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Thursday, October 31, 2024

Why the Higher Education Inquirer Continues to Gain Popularity

The Higher Education Inquirer (HEI) continues to grow, with no revenues, no advertising, and no SEO help. And for good reason. HEI fills a niche for student/consumers and workers and their allies. It provides valuable information about how the US higher education system works and what folks can do to navigate that system. 


We cover layoffs and union organizing and strikes in higher education, and we expose predators with some degree of risk-risk that other outlets often won't take. We take a stand on holding big business accountable and we side with struggling student debtors and their families. We question and interrogate higher ducation technology and credentialsAnd we dispel myths, disinformation, and hype. 

We research documents of all sorts, including information from the US Department of Education, Securities and Exchange Commission, Department of Veterans Affairs, Department of Defense, Department of Labor, and Federal Election Commission

The Higher Education Inquirer provides trustworthy information and expert opinions and analysis. Our list of authors is diverse and impressive, for many reasons. HEI treats our readers with respect. It gives students and workers a voice, accepting information and evidence from whistleblowers. And it allows for comments (including anonymous comments), comments that we value. 

When others do accept our research, we appreciate it. HEI has been a background source for the NY Times, Bloomberg, Chronicle of Higher Education, ProPublica, Forbes, Military Times, the American Prospect, and several other outlets. We strive to be ahead of the learned herd.  


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

HurricaneTWOU.com: Digital Protest Exposes Syracuse, USC, Pepperdine, and University of North Carolina in 2U edX Edugrift (2024)

2U-edX crash exposes the latest wave of edugrift (2023)

2U Virus Expands College Meltdown to Elite Universities (2019)

Buyer Beware: Servicemembers, Veterans, and Families Need to Be On Guard with College and Career Choices (2021)

College Meltdown 2.1 (2022)

EdTech Meltdown (2023)  

Erica Gallagher Speaks Out About 2U's Shady Practices at Department of Education Virtual Listening Meeting (2023)

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?

HurricaneTWOU.com: Digital Protest Exposes Syracuse, USC, Pepperdine, and University of North Carolina in 2U edX Edugrift (2024)

2U-edX crash exposes the latest wave of edugrift (2023)

2U Virus Expands College Meltdown to Elite Universities (2019)

Buyer Beware: Servicemembers, Veterans, and Families Need to Be On Guard with College and Career Choices (2021)

College Meltdown 2.1 (2022)

EdTech Meltdown (2023)  

Erica Gallagher Speaks Out About 2U's Shady Practices at Department of Education Virtual Listening Meeting (2023)

Wednesday, February 21, 2024

Trump 2024 and the Student Loan Portfolio

The US Department of Education (ED) handles the student loans of about 40 million US citizens, holding on to about $1.6 Trillion in debt--which is considered an asset to the US government.  And ED-FSA (Federal Student Aid) hires tens of thousands of workers, mostly contractors, to service the debt. But that could change in a few years. If Donald Trump is elected President.  

Under President Trump, debtors might expect that their loans to be transferred over to large corporations--at some point--with the sale being used to reduce the federal deficit, and to cut labor at ED. This would aid in the effort to eliminate the US Department of Education, as Trump has promised on the campaign trail.

Selling off the student loan debt portfolio may or may not require approval from anyone outside of the President. At least one study, by McKinsey & Company, has already been conducted regarding this possibility. 

In 2019, the Trump administration hired McKinsey to analyze the $1.5 trillion federal student loan portfolio. This analysis was part of a broader effort to explore options for managing the portfolio, including potentially selling off some of the debt. Results were never published. The analysis was conducted alongside a study by FI Consulting, which focused on the economic value of the portfolio, noting that the valuation could vary depending on future default rates, prepayment rates, and economic conditions.

The new owners of the sold off debt would most likely be big banks and other large companies, both domestic and foreign, that find value in the debt. There would be political and social resistance.  And many questions would need to be answered, in detail.

Would large banks or other large corporations be better stewards of the debt?

Would the bidding be transparent?  

Would consumers be able to challenge loan repayments or ask for forgiveness?  

What would happen to the contracts of the existing debt servicers?  

Will this expand the existing Student Loan Asset-Backed Securities market? 


Related link:

The Student Loan Mess Updated: Debt as a Form of Social Control and Political Action

Tuesday, February 20, 2024

Capital One-Discover Merger: Another Blow to the Educated Underclass

Capital One and Discover Financial Services have publicly announced plans to merge. The deal worth a reported $35B would give this new entity greater power, competing (or colluding) on a higher level with JP Morgan Chase, Visa, and Mastercard.  

For working people who know anything about finance and debt, and have debt themselves, this should be frightening. Together, both banks hold about 400 million credit cards.  

Capital One and Discover are both banks and high-interest credit card lenders. That means they are issued cheap money from the US Federal Reserve and lend it to naive and desperate consumers. 

Discover student loans are used by college students who have used up their Pell Grants and federal loans and are working (and borrowing) to graduate or extend their education. The interest rates can exceed 12 percent.  

Nelnet is the student loan servicer for Discover private student loans, but their $10.4 Billion portfolio is for sale.

Discover also bundles student loans and sells them as securities, student loan asset-backed securities or SLABS. Institutional investors, like retirement and investment funds, buy the debt up as stable investments.  

Capital One does not have student loans, but college students use credit cards from both of these companies to make their way through school, paying the price later. 

While there may be regulatory challenges for the Capital One-Discover deal, it's not likely that the merger, or any other financial consolidation, will be prevented--no matter how onerous it is to consumers.  

Related links:

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

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

The Student Loan Mess Updated: Debt as a Form of Social Control and Political Action

SLABS: The Soylent Green of US Higher Education

Monday, February 19, 2024

Ambow Education Continues to School Naive Investors

The Higher Education Inquirer has been tracking Ambow Education (AMBO) for about two years.  Ambow Education is the owner of the NewSchool of Architecture and Design in San Diego (NSAD) and the former owner of Bay State College which closed in 2023. NSAD is facing serious accreditation issues.  The only other asset to speak of is an idea called HybriU, which may or may not be a real technology.  

Tomorrow, February 20, 2024, Ambow completes a 1-10 reverse stock split to pump up its stock price just enough to avoid delisting from the New York Stock Exchange (NYSE). The company, which until recently was based in Beijing, has a troubled history. At one time it was reportedly valued at $1 Billion. Today it's valued at about $9 million. The latest company headquarters is in a small, rented office space in Cupertino, California.  

What we saw in trading on Friday, one business day before the reverse stock split, was alarming: share volume was more than 280 times normal: 70 million shares versus a daily average of about a quarter million. The price more than doubled, from 12 cents a share to 30 cents at close. The highest price was 58 cents, almost five times the day's beginning price. What we were seeing was more than abnormal. Was it stock manipulation? We cannot say.  

HEI asked Ambow for a comment but they had no answer for this doubling in value in less than 24 hours and for any news of material change. We also reported the event to the US Securities and Exchange Commission (SEC)--twice in the same day. These reports were in addition to previous complaints to the SEC and the NYSE.
$AMBO is a Clown Car of Lies, Incompetence, and Poor Governance Speeding toward a Second Delisting (Ecliipse Research)

Tuesday, May 2, 2023

Higher Education Inquirer Selected Archive (2016-2023)

In order to streamline the Higher Education Inquirer, we have removed the HEI archive from the right panel of the blog; information that could only be seen in the non-mobile format.   

The HEI archive has included a list of important books and other sources, articles on academic labor, worker movements, and labor actions, student loan debt, debt forgiveness, borrower defense to repayment and student loan asset-backed securities, robocolleges, online program managers, lead generators, and the edtech meltdown, enrollment trends at for-profit colleges, community colleges, and small public and private universities, layoffs and closings of public and private institutions, consumer awareness and organizational transparency and accountability, neoliberalism, neo-conservativism, neo-fascism and structural racism in higher education, and strategic corporate research.  

HEI Resources  
Rutgers University Workers Waging Historic Strike For Economic Justice (Hank Kalet)Borrower Defense Claims Surpass 750,000. Consumers Empowered. Subprime Colleges and Programs Threatened.I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers)
Erica Gallagher Speaks Out About 2U's Shady Practices at Department of Education Virtual Listening Meeting
An Email of Concern to the People of Arkansas about the University of Phoenix (Tarah Gramza)
University of California Academic Workers Strike for Economic Justice
The Power of Recognizing Higher Ed Faculty as Working-Class (Helena Worthen)
More Transparency About the Student Debt Portfolio Is Needed: Student Debt By Institution
Is Your Private College Financially Healthy? (Gary Stocker)
The College Dream is Over (Gary Roth)
"Edugrift": Observations of a Subprime College Lead Generator (by J.D. Suenram)
The Tragedy of Human Capital Theory in Higher Education (Glen McGhee)
Let's all pretend we couldn't see it coming (US Working Class Depression)
A preliminary list of private colleges at risk
The Growth of Robocolleges and Robostudents
A Letter to the US Department of Education and Student Loan Servicers on Behalf of Student X (Heidi Weber)
The Higher Education Assembly Line
College Meltdown Expands to Elite Universities
The Slow-Motion Collapse of America’s Largest University
What happens when Big 10 college grads think college is bullsh*t?
Coronavirus and the College Meltdown
Academic Capitalism and the next phase of the College Meltdown
When College Choice is a Fraud
Charlie Kirk's Turning Point Empire Takes Advantage of Failing Federal Agencies As Right-Wing Assault on Division I College Campuses Continues
Navient and the Zombie SLABS Meltdown (Bill Harrington)
College Meltdown at a Turning Point
Charting the College Meltdown
Colleges Are Outsourcing Their Teaching Mission to For-Profit Companies. Is That A Good Thing? (Richard Fossey)
Rebuilding the Purpose of the GI Bill (Garrett Fitzgerald)
Paying the Poorly Educated (Jack Metzger)
Forecasting the US College Meltdown
College Meltdown 2.0
State Universities and the College Meltdown
"20-20": Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis)
Visual Documentation of the College Meltdown Needed




Saturday, May 28, 2022

Ambow Education Facing Financial Collapse (Dahn Shaulis and Glen McGhee*)

Ambow touts its place on the New York Stock Exchange (NYSE), but that status may be short-lived. 

Ambow Education Holding (AMBO) is facing financial peril--again.  

The Cayman Islands corporation, with headquarters in Beijing, People's Republic of China, has had financial troubles before. In 2013, the company was liquidated after allegations of financial improprieties. 

Ambow Education was reorganized and quickly found enough capital to branch out, as if nothing had happened in 2013.  The company now offers a variety of services, including several for-profit K-12 schools in China.  Ambow also claims to have patents in a variety of edtech areas, including educational surveillance. *

In 2017 and 2020, Ambow ventured into US for-profit colleges, acquiring Bay State College (BSC) in Boston and NewSchool of Architecture and Design (NSAD) in San Diego.  

According to US Securities and Exchange Commission (SEC) reports, Ambow acknowledges that the People's Republic of China has a powerful influence on the company. How this relates to its US holdings is not apparent--but insiders have questioned the role of Chinese executives and their business practices.  

In January 2020, Bay State College settled with the Massachusetts Attorney General for $1.1 million for misleading students and for violating state statutes on aggressive telemarketing practices and inflating job placement figures. 

And during the Covid pandemic, BSC has worked with Cisco to track students on campus, which may seem intrusive to some Americans. 

"Faculty, staff, and students were each issued a lanyard and a badge holder containing a Bluetooth® Low-Energy (BLE) beacon, which they were required to wear visibly at all times while on campus. Each Meraki AP contains a Bluetooth antenna that listens for intermittent pings emitted by the campus ID badge holders. As people move around campus each day, multiple Meraki APs collect and triangulate the beacon data to track and record their relative location over time. The APs collect and warehouse more than 300,000 data points per day...."

Despite the elimination of its physical library and its receipt of US government bailout funds, Bay State College continues to lose money.   

Faculty and staff have departed as enrollment has dropped below 700 students.  The school is also facing sanctions from its accreditor, the New England Commission of Higher Education (NECHE).

Bay State College enrollment has declined from more than 1700 students in 2012 to less than 700 today. 

NewSchool, has a good record with student outcomes, but has faced issues lately with failure to file reports to the California Bureau for Postsecondary Education (BPPE).  Like Bay State College, NSAD has continued to lose money--as enrollment has dropped below 500 students--making current practices unsustainable. 

Ambow promises to use "shared services" between BSC and NSAD to increase efficiency.  This includes the sharing of key executives. And insiders tell the Higher Education Inquirer they believe this model may be useful if Ambow decides to expand its presence in the US. But sharing key executives between two schools, 3000 miles apart, may be in violation of accrediting policies.  

Meanwhile, AMBO shares have been selling below $1 a share since December 17, 2021. 

Ambow (AMBO) shares have been trading below $1 a share since December 17, 2021, down 99.76 percent from its peak. (Source: Seeking Alpha). Click on graph for a clearer image.

With a second strike (a second delisting) in the US, it's hard to imagine more capital available.  But that hasn't stopped the perpetually confident CEO Jin Huang from trying to wrangle another $100 million from unwary investors.  

Both the NYSE and SEC have no comment about this impending meltdown.   

*Thanks to Glen McGhee for his analysis of Ambow patents. 

Related link: College Meltdown 2.2: Who’s Minding the Store? 

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

Related link: College Meltdown 2.1 

Related link: The Growth of "RoboColleges" and "Robostudents"

Related link: The Higher Education Assembly Line