that has sometimes resulted.
According to the Albert Einstein Institution, "far too often people struggling for democratic rights and justice are not aware of the full range of methods of nonviolent action. Wise strategy, attention to the dynamics of nonviolent struggle, and careful selection of methods can increase a group’s chances of success."Nonviolent strategies include three broad categories: (1) nonviolent protest and persuasion, (2) noncooperation (social, economic, and political), and (3) nonviolent intervention.
A list of 198 Methods of Nonviolent Action is posted on the Brandeis University website. The list is based on Gene Sharp's Methods of Nonviolent Action (1973), but this document is not exhaustive. Strategies and tactics may need to change with what works in these times: with new technology and greater understanding about how humans think and behave.
Historical Examples
In the early 1940s, James Farmer, a Howard Divinity School graduate, with students from the University of Chicago established the Congress of Racial Equality (CORE), an interracial group focused on nonviolent direct action for civil rights.
The 1960s were recognized for student activism, including the
formation of the Student Nonviolent Coordinating Committee (SNCC), at Shaw University. This organization, and people like Ella Baker, were an
essential part of the civil rights movement.
In the 1970s and 1980s, divestment campaigns were an important part of the campaign against South African apartheid. Protesting for divestment against private prisons has also occurred on US campuses.
Most recently, there were a number of campus occupations to protest the destruction of Gaza and the mass killing of civilians. And protests about climate
change have been visible on a number of campuses for years. In these cases, we can expect more serious conflict to occur if these issues are not sufficiently addressed.
As always, we appreciate your comments and constructive criticism.
Related links:
Black Study, Black Struggle (Robin D.G. Kelley, Boston Review)
A People's History of Higher Education in the US?
Student Nonviolent Coordinating CommitteeModeling civil unrest in the United States: some historical cases (Bryan Alexander)
One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education
US Higher Education and the Intellectualization of White Supremacy
Democratic Protests on Campus: Modeling the Better World We Seek (Annelise Orleck)
Wikipedia Community Documents Pro-Palestinian Protests on University and College Campuses
Rutgers University Workers Waging Historic Strike For Economic Justice (Hank Kalet)
Terri Givens and “Radical Empathy: Finding a Path to Bridge Racial Divides”I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers)
DEBT STRIKE! (Debt Collective)