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Tuesday, May 14, 2024

College Meltdown 3.0 Could Start Earlier (And End Worse) Than Planned

Chronicling the College Meltdown

Since 2016, the Higher Education Inquirer has documented the College Meltdown as a series of demographic and business trends leading to lower enrollments and making higher education of decreasing value to working-class and middle-class folks. This despite the commonly-held belief that college is the only way to improve social mobility.

For more than a dozen years, the College Meltdown has been most visible at for-profit colleges and community colleges, but other non-elite schools and for-profit edtech businesses have also been affected. Some regions, states, and counties have been harder hit than others. Non-elite state universities are becoming increasingly vulnerable.

Elite schools, on the other hand, do not need students for revenues, at least in the short run. They depend more on endowments, donations, real estate, government grants, corporate grants, and other sources of income. Elite schools also have more than enough demand for their product even after receiving bad press.

The perceived value and highly variable real value of higher education has made college less attractive to many working-class consumers and to an increasing number of middle-class consumers--who see it as a risky proposition. Degrees in the humanities and social sciences are becoming a tough sell. Even some STEM degrees may not be valuable for too long. Public opinion about higher education and the value of higher education has been waning and many degrees, especially graduate degrees, have a negative return on investment.

Tuition and room and board costs have skyrocketed. Online learning has become more prominent, despite persistent questions about its educational value.

While college degrees have worked for millions of graduates, student loans have mired millions of other former students, and their families, in long-term debt, doing work in fields they aren't happy with.

Elite degrees for people in the upper class still make sense though, as status symbols and social sorters. And there are some professions that require degrees for inclusion. But those degrees and the lucrative jobs accompanying them disproportionately go to foreigners and immigrants, and their children--a demographic wave that may draw the ire of folks who have lived in the US for generations and who may have not enjoyed the same opportunities.

Starting Sooner and Ending Worse

The latest phase of the College Meltdown was supposed to result from a declining number of high school graduates in 2025, something Nathan Grawe projected from lower birth rates following the 2008-2009 recession.

But problems with the federal government's financial aid system may mean that a significant decline in enrollment at non-elite schools starts this fall instead of 2025.

The College Meltdown may become even worse than planned, in terms of lower enrollment and declining revenues to non-elite schools. Enrollment numbers most assuredly will be worse than Department of Education projections of slow growth until 2030.

In 2023, we wrote about something few others reported on: that community colleges and state universities would feel more financial pressure from by the flip-side of the Baby Boom: the enormous costs of taking care of the elderly which could drain public coffers that subsidize higher education. This was a phenomenon that should also have been anticipated by higher education policy makers, but is still rarely discussed. Suzanne Mettler graphed this out in Degrees of Inequality a decade ago--and the Government Accountability Office noted the huge projected costs in 2002.

Monday, April 20, 2020

Revising Indicators of the College Meltdown during the Panic of 2020

Insiders in higher education and at bond rating agencies know how bad the College Meltdown has become. They have been tracking it for years, and know the most vulnerable schools by name. What indicators do they use, and why aren't the People privy to the information?

In May 2017, I posted the short piece, Charting the College Meltdown. The article included a spreadsheet of key variables that could be used to gauge the direction and intensity of the downturn in US higher education.

Three years ago, revenues were the only variable in the green, and those numbers were from 2015. Clearly, even revenues had been declining earlier at many institutions, especially at for-profit colleges, community colleges, and smaller private schools.

Additional information has been compiled and analyzed since 2017. For example, Gary Roth's "The Educated Underclass" (2019), painted a disturbing picture of US higher education and gainful employment, and the larger economy that had been producing lots of low-wage jobs and fewer good jobs with security. And enrollment data from the National Student Clearinghouse point to a hollowing out of America and significant declines in state enrollments.

Nathan Grawe's analysis of demographic trends also projected a dramatic loss in the college enrollment pipeline in 2026, a ripple effect of the 2008 Great Recession.

One of the problems with even doing an analysis is the lack of data and the quality of data. As part of their plan to deregulate, defund, and privatize higher education, the Trump Administration has discouraged transparency and accountability measures put in place during the Obama Administration.

Student loan defaults, measured by the 3-year student loan default rate, is a poor indictor of problems in the student loan system. Colleges and universities have learned how to game the system, offering deferments to students to keep debtors from defaulting in the three-year window. Student loan repayment rates, a good proxy for long-term defaults, have been eliminated from the College Scorecard.

Variables, like the actual quality of Student Loan Asset-Backed Securities (SLABS) can only be gained through inside information.

The New York Federal Reserve had been a source for the College Meltdown, but recently they appeared to be more like cheerleaders of the industry rather than objective analysts.

In addition, US Department of Education data is released at a plodding pace, often lagging about 2 years. That's why data from the National Student Clearinghouse are so important.

What variables do you think are the most important in gauging the higher education business? And what variables should be added or removed from the chart?

More resources from College Meltdown

Observations of the College Meltdown in Real Time

College Meltdown Resources (includes college choice and career planning tools)

A preliminary list of private colleges at risk

Are Brand Name Coding Bootcamps the New Higher Education Scam?

College Meltdown Expands to Elite Universities

Education is a Racket

Higher Learning Commission: Accreditation Is No Sign Of Quality

The Slow-motion Collapse of America's Largest University

Enrollment declines, campus closings, economic losses and the hollowing out of America

Community Colleges at the Heart of the College Meltdown

What happens when Big 10 grads think "college is bullsh*t"?

US Departments of Education, Defense, and Veterans Affairs Shirk Responsibilities to Servicemembers, Veterans, and Their Families

The College Meltdown Is Painfully Obvious

When College Choice is a Fraud

Music Videos of the College Meltdown

Tuesday, May 2, 2023

Higher Education Inquirer Selected Archive (2016-2023)

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

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

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

Sunday, February 20, 2022

College Meltdown 2.0

College Meltdown 2.0 is distinctly different than the College Meltdown that started in 2010.

The first wave of the College Meltdown (2010-2021) resulted in a slow and steady drop in overall US college enrollment, with dramatic losses among for-profit colleges and community colleges. Corinthian Colleges, ITT Educational Services, and Education Management Corporation were three large for-profit chains to close. Small private liberal arts schools and regional universities also experienced losses. More folks were moving into the growing educated underclass.

Elements of College Meltdown 2.0 include publicly held corporations. Click on the image to see the chart (Source: Seeking Alpha)

College Meltdown 2.0 comes as the Coronavirus becomes more manageable. However US fascism continues to advance, student loan debt is slowly approaching $2 trillion, and the 2026 enrollment cliff is just a few years away. This new wave includes remnants of for-profit colleges like National American University, Stratford University, South University, the Art Institutes, University of Phoenix (owned by Apollo Global Management), Career Education Corporation (aka Perdoceo), and DeVry University (owned by Cogswell Education) as well as national accreditor ACICS.

The largest element of College Meltdown 2.0 is federal student loan debt, which appears to be rising to an unsustainable level--as it hamstrings the lives of millions of families. When mandatory student loan payments resume (scheduled for May 1), long-term default rates may range from 30 and 50 percent. It also appears that at least $500 billion of the Federal Student Aid (FSA) student loan portfolio will be unrecoverable.

College Meltdown 2.0 also involves online program managers (OPMs) that service elite schools (2U), regional universities (Academic Partnerships), and subprime robocolleges (Zovio-University of Arizona Global and Graham Holdings-Kaplan-Purdue University Global).

Student loan servicers and private student loan companies (Maximus, Navient, Sallie Mae, Nelnet), publishers and other edtech enterprises (EducationDynamics, Chegg, Barnes & Noble Education, Coursera, and Guild Education) are implicated or at least entangled in the mess. Higher education accreditors and student loan asset-backed securities (SLABS) are also worth monitoring.

Sunday, October 14, 2018

College Enrollments Continue Decline in Several States

dahneshaulis@gmail.com

[Updated 10-20-2018]

Although the National Student Clearinghouse numbers won't be out until December, a cursory look at news articles over the last month suggests that US higher education enrollment will be down again in 2018-19.

This is not surprising news, given that only a minority of colleges surveyed by Inside Higher Education/Gallup had met their enrollment goals by June.

Thousands of learning sites and campuses have closed over the last seven years, and the trend looks like it will continue. You can track the school closings here.

For-profit colleges continue to downsize, although they aren't reporting numbers. However, many University of Phoenix and Virginia College campuses will be closing. Harrison College campuses closed abruptly leaving thousands of students shunted to other questionable subprime schools, like National American University.

University of Phoenix campuses will be closing in Albuquerque, Atlanta, Chicago, Colorado Springs, Columbia SC, Detroit, El Paso, Honolulu, Philadelphia, Virginia Beach, and several locations in California and Florida.

Community colleges are also expected to lose students for the foreseeable future.
In Illinois, freshman enrollment was down 20% at Western Illinois University and Southern Illinois University at Carbondale.

In New Mexico, enrollment is down 7% at University of New Mexico and 5% at Santa Fe Community College. New Mexico State's enrollment dropped by 1% but the school is facing a $3.3 million shortfall.

In Montana, enrollment at the University of Montana declined 7.6%.

In Hawaii, enrollment as University of Hawaii campuses saw drops at University of Hawaii-Hilo (3.8%), Hawaii Community College (6.6%) and UH-Maui (6.4%).

In Pennsylvania, enrollment was down for the eight consecutive year, a drop of 4%. Indiana University of Pennsylvania experienced a 9% enrollment drop this semester. Cheney University's numbers were down 37%.

In New Jersey, Cumberland County College is merging with Rowan College at Glouchester County after years of enrollment declines.

In Michigan, enrollment is down 1.5% at Western Michigan and Grand Valley State.

In Mississippi, enrollment at universities and community colleges decreased by 1%. The greatest decline was at Jackson State, which saw a 10% decline.

In Missouri, enrollment is down at Crowder College (8%), Missouri Southern State University (2.7%) and Pittsburg State University (4%). University of Missouri increased enrollment significantly after rebranding itself.

In Nebraska, enrollment increased at Creighton, but decreased at all University of Nebraska campuses.

In Arkansas, enrollment is down 1.3%. University of Arkansas at Little Rock had an enrollment drop of about 10%.

In Wisconsin, UW system-wide enrollment was down 2,598 students or 1.5%.

In Kansas, University of Kansas, Kansas State and Pittsburg State all recorded declining enrollment.

Community college numbers in Oregon continue to drop, particularly at Lane Community College, where enrollment is down 11%.

In West Virginia, WVU-Parkersburg reported a 3% drop.

In Ohio, University of Akron's enrollment fell 7%. Enrollment dropped about 3% at Kent State, also with a decline in foreign students.

In North Dakota, the University of North Dakota experienced a 4% loss in enrollment. North Dakota State also had a 4% loss, resulting in an estimated $5M less in revenues.

In Iowa, enrollments dropped at Northern Iowa (5.8%), Iowa (1.6%), and Iowa State (2.8%. Hawkeye Community College had a 6% loss.

In Arizona, enrollments at Maricopa Community Colleges have declined after it was ruled that Dreamers were not eligible for in-state tuition.

Nationwide, enrollment may also be influenced by recent declines in the number of foreign students.

There are some notable rises in enrollment. North Carolina is seeing increases after making tuition affordable with its NC Promise program. Texas and Utah are also likely to see continued gains in college numbers as more people move to their states.

Thursday, December 15, 2016

Forecasting the US College Meltdown

Professionals in higher education may deny that a US College Meltdown is occurring, but that doesn't mean it's not here. Arguably, a few variables related to the phenomenon have improved since the economic downturn of 2008-2009, but that's not a return to a healthy situation. That's why I have written more than two dozen articles on corruption, dysfunction, and financial failures in American higher education to document the many facets of the meltdown.

When I speak of College Meltdown, I am referring to the slow-moving decline of US colleges and affiliated businesses, which includes the following variables: (1) increased student loan debt, (2) decreased gainful employment of those who matriculate, (3) declines in student returns on investment (ROI), (4) increased student loan non-repayments, (5) increased student defaults, (6) reduced college enrollment numbers, (7) declines in entrance standards, (8) reductions in college revenues and endowments at less than elite schools, (9) increased use of debt (bonds) to fund colleges, (10) reductions in instructional staff and instructional pay, particularly with the use of adjuncts, (11) increases in class size, (12) college program closing, (13) reduced student services (14) selling of institutional assets, (15) accreditation downgrades, (16) college consolidations, (17) institutional closings, and (18) reduced values and ratings of student loan asset-backed securities (SLABS) .

Total college revenues and expenses have continued to climb, to $342B and $314B in 2015. But the number of community colleges peaked in 2003-2004. And total enrollment at all postsecondary schools combined peaked in 2010-2011.

These College Meltdown Variables are influenced by a variety of macroeconomic and social variables, including: (1) age demographics, particularly the numbers of college age individuals, (2) family size, (3) family wealth, (4) state and local allocations to higher education, (5) federal allocations to higher education, (6) employment participation, (7) median and quintile personal income of Millennials, (8) K-12 preparedness for college, and (9) immigration numbers.

Professionals have acknowledged certain troubling aspects of the meltdown, especially the student loan debt crisis, but additional components of this problem, which many fail to acknowledge, date back several decades.

Bain Capital ( Denneen & Dretler, 2012) and the New America Fund ( Selingo, et al, 2013) argue that colleges are spending beyond their means, using outmoded teaching methods, becoming less accessible to students and their families, and refusing to be accountable for student graduation and default rates and “gainful employment” numbers.

For me, the question is not whether a meltdown is here, but how quickly it is spreading, which type of schools are most vulnerable and what colleges are in the most immanent danger of failing.

According to Neal McCluskey of the Cato Institute, about 300 colleges closed in 2016. While most were for-profit colleges, many other private and public schools are performing poorly and downsizing.

At first glance, the most vulnerable schools are for-profit colleges, HBCUs, community colleges in cash strapped states, small private liberal arts and Christian colleges, tribal colleges, and public "dropout factories." Low enrollments and downgrades in accreditation are variables that suggest huge problems. But factors such as negative Return on Investment (ROI) should also elicit alarm bells.

In developing predictive models, analysts must consider the dynamic, somewhat unpredictable, and seemingly irrational nature of human behavior. For example, as more working class and middle class people recognize that college is a high risk investment for themselves and their families, a greater number should choose to opt out of school or delay college participation, choose community colleges for the first two years of schooling, or select other majors. But this may not always be the case.

Rational Choice Theory has limitations for understanding college choice. Theories of asymmetrical information, time discounting, and sunken investment, illustrate that people can make sub-optimal decisions about choices even as they gain knowledge.

College administrations can also change their behaviors to survive and thrive in a more competitive environment.

Tuesday, January 15, 2019

College Meltdown Shows Few Signs of Slowing in 2019

The US College Meltdown has been occurring for at least eight years, and there are few signs that it will slow down in 2019.

Image below: Members of student debt group "I Am Ai" protesting fraud by the Art Institutes. (Credit: Ami Schneider)

According to the National Student Clearinghouse, US higher education enrollment was down again in Fall 2018. This marks the eighth consecutive year of losses.
In 2019, the National Center for Education Statistics may have to acknowledge these significant and consistent enrollment declines in their enrollment projections.
While the number of reported campus closings was less than 500 in 2018, significant losses were reported in December, including the sudden closings of Brightwood Colleges and Virginia Colleges. Other significant closures, such as the the 23 Art Institute campuses that were shuttered on December 28th, have not yet been posted on the PEPS monthly school closing lists.
In 2019, the Subprime College Crash will include most of University of Phoenix's remaining campuses as well as campuses of several other low performing schools.
Hundreds of smaller campuses on the verge of failure are likely to close in 2019. For example, National American University is likely to close more than 20 campuses in 2019.
The futures of for-profits DeVry University, Walden University, Ashford University are uncertain.
For-profit colleges and community colleges continue to be hardest hit. But small rural colleges and Historically Black Colleges and Universities (HBCUs) are also struggling. Even second-tier public colleges and universities have been declining in enrollment.
Student loan debt continues to rise. In 2018, there was a significant number of news articles disclosing the negative effects of student loan debt on the lives of Millenials and their families. I have posted several links at College Meltdown.
Student loan servicer Navient continues to promote college for high schoolers who are at higher risk for default and a lifetime of debt peonage.
Long-standing problems like the adjunct crisis and the savage inequalities of the US K-12 pipeline, show few signs of improving.
Private, non-profit colleges' institutional expenses have now surpassed revenues.
The US Department of Education has become more business friendly, providing less transparency for consumers and less accountability from schools, especially subprime colleges.
Recently, Inside Higher Education reported that the USDA was bailing out some rural private colleges. But hundreds of other schools remain in financial peril.
Surveys by Pew, AARP, and others show that public opinion about US Higher education has worsened.

A preliminary list of private colleges at risk

At the risk of being tarred and feathered again by education insiders, I am compiling a list of US colleges that are at financial risk. I am well aware that there are hundreds of schools in trouble, and that this list just touches the surface.

Why should I present a preliminary list? Because presently, students are not privy to college finances at private schools that they plan to attend. And judging from the decision in the Mount Ida case, it appears that courts do not favor transparency and accountability to help consumers.

I've tried unsuccessfully to reverse engineer the proprietary information of Jeff Selingo and EY. So instead, I've cut and pasted the 2017 Forbes list of schools with financial grades of "D" or less. The methodology for the grades is here. Wishing that Matt Schifrin would continue this important work, but in the meantime, this is all I have.

This list does not include subprime schools and it's not in any way related to instructional quality or student outcomes. Many of these schools are not even on the US Department of Education's Heightened Cash Monitoring list.

I also apologize to anyone at a school with the same name as a school on the list.* Three schools on the list, St. Gregory's University, Mount Ida and Green Mountain College, have already closed.

While colleges may appear to be on the verge of financial ruin, there is no telling if the school may be saved by an outside force, such as the US Department of Agriculture.

Adrian College
Alderson Broaddus College (bailed out by USDA)
American International College
Anderson University*
Anna Maria College
Ashland University
Azusa Pacific University
Baptist Bible College and Seminary (Clarks Summit University)
Becker College
Belmont Abbey College
Benedict College
Bethany College (bailed out by USDA)
Bethel College-Mishawaka
Bethel University
Caldwell University
Campbellsville University
Carson-Newman College
Chaminade University of Honolulu
Chestnut Hill College
Colby-Sawyer College
Columbia College
Concordia College-New York
Concordia University-Chicago
Corban University
Dominican College of Blauvelt
Elmira College
Emmanuel College
Evangel University
Faulkner University
Felician University
Franklin Pierce University
Georgetown College
Green Mountain College (closed)
Immaculata University
Judson University
Keuka College
Keystone College
Lake Erie College
Lindsey Wilson College
Livingstone College
Long Island University-Brooklyn Campus
Long Island University-C W Post Campus
Malone University
Marian University
Martin Methodist College
Mary Baldwin College
Marygrove College
Marymount Manhattan College
Marywood University
MidAmerica Nazarene University
Midland University
Mount Ida College (closed)
Mount Olive College
Mount St. Mary’s University
Multnomah University
Newbury College-Brookline
North Carolina Wesleyan College
Notre Dame College
Nyack College
Oglethorpe University
Ohio Dominican University
Olivet Nazarene University
Ottawa University-Ottawa
Pace University-New York
Pacific Lutheran University
Pfeiffer University
Philadelphia Biblical University-Langhorne (Cairn University)
Prescott College
Quincy University
Regis College
Rider University
Rockford College
Rockhurst University
Roger Williams University
Saint Gregorys University (closed)
Saint Joseph's College-New York
Saint Martin's University
Saint Mary-of-the-Woods College
Saint Peter's College
Saint Xavier University
Shorter University
Sierra Nevada College
Spring Arbor University
Spring Hill College
The College of Saint Rose
The Sage Colleges
Tusculum College
Union College*
University of Bridgeport
University of New Haven
Urbana University
Utica College
Westminster College*
Wheeling Jesuit University
Wiley College

*There are two or more schools with this name

Wednesday, April 13, 2022

College Meltdown 2.1

The Higher Education Inquirer has added three companies to its College Meltdown watchlist: Ambow Education (AMBO), SoFi (SOFI), and Adtalem (ATGE).

Leading the way is National American University Holdings (NAUH), which is down to less than $50,000 in cash. Ambow Education (AMBO) and Aspen Group (ASPU) are near penny stock territory and Barnes and Noble Education (BNED) and SoFi (SOFI) are also in deep financial trouble.

Declining share price is not the only factor to make the College Meltdown list. Government contractor Maximus (MMS), for example, is on the list for its predatory behavior with student debtors and its own workers, as well as its questionable contracts with the US Department of Education.

Adtalem makes the list for continuing to put lots of working-class folks (particularly women and people of color) into a lifetime of student loan debt.

2U is identified for its fleecing of its clients (universities), end customers (students) and shareholders. In its last annual report, the company told shareholders that the number one risk was that it may never make a profit.

2U (TWOU) Shares have dropped 70 percent over the last year (Source: Seeking Alpha)

Shares of student loan refinance company SoFi (SOFI) are down 70 percent over the last year

(Source: Seeking Alpha)

Barnes and Noble Education (BNED) shares have dropped 66 percent over the last 6 months.

(Source: Seeking Alpha)

Aspen Group (ASPU) shares have declined 82 percent over the last year.

(Source: Seeking Alpha)

Tuesday, May 14, 2024

Monday, April 20, 2020

Tuesday, May 2, 2023

Sunday, February 20, 2022

Sunday, October 14, 2018

Thursday, December 15, 2016

Tuesday, January 15, 2019

Thursday, May 30, 2019

Wednesday, April 13, 2022