National American University Has No Cash

National American University Holdings (NAUH) of Rapid City, South Dakota has no cash.  The company owns National American University and its subsidiary, Henley-Putnam School of Strategic Security.

According to the company's most recent financial statements:

"As of August 31, 2023, the Company had approximately $0.0 million of unrestricted cash and cash equivalents, a working capital deficit of approximately $4.8 million, and a deficit in stockholders’ equity of approximately $1.8 million." 

NAUH has avoided creditors for years and been able to get US government funds, including more than $2M in COVID relief funds in 2020 and 2021.   

National American University's enrollment in 2015 was 9,519 students. Since then, NAU has closed more than 30 campuses in nine states: Colorado (3), Indiana, Kansas (4), Minnesota (5), Missouri (3), New Mexico (2), Oklahoma, South Carolina, South Dakota (3), and Texas (7), and has become an exclusively online school (apart from a small site at Ellsworth Air Force Base).

According to the US Department of Education's most recently published numbers, National American University has approximately 1100 students. The school has no full-time instructors. There is no indication that those students are prepared for the school to close. 

Related link:

National American University and the Subprime College Crash (2018)

Stressed About Student Debt? Register for a Free Webinar! (NJ Citizen Action)

 

 

Now that student debt repayments are back in full swing, it is more important than ever to learn about the options student loan borrowers have.

 

Thanks to the Student Borrower Protection Center, a FREE webinar is available to learn about your options. Learn about how to take advantage of all opportunities available to federal borrowers and the steps you may need to take to access them. 

 

The webinar will discuss the following topics:

• recent Supreme Court decision on student debt relief and what it means for borrowers,
• programs that can provide debt relief, including the Income-Driven Repayment (IDR) Account Adjustment, Public Service Loan Forgiveness (PSLF), and Fresh Start,
• and what to expect as student loan payments resume.

The webinar is FREE and open to all! Use the link below to register

Register Here!

Barnes & Noble Bookstores and Starbucks on Campus: Things of the Past or New Spaces for Democracy?

There are currently more than 750 Barnes & Noble college bookstores across the US. But today, these bookstores are considered a losing proposition for the Basking Ridge, New Jersey-based company. Shares of BNED have recently dropped below $1 and there don't seem to be any buyers in sight. 

Barnes & Noble college bookstores have done a few things over the years to get students to come in and buy, teaming up with Starbucks and selling overpriced merchandise. And they have been cost cutting.  Wages at Barnes and Noble stores are low and schools rely on college students for much of the work. But coffee and snacks, high prices, low wages and reduced staffing haven't been enough to make the stores profitable. 

The company did have a resurgence during the COVID pandemic (2020-2021) but that was short lived.

The pandemic led to a shift to online learning, which boosted demand for digital textbooks and other educational materials. Barnes and Noble Education was well-positioned to benefit from this trend, as it has a strong digital business.

In December 2020, Barnes and Noble Education secured a $15 million investment from Fanatics and Lids, two sports merchandise retailers. This investment was seen as a vote of confidence in Barnes and Noble Education's business model and its potential for growth.

According to the U.S. Department of Education, Barnes and Noble Education received $40,627,996 in COVID relief funds under the Higher Education Emergency Relief Fund (HEERF) program. The company used these funds to provide financial assistance to students, faculty, and staff, and to cover the costs of responding to the pandemic.

BNED is trying to stay up with the times and also keep their physical presence by offering First Day Complete, bundles of required digital course materials which are supposed to save money for students and schools. But will that be enough to keep the stores open? 

(Barnes & Noble at Camden County College, Camden, New Jersey) 

Glimmer of (Democratic) Hope

In May, workers at the Rutgers University bookstore voted to unionize, joining the Retail, Wholesale and Department Store Union (RWDSU). According to Publisher's Weekly "bookstore unions across the country have gained significant ground."

Students at more than 50 colleges have also called for the expulsion of anti-union Starbucks stores from their campuses. And Starbucks Workers Solidarity has asked community members to boycott Starbucks until their local store has received a contract. 

Starbucks Workers Solidarity has unionized at more than 300 locations, but at a price: the closing of a few stores as a form of corporate retaliation--and to generate fear among workers. Recently, the University of Southern California, known for its neoliberal policies, evicted a small business owner outside USC's Keck Hospital, in favor of a Starbucks.
 

Related link:  

College Meltdown 2.1 (2022) 

College Meltdown 2.0 (2022)

The Collapse of Ambow Education and NewSchool of Architecture and Design

Ambow Education, the principal owner of the New School of Architecture and Design (NSAD) in San Diego has been cited by the New York Stock Exchange as a Non Compliant Issuer and risks imminent delisting from the exchange. The warning was delivered on September 21, but the company has yet to notify its shareholders.

The Higher Education Inquirer reported on Ambow's financial problems in May 2022.  

In January 2023, Ambow Education's other US school, Bay State College, lost its regional accreditation. After losing its appeal with its accreditor NECHE, Bay State College closed its doors in August. NewSchool of Architcture and Design remains open with less than 300 students. NSAD is currently on Heightened Cash Monitoring by the US Department of Education due to ongoing financial problems. 

 

2U-edX crash exposes the latest wave of edugrift

2U, a Lanham, Maryland-based edtech company and parent company edX, is facing layoffs of an estimated 200 to 400 workers--a significant number for a company that only employs a few thousand--amid more rumors that the company is for sale. While the pain of their firings may be consequential for those who are experiencing it, the pain of those the company has damaged, mostly striving middle-class consumers and their families, may be worse.  

2U's problems are not new. The Higher Education Inquirer first reported on the beginning of company's meltdown in October 2019.  In July 2022, 2U announced layoffs as it changed its business model (again) and the US Department of Education scrutinized the company's grad school offerings.

2U began in 2008 as an online program manager (OPM), one of a few companies offering edtech services that required large amounts of capital and labor costs. They expanded through the acquisition of other edtech firms, Trilogy Education Services (2019) and edX (2021).  edX is an education platform that was created by Harvard and MIT as a massive open online course (MOOC) platform, but as part of 2U now concentrates on selling a number of elite and brand name tech bootcamps.

In 2022 and 2023, the Wall Street Journal (Lisa Bannon), Chronicle of Higher Education (Mike Vasquez), and USA Today (Chris Quintana) investigated 2U after a few US senators sounded the alarm about consumers being fleeced by 2U and other OPMs. 

With 2U's reputation in shambles and layoffs ahead, the parent company wrapped itself around the more respectable edX brand. Bjju's, an Indian edtech firm, was said to be looking at 2U or Chegg as a possible acquisition (Byju's is now facing its own problems).  

Concentrating on growth for years, then acquisition, then consolidation and rebranding, 2U has never generated an annual profit--and that trend doesn't appear to be changing. 

Earlier this year we listed 2U, Chegg, Coursera, and Guild Education as part of the EdTech Meltdown. 

Unlike the prior wave of for-profit college failures of Corinthian Colleges, ITT Tech, Education Management Corporation, and others that hurt working-class student debtors, 2U has collaborated with elite universities, targeting mostly middle-class folks for advanced degrees and certificates with elite brand names such as USC and UC Berkeley. Credentials that frequently are not worth the debt. Credentials that often did not lead to better paying jobs. Credentials that burden (and sometimes crush) consumers financially with private loans from Sallie Mae and others.

edX's website advertises coding, data analytics, cybersecurity, and AI bootcamps from a number of name brands: Ohio State University, Columbia University, University of Texas, Harvard University, Michigan State University, University of Denver, Southern Methodist University, University of Minnesota, University of Central Florida, Arizona State University, Northwestern University, Rice University, the University of North Carolina, and UC-Irvine.   

• Ohio State University AI Bootcamp $11,745
  
• University of Texas Coding Bootcamp $12,495
• Berkeley Extension Coding Bootcamp $13,495
• University of Pennsylvania Cybersecurity Bootcamp $13,995
  
• Columbia University Data Analytics Bootcamp $14,745 

It's not clear how well managed the programs are and how much these schools are involved in instruction and career guidance.  However, edX claims that with their bootcamp certificates, graduates will "gain  access to more than 260 employers--including half of the Fortune 100--seeking skilled bootcamp graduates." 

While the targets of for-profit colleges and 2U may have been different, their approaches were similar: sell a dream to consumers that often does not materialize. Spend tens of millions on targeted (and sometimes misleading) advertising and enrollment. Keep the confidence game going as long as it will last. But that may not be much longer.

In April 2023, 2U filed a lawsuit against the US Department of Education to avoid further government oversight. A familiar defensive strategy in the for-profit college business.

There is much we don't know about how significant the damage has been to those who bought the 2U story and spent tens of thousands on elite degrees and certificates, but it must be significant. Most US families do not have that kind of money to spend on something that doesn't result in financial gains.  

Recent reviews of edX on TrustPilot have been scathing. And social media have been brutal on 2U, Trilogy, and EdX. Reddit, for example, has posts like "The dirty truth about edX/Trilogy Boot Camps." In a more recent post about edX, there was a flurry of negative reviews.

In 2016, we wrote "When college choice is a fraud." At that time we were focusing on the tough choices that working-class people have deciding between their local community college or a for-profit career school. Little did we know that the education business was already moving its way up the food chain and that edtech companies like 2U would be engaging in the latest form of edugrift. 

Related link:

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)

"Edugrift" by J.D. Suenram (2020)

When college choice is a fraud (2016)

Art Institutes Close. Students May Be Eligible for Student Loan Forgiveness.

The Art Institutes (Ai) is closing its doors this Friday, September 30. Ai has locations in Miami and Tampa (FL), Atlanta (GA), Austin and Houston (TX), and Virginia Beach (VA). About 2000 students are affected.  The Art Institutes website provides closed school information.

The Art Institutes chain had a storied history, starting in Pittsburgh, Pennsylvania in 1921 and growing to 50 locations by 2010. Its boom was the result of intensive profit-making in the higher education business in the 1990s and early 2000s. Goldman Sachs was a key contributor to its explosive growth.

Ai's decade-long decline was part of a wave of for-profit colleges that faced increased federal scrutiny for low graduation rates, high levels of student loan debt, and declining enrollment. Unlike Corinthian Colleges (2015), ITT Tech (2016), Westwood College (2016), and Virginia College (2018), the Art Institutes survived with government assistance--but with less than ten campuses. 

Art Institute Students 

Students from the Art Institutes may transfer to other schools, but many of their credits may not be accepted by other institutions. Consumers should also be extremely wary of the schools they plan transferring to.  

Students would normally be allowed to have their student loans forgiven through a process called Closed School Discharge. But that avenue for remedy has been paused. Present and former students, however, may be able to have their student loan debt relieved through Borrower Defense to Repayment if they can prove that they were defrauded. 

Borrower Defense-Sweet vs Cardona is a Facebook space for people who have already succeeded in getting their student loan money returned to them and others working on claims. Borrower Defense-Sweet vs Cardona has more than 14,000 members. 

University of Phoenix's Sinking Ship: Who is Chris Lynne?

Who is Chris Lynne, the latest President of the University of Phoenix?  The school has posted a short, glowing biography that provides some information: four years as the CFO of University of Phoenix, former President of HotChalk and former CFO of Northcentral University.  A Wikipedia article was created for him earlier this year but was recently deleted.

People in the edtech industry say they know little about Chris Lynne, at least not publicly. Of three experts who did respond off the record, no one said anything positive. One mentioned problems at HotChalk and another, problems at Northcentral. The third expert claimed to know nothing, despite decades in the business.

Lynne has worked for a number of companies with issues: accounting firm Arthur Andersen (corruption scandal with Enron led to its closing in 2002), Vice-President at Education Management Corporation (predatory enrollment, financial failure) from 2003-2010, CFO at Northcentral University (financial troubles/US Department of Education Heightened Cash Monitoring) from 2010-2014, President at HotChalk (federal violations with Concordia contract), and CFO at the University of Phoenix from 2018-2022. While no one should be found guilty by their associations, this string of questionable employers does not look good.

Information about Chris Lynne from the WayBack machine.

In June 2022, the University of Phoenix made Chris Lynne the interim President of the school, replacing George Burnett. At the helm for less than six months, Burnett resigned amid an inquiry by the US Department of Education about his work at the now defunct Westwood College. Burnett and Lynne worked together several years at Northcentral University, another subprime college. 

Work at the University of Phoenix 

Chris Lynne was Phoenix's CFO beginning in November 2018. Despite almost a billion dollars government funding per year, US Department of Education data show the school's equity for the Arizona segment declined significantly, from $361M in FY 2018 to $187M in FY 2021. No other data after that are available.

In June 2022, Lynne was named the interim President of the University of Phoenix.  Six months later, he was appointed to that position permanently. Little if anything is known about the hiring process that occurred, and who else was considered for the position.

The truth is, without looking at all the books and matching them with expert observations, we have no idea what Chris Lynne has done as the CFO and now President of the University of Phoenix. The numbers we have from the US Department of Education show a school in decline in terms of enrollment and revenues, shored up by closing campuses and reducing instruction costs.  We do not know what the University of Phoenix has done to maintain its infrastructure, including its computer hardware and software. 

If we could take a close look at all the financial records, examine the school's infrastructure, and interview workers, we would know better how Lynne has handled his work at the school and what shape the University of Phoenix is in for the long run as it is sold to the folks in Idaho.

Related articles:

University of Phoenix and the Ash Heap of Higher Ed History

Fraud Claims Against University of Phoenix Continue to Mount

How University of Phoenix Failed. It's a Long Story. But It's Important for the Future of Higher Education. 

New University of Phoenix Head Ran College That Closed After Fraud Suit (David Halperin)

The 17 Questions The Education Dept. Asked A University President Before He Resigned