The US Department of Education (ED) has stopped posting up-to-date Freedom of Information (FOIA) logs. These logs had been posted and updated from 2011 to September 2024 to improve transparency and accountability to the agency. We have reached out ED for a statement. We are also awaiting for a number of information requests, some of which have taken more than 18 months for substantive replies.
In a move poised to send millions of Americans into financial distress, the U.S. Department of Education announced this week that its Office of Federal Student Aid (FSA) will resume collections on defaulted federal student loans starting Monday, May 5, 2025. This marks the official end of a pandemic-era pause in collections that has been in place since March 2020.
The timing of the announcement is already sparking anxiety—but it's just the beginning. While collections begin next month, experts warn that by September, we could see a full-scale panic as a surge of borrowers hit the 270-day threshold for loan delinquency, legally tipping them into default status. The clock is ticking for millions who have missed or deferred payments during the chaotic restart of loan servicing.
According to the Department, 42.7 million Americans now owe more than $1.6 trillion in student loan debt. Shockingly, only 38 percent are current on their payments, and nearly 10 million borrowers are already in default or serious delinquency. These numbers are expected to climb sharply as repayment systems falter and financial strain deepens.
Education Secretary Linda McMahon, in announcing the decision, framed the return to collections as a victory for taxpayers. “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” she said, taking aim at the previous administration’s debt relief efforts, which she labeled “illegal loan forgiveness schemes.”
But for millions of borrowers—especially those from working-class backgrounds and communities of color—this policy marks the end of hope. Many had placed their faith in long-promised reforms and debt relief that never fully materialized.
Hope, however, is not entirely dead. The forthcoming book The Student Debt Crisis: America’s Moral Urgency by Dr. Jamal Watson—journalist, professor, and associate dean at Trinity Washington University—lays bare the human cost of the crisis. Scheduled for release in September 2025, the book is expected to coincide with the fallout from a wave of new defaults. Watson calls the debt system “a modern form of indentured servitude,” and his work amplifies the voices of those crushed under its weight.
Beginning next week, the Department will restart the Treasury Offset Program, which allows the federal government to seize tax refunds and federal benefits to collect on unpaid loans. Administrative wage garnishment is also scheduled to resume later this summer. Borrowers in default will receive email instructions in the coming weeks, urging them to contact the Default Resolution Group to avoid harsher penalties.
In an attempt to soften the blow, the Department has announced an enhanced Income-Driven Repayment (IDR) process, promising to streamline enrollment and eliminate annual income verification. Additionally, roughly 1.9 million stalled borrower applications, held up since August 2024, are slated for processing beginning in May.
Still, these administrative changes are unlikely to ease the broader economic pain. The reactivation of collections amid economic uncertainty and servicing confusion is expected to deepen the divide between those who can navigate the system—and those who cannot.
The Higher Education Inquirer has long tracked the rise of the “educated underclass”—graduates and dropouts alike, burdened with debt but lacking economic mobility. For them, May 5 is only the beginning. The real crisis looms in September, when an avalanche of defaults could further destabilize lives, families, and entire communities.
We will be here to report it.
If you’re facing default, garnishment, or administrative hurdles, the Higher Education Inquirer wants to hear your story. Email us confidentially to be part of our ongoing investigation.
In a recent flurry of executive orders, former President Donald Trump has escalated his administration’s long-running war on American higher education, targeting college accreditation processes, foreign donations to universities, and elite institutions like Harvard and Columbia. Framed as a campaign for accountability and meritocracy, these actions are in reality part of a broader effort to weaponize public distrust, reinforce ideological purity tests, and strong-arm colleges into political obedience.
But even if Trump's crusade were rooted in good faith—which it clearly is not—his chosen mechanism for “fixing” higher education, the accreditation system, is already deeply flawed. It’s not just that Trump is using a broken tool for political ends—it's that the tool itself has long been part of the problem.
Accreditation in U.S. higher education is often mistaken by the public as a sign of quality. In reality, it’s often a rubber stamp—granted by private agencies funded by the very schools they evaluate. “Yet in practice,” write economists David Deming and David Figlio, “accreditors—who are paid by the institutions themselves—appear to be ineffectual at best, much like the role of credit rating agencies during the recent financial crisis.”
As a watchdog of America’s subprime colleges and a monitor of the ongoing College Meltdown, the Higher Education Inquirer has long reported that institutional accreditation is no sign of academic quality. Worse, it is frequently used by subprime colleges as a veneer of legitimacy to mask predatory practices, inflated tuition, and low academic standards.
The Higher Learning Commission (HLC), the nation’s largest accreditor, monitors nearly a thousand institutions—ranging from prestigious schools like the University of Chicago and University of Michigan to for-profit, scandal-plagued operations such as Colorado Technical University, DeVry University, University of Phoenix, and Walden University. These subprime colleges receive billions annually in federal student aid—money that flows through an accreditation pipeline that’s barely regulated and heavily compromised.
On the three pillars of accreditation—compliance, quality assurance, and quality improvement—the Higher Learning Commission often fails spectacularly when it comes to subprime institutions. That’s not just a bug in the system; it’s the system working as designed.
Accreditors like the HLC receive dues from member institutions, giving them a vested interest in keeping their customers viable, no matter how exploitative their practices may be. Despite objections from the American Association of University Professors, the HLC has accredited for-profit colleges since 1977 and ethically questionable operations for nearly two decades.
As Mary A. Burgan, then General Secretary of the AAUP, put it bluntly in 2000:
"I really worry about the intrusion of the profit motive in the accreditation system. Some of them, as I have said, will accredit a ham sandwich..."
[Image: From CHEA: Higher Learning Commission dues for member colleges. Over the last 30 years, HLC has received millions of dollars from subprime schools like the University of Phoenix.]
The Council for Higher Education Accreditation (CHEA), which oversees accreditors, acts more like a trade association than a watchdog. Meanwhile, the U.S. Department of Education—the only federal entity with oversight responsibility—has done little to ensure quality or accountability. Under the Trump-DeVos regime, the Department actively dismantled what little regulatory framework existed, rolling back Obama-era protections that aimed to curb predatory schools and improve transparency.
In 2023, an internal investigation revealed that the Department of Education was failing to properly monitor accreditors—yet Trump’s solution is to hand even more power to this broken apparatus while demanding it serve political ends.
While Trump's attacks on Harvard are rooted in personal and political animus, it's important not to portray the university as a defenseless bastion of the common good. Harvard is already deeply entrenched in elite power structures—economically, socially, and politically.
The university’s admissions policies have long favored legacy applicants, children of donors, and the ultra-wealthy. It has one of the largest endowments in the world—over $50 billion—yet its efforts to serve working-class and marginalized students remain modest in proportion to its vast resources.
Harvard has produced more Wall Street bankers, U.S. presidents, and Supreme Court justices than any other institution. Its graduates populate the upper echelons of the corporate, political, and media elite. In many ways, Harvard is the establishment Trump claims to rail against—even if his own policies often reinforce that very establishment.
Harvard is not leading a revolution in equity or access. Rather, it polishes the credentials of those already destined to lead, reinforcing a hierarchy that leaves most Americans—including working-class and first-generation students—on the outside looking in.
While Trump rails against elite universities in the name of “meritocracy,” there is a glaring omission in the conversation: the entrenched unfairness of legacy admissions. These policies—where applicants with familial ties to alumni receive preferential treatment—are among the most blatant violations of meritocratic ideals. Yet neither Trump’s executive orders nor the broader political discourse dare to address them.
Legacy admissions are a quiet but powerful engine of privilege, disproportionately benefiting white, wealthy students and preserving generational inequality. At institutions like Harvard, Yale, and Princeton, legacy applicants are admitted at significantly higher rates than the general pool, even when controlling for academic credentials. This practice rewards lineage over talent and undermines the very idea of equal opportunity that higher education claims to uphold.
Despite bipartisan rhetoric about fairness and access, few politicians—Democratic or Republican—have challenged the legitimacy of legacy preferences. It’s a testament to how deeply intertwined elite institutions are with the political and economic establishment. And it’s a reminder that the war on higher education is not about fixing inequalities—it’s about reshaping the system to serve different masters.
Trump’s newfound concern with educational “results” is laced with hypocrisy. The former president’s own venture into higher education—Trump University—was a grift that ended in legal disgrace and financial restitution to defrauded students. Now, Trump is posing as the savior of academic merit, while promoting an ideologically-driven overhaul of the very system that allowed scams like his to thrive.
By focusing on elite universities, Trump exploits populist resentment while ignoring the real scandal: that billions in public funds are siphoned off by institutions with poor student outcomes and high loan default rates—many of them protected by the very accrediting agencies he now claims to reform.
Trump's latest actions are not reforms—they're retribution. His executive orders target symbolic elites, not systemic rot. They turn accreditation into a partisan tool while leaving the worst actors untouched—or even empowered.
Meanwhile, elite institutions like Harvard remain complicit in maintaining a class hierarchy that benefits the powerful, even as they protest their innocence in today’s political battles.
Real accountability in higher education would mean cracking down on predatory schools, reforming or replacing failed accreditors, and restoring rigorous federal oversight. But this administration isn't interested in cleaning up the swamp—it’s repurposing the muck for its own ends.
The Higher Education Inquirer remains committed to pulling back the curtain on these abuses—no matter where they come from or how well they are disguised.
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In this so-called Age of Information, we find ourselves plunged into a paradoxical darkness—a time when myth increasingly triumphs over truth, and justice is routinely deformed or deferred. At The Higher Education Inquirer, we call it the Digital Dark Ages.
Despite the unprecedented access to data and connectivity, we’re witnessing a decay in critical thought, a rise in disinformation, and the erosion of institutions once thought to be champions of intellectual rigor. Higher education, far from being immune, is now entangled in this digital storm—none more so than in the rise of robocolleges and the assault on public universities themselves.
The myths of the Digital Dark Ages come packaged as innovation and access. Online education is heralded as the great equalizer—a tool to democratize knowledge and reach underserved students. But as the dust settles, a darker truth emerges: many of these online programs are not centers of enlightenment, but factories of debt and disillusionment. Myth has become a business model.
The fantasy of upward mobility through a flexible online degree masks a grim reality. The students—often working-class professionals juggling jobs and families—become robostudents, herded through algorithmic coursework with minimal human interaction. The faculty, increasingly adjunct or contract-based, become roboworkers, ghosting in and out of online discussion boards, often managing hundreds of students with little support. And behind it all stands the robocollege—a machine optimized not for education, but for profit.
The rapid growth of online-only education has introduced a new breed of institutions: for-profit, non-profit, secular, and religious, all sharing a similar DNA. Among the most prominent are Southern New Hampshire University, Grand Canyon University, Liberty University Online, University of Maryland Global Campus, Purdue University Global, Walden University, Capella University, Colorado Tech, and the rebranded former for-profits now operating under public university names, like University of Phoenix and University of Arizona Global Campus.
These robocolleges promise convenience and career readiness. In practice, they churn out thousands of credentials in fields like education, healthcare, business, and public administration—often leaving behind hundreds of billions of dollars in student loan debt.
The Robocollege Model is defined by:
Automation Over Education
Aggressive Marketing and Recruitment
High Tuition with Low Return
Shallow Curricula and Limited Academic Support
Poor Job Placement and Overburdened Students
These institutions optimize for profit and political protection, not pedagogy. Many align themselves with right-wing agendas, blending Christian nationalism with capitalist pragmatism, while marketing themselves as the moral antidote to “woke” education.
Former President Donald Trump didn’t just attack political rivals—he waged an ideological war against higher education itself. Under his administration and continuing through his influence, the right has cast universities as hotbeds of liberal indoctrination, cultural decay, and bureaucratic excess. Public universities and their faculties have been relentlessly vilified as enemies of “real America.”
Central to Trump’s campaign was the targeting of Diversity, Equity, and Inclusion (DEI) initiatives. Executive orders banned federally funded diversity training, and right-wing media amplified the narrative that DEI was a form of “reverse racism” and leftist brainwashing. That playbook has since been adopted by Republican governors and legislatures across the country, leading to:
Defunding DEI Offices: Entire departments dedicated to equity have been dismantled in states like Florida and Texas.
Censorship of Curriculum: Academic freedom is under siege as laws restrict the teaching of race, gender, and American history.
Chilling Effects on Faculty: Scholars of color, queer faculty, and those doing critical theory face retaliation, termination, or self-censorship.
Hostile Campus Environments: Students in marginalized groups are increasingly isolated, unsupported, and surveilled.
This culture war is not simply rhetorical—it’s institutional. It weakens public confidence in higher education, strips protections for vulnerable communities, and drives talent out of teaching and research. It also feeds directly into the robocollege model, which offers a sanitized, uncritical, and commodified version of education to replace the messy, vital work of civic learning and self-reflection.
Today, more than 45 million Americans are trapped in a cycle of student loan debt servitude, collectively owing over $1.7 trillion. Robocolleges have played a central role in inflating this debt by promising career transformation and delivering questionable outcomes.
Debt has become a silent form of social control—disabling an entire generation’s ability to invest, build, or dissent.
Delayed Life Milestones
Psychological Toll
Stalled Economic Mobility
This is not just a personal burden—it is the product of decades of deregulation, privatization, and a bipartisan consensus that treats education as a private good rather than a public right.
Over time, and especially under Trump-aligned officials like Betsy DeVos, the U.S. Department of Education has been hollowed out, repurposed to protect predatory institutions rather than students. Key actions include:
Rolling Back Protections for borrowers defrauded by for-profit colleges.
Weakening Oversight of accreditation and accountability metrics.
Empowering Loan Servicers to act with impunity.
Undermining Public Education in favor of vouchers, charters, and online alternatives.
The result? Robocolleges and their corporate allies are given free rein to exploit. Students are caught in the machinery. And the very institution charged with protecting educational integrity has been turned into a clearinghouse for deregulated profiteering.
This is where we are: in a Digital Dark Age where myths drive markets, and education has become a shell of its democratic promise. But all is not lost.
Resistance lives—in underfunded community colleges, independent media, academic unions, student debt collectives, and grassroots movements that refuse to accept the commodification of learning.
What’s needed now is not another tech “solution” or rebranding campaign. We need a recommitment to education as a public good. That means:
Rebuilding and funding public universities
Protecting academic freedom and DEI efforts
Canceling student debt and regulating private actors
Restoring the Department of Education as a tool for justice
Rethinking accreditation, equity, and access through a democratic lens
Because if we do not act now—if we do not call the Digital Dark Ages by name—we may soon forget what truth, justice, and education ever meant.
If you value this kind of reporting, support independent voices like The Higher Education Inquirer. Share this piece with others fighting to reclaim truth, equity, and public education from the shadows.
When teachers search for help with lesson plans, parents look for answers on school policies, or researchers dig into the roots of America’s education system, many unknowingly rely on a public treasure: ERIC, the Education Resources Information Center. Behind nearly every meaningful Google result about U.S. education lies this carefully curated public database, an open-access archive of more than 2.1 million education documents funded by the U.S. Department of Education.
But this essential public good—free, accessible, nonpartisan—is now on the chopping block.
Unless something changes in the coming days, ERIC will stop being updated after April 23, marking the end of a 60-year-old institution that has helped educators, researchers, and policymakers base decisions on evidence, not ideology. The shutdown is not the result of budget shortfalls or Congressional gridlock. It’s a deliberate act of sabotage by the Trump administration, hiding behind the bland bureaucratic label of “efficiency.”
ERIC has been a mainstay of U.S. education since the 1960s, originally distributed on microfiche and now operating as a seamless, open-access website used by 14 million people each year. Think of it as the education world’s PubMed—a foundational, publicly funded resource that supports millions of decisions in classrooms and boardrooms alike.
The platform is funded through a five-year contract set to run through 2028. But that contract is now functionally dead thanks to DOGE, the so-called Department of Government Efficiency, a newly created unit within the Trump Department of Education. Though Congress authorized the money, DOGE has refused to release it, effectively forcing ERIC into paralysis.
“After 60 years of gathering hard-to-find education literature and sharing it broadly, the website could stop being updated,” said Erin Pollard Young, the longtime Education Department staffer who oversaw ERIC until she was terminated in a mass layoff of more than 1,300 federal education employees in March.
Let’s be clear: this isn’t just about saving a database. This is about obliterating public access to knowledge—especially knowledge that challenges right-wing narratives about education in America.
This is not an isolated incident. The Trump administration’s hostility toward public institutions, academic research, and intellectual labor has been a central feature of its governance. From banning diversity training to rewriting U.S. history standards, this White House has repeatedly attacked education systems that promote nuance, evidence, or inclusion.
ERIC is now the latest victim in a broader war on independent knowledge. It doesn’t just house peer-reviewed journal articles. It archives what’s known as gray literature—unpublished reports, independent studies, and school district evaluations that are often the only public record of how education really works in practice. These materials often tell inconvenient truths: about inequality, segregation, charter school corruption, and failed policies pushed by corporate reformers.
“Big, important RCTs [randomized controlled trials] are in white papers,” said Pollard Young. “Google and AI can’t replicate what ERIC does.”
But gray literature doesn’t fit neatly into Trumpworld’s political project. It can’t be weaponized into culture war talking points. And perhaps that’s why it’s being buried.
Before being fired, Pollard Young was ordered by DOGE to cut ERIC’s budget nearly in half—from $5.5 million to $2.25 million—a demand she tried to meet, despite knowing the consequences. Forty-five percent of journals would have been removed from the indexing pipeline. The help desk would vanish. Pollard Young herself agreed to take over publisher outreach from contractors to keep the program alive.
Her plan was rejected with a single email in all caps: “THIS IS NOT APPROVED.” Then, silence.
“Without constant curation and updating, so much information will be lost,” she warned. And with her termination, ERIC has no federal steward left.
Make no mistake—ERIC is being suffocated, not because it failed, but because it succeeded too well. It made knowledge available to anyone with an internet connection. And for an administration that thrives on disinformation and division, that’s a threat.
Educators, researchers, and school leaders will lose the most. But the real tragedy is what this means for public education as a democratic institution. When vital information disappears or becomes inaccessible, it opens the door to policy based on myth and ideology, not reality.
“Defunding ERIC would limit public access to critical education research, hindering evidence-based practices and informed policy decisions,” said Gladys Cruz, past president of the AASA, The School Superintendents Association.
The Department of Education responded not with a defense of ERIC, but with a political attack on its parent agency, the Institute of Education Sciences (IES). A spokesperson claimed IES has “failed to effectively fulfill its mandate,” echoing the administration’s now-familiar strategy: discredit the institution, defund it, then destroy it.
Pollard Young, who is still technically on administrative leave, has chosen to speak out, risking retaliation from a vindictive administration to warn the public.
“To me, it is important for the field to know that I am doing everything in my power to save ERIC,” she said. “And also for the country to understand what is happening.”
We should listen.
ERIC is more than a database—it’s a record of our educational history, a safeguard against ignorance, and a tool for building a more equitable future. Killing it isn’t just reckless. It’s ideological.
This is what authoritarianism looks like in the 21st century. Not just book bans and curriculum gag orders, but the slow, quiet erasure of public knowledge—done in the name of “efficiency,” while the lights go out on truth.
In a move that has raised eyebrows across Washington and beyond, President Donald Trump recently announced a plan to transfer the U.S. Department of Education’s vast student loan portfolio—totaling a staggering $1.8 trillion—to the Small Business Administration (SBA). This bold step is ostensibly designed to streamline the management of federal student loans, but it is also seen by many as the first move in a larger effort to dismantle the Department of Education entirely, reduce federal oversight, and privatize key aspects of the student loan system. Alongside this plan, there are growing discussions about eliminating essential borrower protections, including programs like Public Service Loan Forgiveness (PSLF), Pay As You Earn (PAYE), Income-Contingent Repayment (ICR), and the Borrower Defense to Repayment program, all of which have offered critical relief to millions of students. Additionally, the rollback of Gainful Employment regulations—which were designed to protect students from predatory for-profit institutions—further signals a shift toward private sector control, which has historically benefited lenders over borrowers.
The Alleged 'Rescue' of the Loan Portfolio
The White House has framed the transfer of the student loan portfolio to the SBA as a necessary step to relieve the Department of Education (ED) of a heavy burden, positioning the SBA as the new “caretaker” of the nation’s student debt. According to President Trump, the SBA—under the leadership of Kelly Loeffler—will now handle the $1.8 trillion student loan portfolio, while the Department of Education focuses on other key educational initiatives.
For some, the move seems like a fresh approach to a problem that has long plagued U.S. higher education: the overwhelming student debt crisis. However, a deeper look into the mechanics of the transfer suggests that this could be the first step toward a far more troubling goal: the dismantling of the federal student loan system and the privatization of debt, a shift that could harm millions of consumers in the process.
The SBA’s Inexperience with Student Loans
The SBA, traditionally tasked with managing small business loans, lacks the expertise to effectively manage the complex structure of federal student loans, which include income-driven repayment plans, loan forgiveness programs, and various protections for struggling borrowers. With the agency also facing significant staffing cuts, it’s highly unlikely that the SBA will be able to competently handle such a vast and complicated portfolio—especially when 40% of these loans are already in default or behind on payments.
This raises an obvious question: is the SBA being set up to fail? Some insiders suggest that the failure of the SBA to properly manage the student loan portfolio could be deliberate—creating a crisis that would justify selling off the portfolio to private companies, thus privatizing the entire system.
The Planned Failure: A Strategy for Privatization?
According to several former senior officials within the Department of Education, the transfer of the student loan portfolio to the SBA could be a calculated move to destabilize the federal loan system. The apparent failure of the SBA to manage the loans would then serve as a justification for transferring the loans to the private sector. This mirrors tactics used in other sectors where privatization was pursued under the guise of government inefficiency. The fear is that this move could ultimately lead to for-profit companies taking over the loan system, with borrowers facing higher interest rates, stricter repayment terms, and the loss of essential protections.
Who Stands to Gain from Privatizing Student Loans?
The shift toward privatizing student loans stands to benefit several key players in the financial and educational sectors, particularly for-profit companies and private lenders who have long pushed for deregulation and profit-driven management of student debt. The primary beneficiaries would include:
Private Lenders and Financial Institutions: Banks, investment firms, and loan servicing companies are the most obvious winners in a privatized student loan system. With the federal government stepping back, these entities would gain control over the $1.8 trillion portfolio, allowing them to set higher interest rates, stricter repayment terms, and impose fees on borrowers. This would turn student loans into even more lucrative financial products for the private sector.
For-Profit Educational Institutions: For-profit colleges, which often rely on student loans to fund their operations, could also stand to gain. These institutions—many of which have faced significant scrutiny for high tuition costs and poor student outcomes—would benefit from a less regulated environment. Without the Gainful Employment regulations, which were designed to hold these institutions accountable for their job placement and earnings data, they would face fewer restrictions on their recruitment practices and financial dealings, potentially allowing them to continue enrolling students in expensive, low-quality programs.
Servicers and Debt Collection Agencies: Loan servicers and debt collection agencies that would likely take over the management of student loans in a privatized system stand to profit greatly. By controlling the servicing of student loans, these companies can increase their fees and aggressively pursue defaulting borrowers, further exacerbating the financial hardship for many students. These entities would benefit from a less regulated environment where the focus would shift toward profitability, often at the expense of borrowers.
Political Donors and Lobbyists: Financial institutions and for-profit education providers have historically been major political donors and lobbyists, particularly to policymakers who have pushed for deregulation of student loan systems. Privatization could provide these stakeholders with the opportunity to consolidate their power over the student loan industry, influencing policy decisions in their favor and ensuring continued access to profits from the student loan market.
A History of Struggles: Lack of Oversight and Privatization Since the 1980s
The idea of privatizing student loans and dismantling federal oversight is not entirely new. In fact, the U.S. student loan system has been struggling for decades due to a lack of oversight and a trend toward privatization dating back to the 1980s. The federal government’s role as a guarantor of student loans—starting with the creation of the Guaranteed Student Loan (GSL) program in the 1960s—was eventually scaled back, leading to a rise in private student loans. As private lenders entered the student loan market, particularly during the 1990s and 2000s, the system became increasingly unregulated, leading to rising debt levels and predatory lending practices.
By the 1980s, the federal government’s reliance on private institutions to handle student loans led to a lack of transparency, accountability, and consumer protections. In particular, private lenders began to offer loans with fewer safeguards, contributing to the explosion of student loan debt and the proliferation of for-profit colleges that preyed on vulnerable students. The government, despite its involvement, increasingly stepped back from actively managing the loan system, leaving students with limited options for relief when they fell into financial distress.
The Consequences of Deregulation: Elite Colleges and the Growing Educated Underclass
One of the most significant byproducts of the shift toward privatization and deregulation in U.S. higher education has been the growth of a growing educated underclass. While elite colleges have continued to thrive, expanding their endowments and increasing their tuition fees, a large segment of the population is left with a degree and overwhelming debt that fails to deliver on its promise. Over the past several decades, prestigious universities have only gotten wealthier, with many now sitting on endowments of billions of dollars. These institutions benefit from the student loan system, which allows students to take on more debt to afford high tuition costs, all while their wealthy alumni networks and expansive endowments only grow larger.
At the same time, a growing number of students from lower-income backgrounds—many of whom attend for-profit or underfunded public colleges—are graduating with significant debt and few prospects for stable, high-paying careers. This has created a growing “educated underclass,” where graduates with degrees struggle to find employment that pays enough to manage their loan repayment, further exacerbating wealth inequality.
The Dangers of Future Issues: AI, Automation, and the Loss of Good Jobs
Looking to the future, the privatization of student loans and the increasing burden of student debt could be exacerbated by emerging technological shifts, particularly in the fields of artificial intelligence (AI) and automation. As industries evolve and more jobs become automated, many middle-class careers traditionally accessible to graduates may disappear or evolve into low-wage, low-security positions. This could lead to an even larger divide between the "haves" and "have-nots" in society, where only those with connections or elite educational backgrounds can secure stable, high-paying employment.
For students entering the workforce with massive student loan debt, this would present a troubling scenario where their ability to repay their loans becomes even more difficult as fewer well-paying jobs are available. This, in turn, would increase the financial strain on future generations of students who are already navigating a rapidly changing job market. For many, student loans could become an insurmountable barrier, keeping them trapped in cycles of debt that are impossible to escape.
Moreover, the increasing reliance on private companies to manage student loans, with their focus on profitability, could exacerbate these issues by offering fewer opportunities for income-driven repayment plans or relief options that account for the economic realities of an AI-powered, automation-driven economy. As the job market continues to shrink and evolve, the need for federal programs to support borrowers through tough economic times will only grow.
The Impact of Eliminating Borrower Protections
The elimination of borrower protections—such as PSLF, PAYE, ICR, and Borrower Defense to Repayment—would significantly worsen the student loan crisis. Public Service Loan Forgiveness, for example, allows individuals working in essential public service careers to receive loan forgiveness after ten years of qualifying payments. Without this program, many public servants would face a lifetime of insurmountable debt. Similarly, income-driven repayment programs allow borrowers to repay loans based on their income, making it easier for those in low-paying fields to manage their debt.
The Borrower Defense to Repayment program provides vital relief to students who were defrauded by their institutions. Without strong enforcement of this program, students may have no recourse to seek relief from predatory schools. The rollback of Gainful Employment regulations could further expose students to the risks of attending for-profit institutions that fail to deliver on their promises.
The Long-Term Fallout: A Dangerous Precedent
The long-term consequences of privatizing student loans could include exacerbating wealth inequality, widening the racial wealth gap, and creating an economic landscape where education debt is a permanent burden on a generation of students. If privatization moves forward, the financial burden of education will likely become a far more persistent and overwhelming problem, especially for those who can least afford it.
What’s particularly concerning is that in past crises, it’s the elites—wealthy colleges, financial institutions, and large corporations—that have consistently received the bulk of government bailouts. The same institutions that contribute the least to solving the country’s educational inequities continue to benefit from taxpayer-funded relief. If privatization moves forward, we cannot allow the same pattern to repeat itself. The majority of relief should go to those most burdened by student debt, not those who already have the means to navigate the system with ease.
The Future of Higher Education Debt: A Call to Protect Federal Loan Programs
At the Higher Education Inquirer, we stand in full support of federal student loan forgiveness and repayment programs, including PSLF, PAYE, and ICR, as they offer essential pathways for borrowers, especially public service workers and low-income individuals. These programs provide vital relief to borrowers, allowing them to focus on their careers without the burden of overwhelming debt. We urge policymakers to protect, enhance, and expand these vital initiatives to ensure that education remains accessible and equitable for all.
As we continue to face challenges in higher education financing, it is crucial to learn from past mistakes and advocate for systems that prioritize the well-being of students, not profit. The proposed privatization of the student loan system threatens to undo decades of progress and burden future generations with lifelong debt. It is essential that we protect these programs and work toward a solution that prioritizes education and fairness over corporate interests.
With the US Department of Education firing 85 of an estimated 95 lawyers in General Counsel, subprime colleges and online program managers will have a field day. According to one industry expert, it could be "like the Wild West," with no oversight over the buying and selling of schools. And that also means that the College Meltdown could get worse even faster than we imagined. The Higher Education Inquirer is already monitoring a number of potential sales, including the University of Phoenix. We are also expecting a number of schools to be insolvent in 2025, leaving students in a lurch, with little or no warning.
“The worst-case scenario is that colleges are involved on both sides of a Second US Civil War between Christian Fundamentalists and neoliberals. Working families will take the largest hit.”
It’s a stark and provocative warning, but one grounded in decades of neoliberal policy, predatory capitalism, and ideological warfare. From our perspective at the Higher Education Inquirer, the College Meltdown is not a future risk—it’s a slow-moving catastrophe already unfolding.
On one side of this looming conflict are Christian fundamentalists who seek to remake public education in their own image: purging curricula of critical perspectives, defunding public universities, and promoting ideological orthodoxy over inquiry.
On the other side are neoliberal technocrats, who have transformed higher education into a marketplace of credentials, debt, and precarious labor. Under their regime, colleges prioritize growth, branding, and profit over education, equity, and labor rights.
Both groups, while ideologically different, are willing to use colleges as instruments of power. In doing so, they turn institutions of higher learning into ideological battlegrounds, undermining their civic purpose.
One of the most visible outcomes of this dysfunction is the rise of the educated underclass. These are people who did what they were told: they went to college, took on debt, and earned degrees. Yet instead of opportunity, they found instability.
“A large proportion of those who have attended colleges have become part of a growing educated underclass,” Shaulis noted in his interview with Stocker.
This includes:
Adjunct instructors working multiple jobs without benefits
Degree holders underemployed in gig work
Students lured into expensive, low-return programs at subprime colleges
These individuals are too educated for social support but too broke for economic stability. They are the byproduct of a system that treats education as a private investment rather than a public good.
At the Higher Education Inquirer, our concept of the College Meltdown describes a long-term decline marked by falling enrollment, rising costs, debt peonage, and declining academic labor conditions:
Enrollment has been falling since 2011, with sharp declines in community colleges and regional publics.
Student debt has exploded, with minimal returns for many graduates.
Academic labor is being deskilled, with "robocolleges" relying on underpaid, non-tenure-track staff or automated instruction.
State funding is shrinking, as aging populations drive up Medicaid costs and crowd out investment in public higher education.
The return of Donald Trump to the presidency in 2025 has further accelerated the higher ed crisis. His administration is now actively contributing to the system’s unraveling:
Trump’s Department of Education is dismantling federal oversight of for-profit colleges, weakening gainful employment protections and allowing discredited institutions back into the federal aid system. This benefits subprime colleges that trap students in cycles of debt.
Trump-aligned state governments and federal agencies are targeting DEI initiatives, restricting academic freedom, and enforcing ideological conformity. Public colleges are increasingly being used to wage cultural wars.
Funding is being diverted from public institutions toward private religious colleges and corporate-friendly training programs. Meanwhile, community colleges and regional universities are being left to die on the vine.
Efforts to reform or forgive student loans have been stalled or reversed. Borrowers are left stranded in opaque systems, while private loans surge in popularity—often with worse terms and even less accountability.
When asked what the next few years could look like, I offered a fork in the road:
Best case: Colleges become transparent, accountable, and aligned with the public good, confronting crises like climate change, inequality, and authoritarianism.
Worst case: Colleges become entrenched ideological battlegrounds, deepening inequality and social fragmentation. The educated underclass grows, and higher education becomes an engine of despair rather than mobility.
The College Meltdown is not a singular event—it is a long-term systemic crisis. Under the combined forces of privatization, political polarization, and demographic stress, U.S. higher education is being hollowed out.
As colleges pick sides in a broader culture war, the public mission of higher education is being sacrificed. The working class and the educated underclass are the casualties of a system that promised prosperity but delivered precarity.
In this volatile moment, the future of American higher education may well mirror the broader American crisis: one defined by deepening divides, fraying institutions, and a desperate need for accountability, justice, and reinvention.
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