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Wednesday, July 12, 2023

University of Phoenix and the Ash Heap of Higher Ed History

 (Updated September 14, 2023)

The University of Phoenix (or at least its name) may soon enter the ash heap of US higher education history--and rise again as a state-run robocollege.  But it shouldn't--at least not yet. Once hailed as the leader in affordable adult education for workers entering middle management, it is a shell of its former self--in an economy less certain for workers and consumers. 

With the school's wreckage are approximately one million people buried alive in an estimated $14B-$35B in student loan debt.  

Pattern of Fraud

As of January 2023, more than 69,000 of these student loan debtors have filed Borrower Defense to Repayment fraud claims with the US Department of Education against the University of Phoenix (UoPX). Many more could file claims when they become aware of their rights to debt relief. In the partial FOIA response below, the US Department of Education reported that 69,180 Borrower Defense claims had been made against the school.

In a recent federal case, Sweet v Cardona, most if not all of the 19,860 "denied" cases were overturned in favor of the student loan debtors.  We estimate the smaller number of fraud claims alone to amount to hundreds of millions of dollars.  

Through a FOIA request, we also discovered 6,265 consumer complaints in the FTC database. In 2019, the FTC and the University of Phoenix settled a claim for $191M for deceptive employment claims.  Based on the consumer complaints, we have no reason to believe that Phoenix has changed its behavior as a bad actor. 

On May 3, 2023, six US Senators (Warren, Brown, Blumenthal, Durbin, Merkley, Hassan) called for the US Department of Education, Department of Veterans Affairs, and Department of Defense to investigate the University of Phoenix for launching a new program suggesting that it was a public university.  The letter stated that the school "has long preyed on veterans, low-income students, and students of color."

Wolves in Sheep's Clothing

University of Phoenix's owners could potentially be liable for refunding the US government for the fraud. But as a state-related organization, it may be more politically difficult to claw back funds, no matter how predatory the school is.  

Purdue University Global and University of Arizona Global set a precedence in state-related organizations acquiring subprime schools (Kaplan University and Ashford University) and rebranding them as something better. Whether they are better for consumers is questionable. Phoenix will have to cut costs, largely by reducing labor. Using Indian labor (like Purdue Global) and AI could be profitable strategies.  It's likely that this deal, even if profitable, will add fuel to the growing skepticism of higher education in the US. 

University of Phoenix's Finances

Apollo Global Management and Vistria Group currently own University of Phoenix but have been trying (unsuccessfully) to unload the subprime college for more than two years. Little is publicly known about the school's finances. What is known is that UoPX gets about $800M every year from the federal government, through federal student loans, Pell Grants, GI Bill funds, and DOD Tuition Assistance.

Despite this government funding, US Department of Education data show the school's equity value for the Arizona segment declined significantly, from $361M in FY 2018 to $187M in FY 2021. 

$347M of the University of Phoenix's $518M in assets are intangible assets. Intangible assets typically include intellectual property and brand reputation. The school has $348M in liabilities.  

The University of Phoenix has been reducing expenses by cutting instructional costs, from $70M in FY 2020 to $60M in FY 2021. UoPX spends about 8 percent of its revenues on instruction.

Marketing and advertising expenses are not available, but Phoenix has been visible on the Discovery Channel's Shark Week, CBS' Big Brother, and other television events. ISpot.tv reports that University of Phoenix spends millions of dollars each year on television ads.  On one ad alone, the ad spend from February 2023 to July 2023 was an estimated $3.5M. 

Attempts to Sell UoPX

There have been two known potential buyers for the University of Phoenix: the University of Arkansas System and the University of Idaho. In both cases, the owners required the potential buyers to keep the deal secret until the sale was imminent.  

Fear of the impending higher education enrollment cliff appears to be an important pitch to potential buyers. 

Arkansas, the first target, was in the process of making the deal, and it might have gone through if nit for the voice of one whistleblower and one outstanding investigative reporter, Debra Hale Shelton of the Arkansas Times.

In the case of Idaho, news of the potential deal was publicly noted just one day before the preliminary agreement was made with the Idaho Board of Education. Two other secret meetings were held before that.  

A number of journalists including Kevin Richert (Idaho EdNews), Laura Guido (The Idaho Press), Troy Oppie (Boise State Public Radio), and Noble Brigham (Idaho Statesman) have exposed some of the problems and potential problems with the deal.  In June, Idaho legislators began questioning the acquisition.  

More recently, the opinion editor at the Idaho Statesman argued that the deal may actually be worthwhile

Particulars about the finances are sketchy at best and misleading at worst.  The University of Phoenix is said to include $200M in cash in the deal, but they have not said how much of that sum is required by law as "restricted cash"--money the school needs if the Department of Education needs to claw back funds.  Phoenix also claims to be highly profitable, but without showing any evidence.  

What is known about the deal is that the University of Idaho will have to borrow $685M and put its (bond) credit rating at risk. The school has not identified important information how the bonds would be sold (underwriters, bond raters, date to maturity, interest rate). 

The University of Idaho has created an FAQ to answer questions about the sale, but HEI has identified a number of misleading statements about University of Phoenix's present finances (failure to report the school's equity), potential liability (cost of tens of thousands of Borrower Defense claims), and leadership (lack of background information about Chris Lynne, the President of the University of Phoenix).  These deficiencies have been reported to the University of Idaho and to the Representative Horman. 

On June 20, Idaho Attorney General Raul Labrador filed a lawsuit to halt, or at least slow down the deal. 

The University of Idaho submitted a Pre-Acquisition Review from the US Department of Education, and it may take up to three months before the application is completed. 

As of September 2023, the deal is far from done.  Since this article was first published there have been a number of developments:

On September 11,  US Senators Elizabeth Warren, Dick Durbin, and Richard Blumenthal called on University of Idaho President Green to abandon the sale.  The Senators also asked Green if he had a plan to pay for the Borrower Defense claims, noting that University of Arizona may be on the hook for thousands of claims against Ashford University (aka University of Arizona Global campus).

In November, the Joint Finance-Appropriations Committee of the Idaho Legislature is expected to discuss the issue again.

*The Higher Education Inquirer has made a FOIA request for more up-to-date numbers from the US Department of Education. We have also filed FOIA requests with the FTC. 


Related link: 

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

The Growth of "RoboColleges" and "Robostudents"

More Transparency About the Student Debt Portfolio Is Needed: Student Debt By Institution

Borrower Defense Claims Surpass 750,000. Consumers Empowered. Subprime Colleges and Programs Threatened.

Friday, January 15, 2021

Chasing Carl Barney: My 7-Year Fight for Student Justice and Corporate Accountability (Debbi Potts)

It was July 16, 2012 and I called a meeting with all of my staff.  I was the campus director of CollegeAmerica in Cheyenne Wyoming; one of the many campuses owned by Carl Barney. I called the meeting to inform my staff that I was resigning that day. I wanted to let them know before I emailed a resignation letter to Barney and the CEO and COO and left the building.  

The Dean of Education (Linda) also resigned that day because of her concerns about the lack of ethics of the company. My exit was abrupt, and my resignation letter called Barney out on the fraud that his organization is infested with. I left without notice and without a job to go to.

I told my staff that there comes a time in most people’s lives where you cannot put your foot over the line and that day had come for me. I could not put my name on one more enrollment agreement or participate in the fleecing of students.  

This is my story of the 7-year chase of Carl Barney as he levied a brutal, retaliatory, and relentless plan to silence me.  

Who is Carl Barney?

Carl Barney is a college owner who has turned his private colleges into money making machines for the benefit of his own wealth. His schools were a toxic blend of substandard education, outrageously high tuition, and poor outcomes that left students deep in debt with little to no skills or hope for a better future. The demographic of most of the students that were solicited to enroll lacked the ability to succeed; but that did not matter.

Why did I leave the company and how bad was it?

I was so excited to be part of changing student’s lives through education and taking the role of the top administrator of my own campus. Career schools are high priced and fast paced and unfortunately this one was not about the education of students; it was about sales and enrolling students and pulling down as much federal aid as you could to line Barney’s pockets.  As time went on it was evident that the company had no regard for oversight of rules or regulations that guide these types of schools; nor had they ever been held accountable for their blatant contempt.

An associate degree was upwards of $40k and a bachelor degree was $78k! The students were solicited through a hard sell of manipulative sales techniques and the education and equipment left much to be desired. The students struggled in 4-week courses where the mid-term was at the beginning of week 3.  The faculty who were mostly all adjuncts and were paid less than $10.00 per hour considering the time they put into lecturing, grading papers and coaching students who needed remedial help before they could even comprehend the course materials.

The company was “enrollment driven” with unrealistic goals every month of starting new students. It is called “greed” at the expense of education. Barney’s motto was “We do as we please and ask for forgiveness later.” Accreditation standards were violated throughout the entire system and the students were the ones who suffered.

An example of disregard for regulations

Barney could not operate his company by merely offering a quality education and focusing on students; he always had to have a scheme to entice and enroll students, even if it were a violation of accreditation. He rolled out a free services program where he decided to offer a free certified nursing course to the general public including all of the books, supplies and certification.  Sounds amazingly generous..right? Not so fast. This particular course was part of the medical assisting program and Barney believed that once he gave away “free” services, those students would enroll in the full program. The problem was that each of those students had a target on their back and they were heavily recruited to enroll into the full program. There were literally waiting lists of hundreds of potential enrollees across all of the campuses. Barney never bothered to get this stand-alone course approved through accreditation. Since this course was vocational in nature we also were required to track student completion and placement; that never happened.

Accrediting Commission of Career Schools and Colleges (ACCSC), the accrediting agency issued a “cease and desist” of these programs, leaving hundreds and hundreds of students hanging and angry and disillusioned. Campus directors were left on their own to try to explain this deplorable situation to our unsuspecting victims.

What happened next?

Linda and I immediately contacted the Wyoming and Colorado Attorneys Generals offices in order to divulge the numerous issues of consumer fraud that we had witnessed. 

I received a personal phone call from Barney a day after my exit. He was definitely on a fishing expedition that was intended to figure out what my plans were moving forward. In that conversation I reported to Barney that the company had owed me $7,000.00 for earned but not paid bonuses. He assured me that he would look into my unpaid bonus. Days went by and I decided to file for lost wages through the Wyoming employment labor board.

On July 21, 2012. I received an email from Barney, and it contained a document entitled “Saying Goodbye” which outlined his theory that you can tell a great deal about the character of people by the way they say goodbye. Additionally, he spewed that he hoped that I had filed a written report within the organization with my concerns about the fraud allegations or I was now a contributor to these allegations of fraud!  

I received my bonus in exchange for signing a contract to not disparage the company.

During the months that followed, I was in direct contact with the Attorneys General. In a LinkedIn communication with a former employee of the organization and I asked him to cooperate with the Attorneys General. The employee turned on me and turned the correspondence into Barney. I was sued for an alleged violation of the contract. I represented myself over a two-year period and wrote 75 legal motions to defend myself.  I filed a charge with the US Equal Employment Opportunity Commission (EEOC) who took a case against them on my behalf. 

It was around that time that I met an attorney from Salt Lake City, Utah who had been enjoined by the US Department of Justice in a qui-tam action with several former employees of Barney’s Utah schools because Barney was illegally paying bonuses to admissions recruiters.

Mr. Bandon Mark, this attorney took my case pro-bono and followed me through depositions and court hearings for several years for the lawsuit, while EEOC pursued Barney in federal court.

The entire purpose of this retaliation by Barney was to punish me and intimidate me into silence…it did not work!  The more relentless he became, the more the fraud became public, he would not agree to settle anything, and neither would I.

In May of 2019, a jury of 6 people in a two-day trial awarded Barney $1.00 (instead of the $7,000.00 bonus he was trying to recoup). This was the least amount the jury could give! 

The Colorado Attorney General’s office testified on my behalf as an optic to show the jury what this malicious lawsuit was really about. As icing on the cake, EEOC forced Barney to never enforce the illegal contract they had issued me. The contract violated public policy by requiring me to not contact any governmental agencies with grievances against Barney or his schools. 

What started out as Barney attempting to make an example out of me for speaking the truth about the fraud in his schools actually opened the doors for me to spend 7 years chasing him.

As a result of this chase, I have been deposed numerous times including a 6-hour videotaped deposition all the while his attorneys spewed venom in my face in an attempt to intimidate me. I was scorned publicly in courtrooms for being a whistleblower…none of that mattered.

Barney’s feeble attempt to stop me from bringing truth forward only made the chase more enticing and his fury caused him to make many mistakes including spending hundreds of thousands of dollars in legal fees against me.  His desire to make me pay only served to make public what he had tried to stop me from saying! 

Fruits of my chase:

At the trial where Barney sued me in May 2019; the courtroom was filled with people who got to hear the fraud that Barney had tried to keep silent by suing me! This is in the community where I reside, and community members are now aware of the fraud.  

On August 21, 2020, a Colorado Court issued a fraud finding against Barney in a lawsuit where the Colorado Attorney General was the plaintiff, and I was the whistleblower.  

I have interviewed with US Department of Justice for an upcoming trial against Barney for illegal bonuses.

I have filed numerous complaints with their accreditor. (ACCSC)

I have interviewed with Veterans Education Success as part of their petition to the VA to cease funding to Barney’s schools.

I have participated in a podcast about my whistleblowing story with Heidi Weber who was responsible for the demise of Globe University with her whistleblowing efforts of their fraud. 

I have personally filed a complaint with the Department of Veterans Affairs, Office of Inspector General (VA-OIG). 

I have interviewed with the Consumer Financial Protection Bureau (CFPB) and provided information regarding their investigation of loan fraud regarding Barney’s schools. 

My story has been covered and publicized by David Halperin in Republic Report. Not just once, but twice

I have also been interviewed by David Halperin in Republic Report

 

Indeed …Barney’s schools are in peril

The following are on-going actions of great consequence:

·       The company is on probation with ACCSC and serious question are pending regarding the ability of Barney’s schools to continue to operate as a result of the Colorado Attorney fraud finding.

·       The Consumer Financial Protection Bureau (CFPB) is awaiting a court decision to move forward to compel documents related to loan fraud.

·       The US Department of Education in tandem with some former employees are in the “discovery stage” of litigation regarding illegal bonuses Barney paid to recruiters.

·       Senator Richard Durbin of Illinois has petitioned the United States Department of Education to look at the possibility of suspending federal funds to Barney’s schools.

·       Due to declining enrollment, the lion’s share of Barney’s brick and mortar schools are closed, leaving only an online school platform which has its own issues with ACCSC. 

I will continue the chase wherever and whenever I can be helpful in fighting the fraud of Carl Barney in order to prevent more students from being harmed.   

Sunday, January 23, 2022

Maximus, Student Loan Debt, and the Poverty Industrial Complex

The Higher Education Inquirer is taking a close look at who's invested in Maximus, the enormous social welfare profiteer. Maximus has been servicing student loan defaulters for years and has now taken over Navient's federal student loan business, branding it Aidvantage

Since 1995, Maximus (MMS) has grown from $50 million in annual revenues to more than $4 billion in 2021. 

Maximus (MMS) Share Price 1995-2022
(Source: Seeking Alpha) 

With an army of more than 35,000 workers, Maximus' clients include 28 US agencies: the Internal Revenue Service, Department of Commerce, National Oceanic and Atmospheric Administration, Bureau of the Census, Patent and Trademark Office, Federal Student Aid, Department of Defense and US Army, Department of Veterans Affairs, Homeland Security, Health and Human Services, Medicare and Medicaid, Department of Labor, Office of Personnel Management, Securities and Exchange Commission and many more. 

As a contractor to Federal Student Aid (FSA), Maximus has more than 13 million student loans to service.  Its four contracts with the US Department of Education total almost $1 Billion.  

While CEO Bruce Caswell made more than $6 million in total compensation last year, Maximus' customer service representatives, the people who have to make the calls to the growing number of student loan defaulters, make less money than workers at Walmart. 

Maximus has recently posted federally contracted jobs on Indeed for $13.15 an hour in Texas and South Carolina, even though the federal minimum wage has been raised to $15 an hour. Wages for Maximus workers in other states are reportedly even lower, as little as $10 an hour in Kentucky and other states with regressive economies.   

Maximus' largest institutional investors include BlackRockVanguard Group, and State Street Corp--three financial behemoths.  BlackRock has $10 trillion in Assets Under Management (AUM), Vanguard Group has about $7 Trillion in Assets Under Management, and State Street has almost $4 Trillion in AUM. 

Bank of New York Mellon, Wells Fargo, and Bank of America each own 900,000 shares or more. 

Public retirement funds, including public school teachers retirement funds (see table below), are directly and indirectly invested in the Poverty Industrial Complex and the student loan mess through Maximus and other large corporations. 


Maximus' strategic partners include AWS, Microsoft, Oracle, and Cisco.  

Social justice advocates have to wonder, how can the student loan system be fixed if the US establishment has a vested interested in the mess?  
 
Maximus (MMS) Top Institutional Investors 



List of Public Funds Directly Invested in Maximus

Alaska Department of Revenue 
California PERS
California State Teachers Retirement System
Colorado PERS
Florida Retirement System
Pennsylvania Public School Retirement System
Teachers Retirement System of Kentucky
Louisiana State Employees Retirement System
Ohio PERS 
New Mexico Educational Retirement Board
New York State Retirement System
New York State Teachers Retirement System
Ontario Teachers Retirement System
Oregon PERS
State of Tennessee Treasury
Teachers Retirement System of Texas
State of Wisconsin Investment Board










Tuesday, August 30, 2022

US Department of Education Projects Increasing Higher Ed Enrollment From 2024-2030. Really? (Dahn Shaulis and Glen McGhee)

The US Department of Education (ED) continues to paint rosy projections about higher education enrollment despite harsh economic and demographic realities--and increasing skepticism about the value of college degrees.  

Image from Digest of Education Statistics (2022) 

Since 2011, higher education enrollment has declined every year--a more than decade long trend. The Covid pandemic of 2020 to 2022 made matters worse with domestic and foreign enrollment-- (temporarily) ameliorated by government bailouts and untested online education.  Foreign enrollment continues to languish. And the enrollment cliff of 2026, a ripple effect of the 2008 Great Recession, is now just around the corner. 

ED is projecting enrollment losses in 2022 and 2023, but why is it projecting enrollment gains from 2024 to 2030?  Apparently, one of the problems is with old and faulty Census projections made during the Trump era that were not corrected.

Based on these Census numbers and other factors, the Department of Education's National Center for Education Statistics (NCES) projects increases in high school graduation numbers.  The Western Interstate Commission for Higher (WICHE), in contrast, projects declines in high school graduates starting about 2025. (see graph below). 



For ED, relying on overly optimistic projections for high school graduates creates a statistical train wreck that's made even worse by what's not in their formula.  

Popular opinion about college has been declining for years, and there is no indication that attitudes will improve.  A growing number of younger folks have joined the "educated underclass," becoming disaffected by underemployment and oppressive student loan debt.  While progressive policies could change attitudes, deep skepticism about the value of education is an important statistical wildcard.

This is not the first time that the Higher Education Inquirer has questioned overly optimistic US Department of Education projections. While NCES has updated projections from time to time, it seems to have relied too much on the past and been too slow to change.  

Related link:  Millennials are the first generation to prove a college degree may not be worth it, and Gen Z may be next (Chloe Berger, Forbes/Yahoo Finance)

Related link: America’s Colleges & Universities Awarded $12.5 Billion In Coronavirus Bailout – Who Can Get It And How Much (Adam Andrzejewski, Forbes)

Related link: Online Postsecondary Education and Labor Productivity (Caroline Hoxby)

Related link: U.S. Universities Face Headwinds In Recruiting International Students (Michael T. Nietzel, Forbes)

Related link: Demographics and the Demand for Higher Education (Nathan Grawe)

Related link Why U.S. Population Growth Is Collapsing (Derek Thompson, The Atlantic)

Related link: Economic Well-Being of U.S. Households in 2021 (Federal Reserve)

Related link: Many US States Have Seen Enrollment Drops of More Than 20 Percent (Glen McGhee and Dahn Shaulis) 

Related link: Community Colleges at the Heart of the College Meltdown

Related link: Projections of Education Statistics to 2028 (NCES)

Related link: US Department of Education Fails to Recognize College Meltdown (2017)

Friday, September 29, 2023

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)

Thursday, October 15, 2020

The College Dream is Over (Gary Roth*)

For the last decade already, access to a college education has been shrinking. This is unprecedented for the United States, in which expanding access has always presupposed that enrollments grow faster than population. This has been true in all but a handful of years ever since annual data were compiled by the U.S. Census Bureau. During the major expansion of higher education during the 1950s and 60s -- when for the first time large numbers of students from working class backgrounds entered the collegiate system, college enrollments outpaced population by a factor of eight. Even as recently as the first decade of this century, enrollments increased four times faster than population growth. The current crisis began in 2010, with enrollments expected to remain flat for another ten years or more, even though the population continues to grow.[i] The college educated will shrink as a portion of the population at large.

If access is declining, so too are the chances for upward mobility. The future has narrowed. Stagnant enrollments put into reverse some of the signature accomplishments upon which the educational community and the nation at large have prided themselves. Two groups in particular have been hit hard. Much attention has been given to the decline in black student enrollment, generally attributable to a rollback of affirmative action policies and a pronounced increase in racist incidents. Less noticed has been the decline in white student participation, which has fallen by a similar percent over the last decade.[ii] For both black people and white people, access is shrinking.

This decline compounds the difficulties which college graduates already face. Since the early 1990s, one-third of the graduates with bachelor’s degrees have found themselves in jobs for which a college education is not necessary.[iii] Here too, upward mobility in terms of the types of work available, compensation, and possible career paths forward has been foreclosed. This in turn produces a ripple effect on everyone without a four-year degree. The underemployed college graduates crowd into employment fields that they had hoped to avoid, which in turn exerts downward pressure on wages across the board. If college attendance was once motivated by the desire to get ahead and improve one’s circumstances, it has increasing become a negative motivation. You go to college in order to avoid the even-more difficult fates that await those with less schooling. 

The dream of education as a lever of social transformation is over. This dream was never fully grounded in reality anyway, but whatever it stood for in the past no longer fits the current situation. Collegiate institutions have become temporary warehouses for the children of the middle and working classes. Graduation dumps them into an economic cul-de-sac in which appropriate jobs are lacking. Student debt makes this situation all the more disturbing. Since the pandemic, even underemployment has begun to look good, so scarce have jobs become. Richard FariƱa’s Been Down So Long It Looks Like Up to Me (1966) takes on a new poignancy. 


[i] Annual enrollment data begins in 1947; U.S. Department of Education, Digest of Education Statistics, Table 303.10 (2019). For population 1790-1930: U.S. Census Bureau, Bicentennial Edition: Historical Statistics of the United States, A 6-7; for population 1940-2020: U.S. Census Bureau, Decennial Censuses.

[ii] Between the peak year of enrollment in 2010 and 2018, black student enrollment declined by 18%, while white student enrollment declined by 19%; U.S. Department of Education, Digest of Education Statistics, Table 306.10 (2019). Also see: Ben Miller, ‘It’s Time to Worry About College Enrollment Declines Among Black Students’, 28 September 2020, https://www.americanprogress.org/issues/education-postsecondary/reports/2020/09/28/490838/time-worry-college-enrollment-declines-among-black-students/; Kevin Carey, ‘A Detailed Look at the Downside of California’s Ban on Affirmative Action’, The New York Times, 21 August 2020, https://www.nytimes.com/2020/08/21/upshot/00up-affirmative-action-california-study.html.

[iii] Federal Reserve Bank of New York, ‘The Labor Market for Recent College Graduates: Underemployment’, 17 July 2020, https://www.newyorkfed.org/research/college-labor-market/college-labor-market_underemployment_rates.html.


*Gary Roth is the author of "The Educated Underclass: Students and the Promise of Social Mobility."