EdTech Meltdown

The Silicon Valley tech downturn has been creating reverberations in other parts of the economy and in other areas of the US.

Edtech, a small subset of the tech industry that overlaps with higher education, is facing major headwinds as skepticism about higher education and the economy grows.  Even two industry insiders, Noodle CEO John Katzman and Kaplan executive Brandon Busteed have been critical of the short-term thinking and questionable outcomes of edtech. Katzman has called some companies in the space "more adtech than edtech," implying that some do little more than marketing and advertising for colleges and universities.     

Ultimately, it's US consumers who are feeling the greatest pain as participants in online education--a mode of instruction that for millions of people may have more risks than benefits--within an increasingly dysfunctional economy that produces expensive education and fewer good jobs.   

Significant problems that were observed in large subprime colleges like University of Phoenix, Corinthian Colleges, ITT Tech, DeVry University, Colorado Tech, and the Art Institutes more than a dozen years ago have resurfaced in edtech.  And other problems unique to edtech have emerged. 

Chegg is an edtech company based in Santa Clara, California, and provides homework help, online tutoring, and other student services.  The company's value grew more than 300 percent in 2020, during the Covid pandemic, but has faced headwinds for the last two years. This includes allegations that  Chegg enables students to cheat on homework and other assignments. Derek Newton has chronicled this problem in the substack The Cheat Sheet.

 

[Chegg shares grew in 2020 during the Covid pandemic. Source: Seeking Alpha] 

 

Coursera is a publicly traded MOOC based in Mountain View California.  Shares started trading in April 2021.  The company has under-performed as a profit making enterprise. Massive Open Online Courses were once seen as a wave of the future in adult education but their popularity has waned. 

 

[Coursera has underperformed since its IPO in April 2021.  Source: Seeking Alpha]

2U (based in Lanham, MD) and Guild Education (based in Denver) and are two edtech companies based outside of Silicon Valley. 

2U is a publicly traded Online Program Manager (OPM).  The company services major universities such as the University of Southern California and University of North Carolina with support for some of their online degree programs. 2U has received an enormous amount of funding from Cathie Wood, a major Silicon Valley investor, and has continued to receive support despite a long record of financial losses.  

Some 2U investors have grown tired of persistent losses--and it has shown in the declining share price. The company also faces increased scrutiny in DC for recruiting consumers unable to recoup the cost of education for high-priced masters degrees in areas such as social work.  2U acquired edX, the Harvard-MIT MOOC in 2021 and its profitability remains to be seen.  

In 2023, 2U sued the US Department of Education for attempting to require more transparency between OPMs and their clients.  This strategy is similar to the defensive strategy that subprime colleges have used to stop gainful employment regulations, and more recently, borrower defense to repayment rules.  

 

 [2U shares have dropped more than 90 percent over the last 5 years. Source: Seeking Alpha]

Guild Education is a privately held corporation that grew to an estimated $4.4B evaluation in a few years. Guild serves businesses by administering online education benefits for large corporations such as Walmart, Target, and Macy's.  While its work may help companies with their bottom line, they appear to do little for their workers. 

At least ten of Guild's investors are based in Silicon Valley, including Silicon Valley Bank and venture capital firms in San Francisco, Palo Alto, and Menlo Park, California. Valuations.fyi reports Guild's estimated value at $1.3B, a 70 percent drop from its peak in June 2022. 

 

[Image above: Guild's valuation in Billions from valuations.fyi]

 

The Higher Education Inquirer will continue to observe changes in edtech as the College Meltdown advances.  

A ‘rigged’ economy and skepticism about college (Paul Fain, Open Campus)

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

The Cheat Sheet (Derek Newton)

2U Virus Expands College Meltdown to Elite Universities 

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

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

Guild Education: Enablers of Anti-Union Corporations and Subprime College Programs 

College Meltdown 2.0 

The Growth of "RoboColleges" and "Robostudents"

The American Dream is Over (Gary Roth) 

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)

"White Labeling" in Online Higher Education: Simplilearn

Yesterday the NY Times published an article titled "Students Paid Thousands for a Caltech Boot Camp. Caltech Didn’t Teach It." The scandal is likely larger than this NYT article and the small, but important, bits of information in it. Simplilearn, the edtech company involved in the scheme, but not named in the title, is a growing for-profit business with offices in Bengaluru, India and San Francisco. 

What makes the story interesting for consumers and consumer advocates is that like 2U-edX, we find another online program manager, Simplilearn, peddling elite university certificates that may not work out for those seeking better work opportunities. What makes the story doubly interesting is that Blackstone, a company with a trillion dollars in assets under management, holds a controlling interest in Simplilearn. 

What makes it triply interesting (and not noted by the NY Times) is that GSV Ventures has also been involved in Simplilearn.  GSV Ventures includes a number of high-profile names in education, business, and edtech, including Arne Duncan, Johny C. Taylor, Jr., Michael Moe, and Michael Horn.  

Simplilearn also markets online certificates with other elite, brand names, including Purdue University, University of Massachusetts, Brown University, and UC San Diego. In June, Simplilearn stated that it was growing dramatically in revenue (35-45%) and becoming profitable. Consumers on Reddit, however, have made critical remarks about Simplilearn bootcamps. 

Students can use Splitit, ClimbCredit or Klarna for buy now, pay later financing. 

"White Labeling" in Edtech

According to edtech innovator and pioneer John Katzman (Noodle), "White labeling is done everywhere; your GE microwave is not made by GE, and Walgreens doesn't make ibuprofen. And note that these are non-credit, non-accredited programs. Still, I wouldn't put my university's name on other peoples' programs without clear disclosure. Tech and marketing are one thing; teaching and academic advisement are at the core of what a university does."

HEI Values Your Feedback

If there is anyone who has attended one of these bootcamps, please let us know how you financed the program and whether it has resulted in a positive or negative return on investment.

Related links:
Edtech Meltdown

2U Collapse Puts Sallie Mae and SLABS Back on the Radar (Glen McGhee)
OPM Market Landscape And Dynamics: Spring 2023 Updates (Phil Hill)
2U Expands College Meltdown to Elite Universities

OPM Market Landscape And Dynamics: Spring 2023 Updates (Phil Hill)

Editor's Note:  This article first appeared in Phil Hill's On EdTech Blog. 

Wow. Just wow – the last twelve months have been something.

Was this forwarded to you by a friend? Sign up, and get your own copy of the news that mattered sent to your inbox every week. Sign up for the On EdTech newsletter. Interested in additional analysis? It’s free through May 24, 2023. Upgrade to the On EdTech+ newsletter.

On to the update. [full-page audio link]

---

During several keynotes, podcast interviews, and panel sessions over the past two years, I have described how the Online Program Management (OPM) market was facing enormous pressures and would change dramatically. I took some heat in private conversations for overstating the case, but as the past 12 months have shown, it turns out that I understated the turmoil and change of the market.

With that in mind, it is time to update our two main OPM Market graphics that were last shared in the Summer 2022 update.

OPM Market Landscape

• Market valuations of publicly-traded OPM companies have continued to drop, with 2U/edX, Coursera, and Keypath all down 75% or more from March 2021.

• Pearson tapped out of the market, agreeing to sell its OPM business to private equity firm Regent.

• Zovio is no more. It has ceased to be.

• FutureLearn sold the remnants of its business to a for-profit system, and it now has the most obnoxious website of any OPM provider, past or present.

• Byju’s, which (according to multiple media accounts) had been considering an acquisition of 2U/edX or Coursera, abandoned these plans to go off and deal with its own financial crisis.

• Noodle acquired South Africa-based Hubble Studios.

• The Government Accountability Office (GAO) released a report on the OPM market, triggering (but not causing) official efforts to make massive regulatory changes.

As readers of On EdTech know, this last bullet is now the driver for market dynamics for 2023 and probably 2024.

As always, please note that this view is intended to give a visual overview of the market landscape and is not mean to be comprehensive in terms of vendors represented. This is particularly true in the smaller customer base and fee for service categories.

OPM Market Dynamics

When we first came up with the Mad Max graphic in 2018, it was intended to counter the golly gee, the OPM market is rich, well-funded, and growing like crazy coverage, or the flip side of these companies are all getting rich pulling profits out of the schools coverage that we saw in EdTech and national media through 2022.

This year there are two primary changes with the overall message of the graphic:

• Online enrollments in the largest OPM market (US graduate schools) are no longer growing – they’re dropping and in structural ways. OPMs are still chasing those enrollments and tuition revenue, but the dynamics change when the target has its own problems.

• The small threat from the Department of Education and its activist allies to the OPM market has become a major threat, with an all-out assault.

We still get a picture of a chaotic market that is not for the faint of heart, and one that is seeing consolidations and category changes, and these changes will continue. All of this in a Mad Max-style pursuit of college online course and program revenue (whether rev share or fee-for-service or a blend, and whether degree- or certificate-based).

Note the changes in the program revenue target:

as well as the central market threat from ED regulations, going after both revenue sharing and TPS status, all in the name of protecting the helpless:

with 2U being the chosen target to personify the regulatory actions:

We also see Pearson getting out of the OPM business:

Zovio’s crash:

and Byju’s flying away from the scene.

ASU+GSV Angle

Next week I (along with Glenda Morgan) will be at ASU+GSV, and I will be on a panel with Ryan Craig, Mike Goldstein, Katherine Lee Carey, and Toby Jackson. The session is titled “Decoding the Dear Colleague Letter – What’s a TPS?!”, scheduled for Wednesday at 11am PDT. I am eager to find out at the conference if the investment community is aware of the significance of ED’s targeting of the OPM market, at least for revenue sharing business models, and of the potential impact of TPS guidance.

Update 4/13: Added bullet on Noodle acquiring Hubble Studios.

Ambow's HybriU. Is any of this real?

Ambow Education is at it again, pumping up its stock with another edtech business deal. This time, they sent out a press release that a Singapore company called Inspiring Futures has reached a $1.3M deal for licensing Ambow's 3D learning platform HybriU. Shares of AMBO soared more than 200 percent on the news. In April, Ambow appeared at the ASU+GSV conference to pitch its latest technology. 

 

The Ambow Sales Pitch for HybriU 

"HybriU is currently the only available 5-in-1 total solution. It seamlessly integrates AI—empowering five key domains: teaching, learning, connectivity, recording, and management—along with lecture capture, immersive technology, and a comprehensive management platform designed specifically for the education sector. HybriU delivers a unified learning experience that transcends the boundaries of both online and offline education, bridges language and regional divides, and connects academia with industry."

"HybriU's cutting-edge 3D solution includes 3D signal capture, recording, transformation, and remote display capabilities. It supports broadcasting life-sized 3D projections of professors in remote classrooms via a 3D LED wall, enabling a highly immersive learning experience. Learners can engage in their native language while interacting with the 3D content, making the platform accessible and effective across diverse linguistic and regional boundaries."

But is any of this technology real? We know of no schools currently using HybriU.  And there are no video presentations available online. We have reached out to experts in edtech to evaluate Ambow's claims for the technology and will provide a follow up when we learn more. 

Inspiring Futures? 

Inspiring Futures, the Singapore company that made the deal with Ambow for licensing HibriU, was created four months ago and employs three people. Its headquarters is in an outlet mall. 

Ambow also operates out of a small space in Cupertino, California, after its move from the People's Republic of China. Ambow still owns and operates NewSchool, a real college in San Diego, California, that has been declining in enrollment.    

Guild (Education) No Longer Glitters: Layoffs, Toxic Work Environment, Questionable Acquisition

Here's our latest analysis of Guild (formerly Guild Education) based on a limited amount of publicly available data. Guild is a third-party provider of adult education, connecting big corporations like Walmart, JP Morgan, Tesla, and Disney with online schools like Purdue University Global (Purdue University's robocollege) and e-Cornell (Cornell's online school). 

For years, Guild Education received a substantial amount of positive press, which put them on our radar in 2021. We and others in the education world were wary of all the hype. Forbes was a big contributor to Guild's rise, along with its supporters: Silicon Valley Bank, ASU+GSV, Steph Curry, Oprah,  Johny C. Taylor Jr., Michael Horn, and Kenneth Chenault. And Guild had political ties with Mae Podesta, a daughter of Democratic Party powerbroker John Podesta.

In 2023, Guild was again on the radar as the edtech meltdown was occurring and investor money was drying up, especially in Silicon Valley.

Since Guild is a private, for-profit company, this limits our ability to fully assess the company, including its value. It appears Guild has not received a capital infusion since the summer of 2022, and there is no indication that it has ever been profitable. Valuations.fyi reports that Guild's value has dropped from a peak of $4.4B in 2022 to $1.3B in 2024.

The last two years Guild has suffered significant layoffs, and its charismatic CEO Rachel Romer, who suffered a stroke, was replaced by a less popular Bijal Shah (who only has a 37 percent favorability rating on Glassdoor). The edtech company has gone through major transitions, including a rebranding, while downsizing its core business. In early 2024, Guild announced that it was offering AI training. More recently, it has acquired Nomadic Learning, a platform for educating corporate leadership.

Glassdoor reviews have provided more information that are summarized here:

1. Toxic Work Environment/Hostile leadership: The behavior of senior leadership, particularly the CMO, is described as hostile, manipulative, and discriminatory. 

Lack of empathy: A lack of empathy from leadership towards employees is a recurring theme.

Discrimination: Instances of discrimination, both overt and subtle, are alleged, especially against women and employees of color.
 

2. Unfair Treatment and Inequity/Favoritism: Friends of leadership seem to be favored, regardless of merit or performance.

Unequal treatment: Women and employees of color appear to be disproportionately affected by negative actions, such as layoffs and discrimination.

Limited opportunities for advancement: The focus on "allies" in ERG spaces may limit opportunities for marginalized employees.
 

3. Erosion of Employee Benefits/Reduced holiday time: The removal of holiday time off and restrictions on PTO use have negatively impacted employees' ability to balance work and personal life.

Decreased support for employees: The company's focus on reducing costs has led to a decline in benefits and support for employees.
 

4. Misalignment with Mission/Prioritizing profits over people: The company's actions seem to prioritize financial gain over its stated mission of unlocking opportunity.

Disregard for employee needs: The company's failure to address the needs of its employees, particularly women and caregivers, contradicts its mission.
 

5. Loss of Talent/High turnover: The toxic work environment and declining benefits are likely contributing to a high turnover rate among talented employees.

Loss of marketing talent: The company's reputation is suffering due to the loss of its best marketing talent.

These issues raise serious concerns about Guild Education's culture, leadership, and commitment to its employees and mission. Addressing these problems will be crucial for the company's long-term success.

Why Acquire Nomadic Learning?

There could be several reasons why a company with a toxic work environment and declining employee morale would continue to acquire other businesses:

Diversification: Acquisitions can be seen as a way to diversify the company's revenue streams and reduce its reliance on a single product or service.

Market expansion: Acquiring other companies can help a company expand into new markets or geographic regions.

Synergies: The acquisition of complementary businesses can create synergies that lead to cost savings or increased revenue.

Talent acquisition: Acquisitions can be a way to acquire talented employees or intellectual property.

Short-term financial gains: Acquisitions can sometimes provide short-term financial gains, such as increased revenue or stock price appreciation.

However, it's important to note that these reasons may not be sufficient to justify the acquisition of other businesses if the company's internal problems are not addressed. A toxic work environment and declining employee morale can negatively impact a company's ability to retain talent, attract customers, and innovate.

It's possible that the company's leadership believes that acquisitions can help to mask or distract from the underlying problems. However, this is a short-term solution that is unlikely to be sustainable in the long run.

To truly improve its situation, Guild Education will need to address the root causes of its problems, including the toxic work environment, declining employee morale, and misalignment with its mission.

2U Declares Chapter 11 Bankruptcy. Will Anyone Else Name All The Elite Universities That Were Complicit?

2U declared Chapter 11 bankruptcy today and the company is now valued at less than $5M. That's a small shadow of the $5.4B perceived value it had in mid-2018.

As a company that will be owned and operated by vulture capitalists (VCs), 2U (TWOU) and its subsidiary edX will fall below the radar. But that won't stop the company from ensnaring more students for overpriced "elite" and "brand name" degrees and certificates--as it tries to survive. In fact, it might make it easier. The visible economic market and its media won't care anymore. 

According to Higher Education Dive, backers of the latest scheme include three vulture capital firms: Mudrick Capital Management (Madison Avenue in NYC), Greenvale Capital (London) and Bayside Capital (Miami/London). 

Somehow, these VC firms will try to extract value from the bankruptcy deal. But how they do that is a mystery. C-suite executives have already gotten some of their bonuses, leaving little else for workers. Reducing labor costs (firing people) will be essential. Not paying their bills is another. Continuing to deceive consumers would be difficult to change. Even after the deal, 2U will still be laden with more than $400M in debt.

Since 2019, we have tried to expose 2U and its business practices, as well as the role of elite university partners in enabling the sale of advanced degrees and edtech certificates that led to few good jobs and lots of consumer debt.  When they acquired edX from Harvard and MIT for $800M, we doubled down.

The Higher Education Inquirer has been the only outlet to name the elite schools that were complicit in this scheme that took money away from consumers just trying to get ahead. Not just USC, but Harvard and MIT, and Yale, and Cal Berkeley, and the University of North Carolina, and Syracuse, and Pepperdine, and many others. Check out the links below to learn more about how this higher ed scheme developed and collapsed. And how this is just the latest wave of edugrift. 

 

Related links:

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

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

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

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

College Meltdown 2.1 (2022)

EdTech Meltdown (2023)  

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

Guild Education: Enablers of Anti-Union Corporations and Subprime College Programs

According to the Harvard Business School, "Guild Education is an education marketplace that connects employers and universities to provide employees with “education as a benefit.” Guild's employer clients include Walmart, Lowe's, Chipotle Mexican Grill, Taco Bell, Disney and Discover Financial. Its education partners include Penn Foster High School, eCornell (part of Cornell University), CSU Global, Purdue University Global (formerly Kaplan University), University of Denver University College, UF Online (part of University of Florida), Johnson and Wales University Online, Brandman University, Bellevue University, and Ancora Education. A majority of Guild's students are working class people of color. The company has been featured in Bloomberg, Forbes, CNBC, the Wall Street Journal, and Inside Higher Education.

History 

(2015) Guild Education founded by Rachel Romer Carlson and Brittany Stich, two Stanford graduates.
(2016) Guild Education raised $8.5 million in Series A funding. They also received an EQUIP grant from the US Department of Education "to provide low-income students with access to new models of education and training." 
(2017) Guild Education raised $20 million dollars in Series B funding. Guild Education teamed up with Lyft to offer programs to its drivers, making Lyft the "First Gig-Economy Company to Provide Access To Education Services to Contractors." Guild also worked with the Denver Public Schools system to help paraprofessionals, most of whom are people of color, become teachers. CEO Rachel Romer Carlson named to the Forbes 30 Under 30 list. 
(2018) Guild Education raised $40 million dollars in Series C funding. Felicis Ventures was a major investor. 
(2019) Guild Education valued at more than a billion dollars, a rare feat for a company founded by women. Guild Education raised $157 million in Series D funding. Investors included General Catalyst, Emerson Collective, Iconiq Capital and Lead Edge Capital. Ken Chenault joined Guild’s Board of Directors. NBA basketball star Stephen Curry also announced that he had invested in Guild Education.
(2020) Guild Education acquired edtech venture consultancy Entangled Group. CEO Rachel Romer Carlson was named a finalist for the EY Entrepreneur of the Year. 
(2021) Guild Education teamed up with online program manager 2U to connect employees with 500 bootcamp programs covering 30 disciplines and with Google to offer Google Career Certificates. It also added Ancora Corporate Training to its group of educational providers. 

Education Assistance Programs

Education assistance programs are used by many large businesses to recruit, retain, and retrain employees and to increase goodwill with former employees and the public. Corporations with these programs, include Walmart (Live Better U), Amazon (Career Choice), McDonald's (Archways to Opportunity) and Kroger (Feed Your Future). According to Wharton College professor Peter Cappelli, only a small percentage of workers actually use these benefits. 

Policy scholar Kelia Washington states that programs like those at Starbucks, Walmart, and Amazon "are limited in their ability to meaningfully increase college access and completion, and, at worst, they can create additional barriers for employees seeking to obtain high-quality, meaningful credentials." She added that "despite what may be advertised, corporate education assistance programs do not meaningfully relieve financial constraints facing employees interested in pursuing a college degree. These programs in fact limit the college and career choices for some of their employees."

Are Unicorns Real? 

Guild Education has gotten a lot of positive press as an innovative company doing good work. But what do we know about its operations? We know several of its high-profile clients (e.g. Walmart, Chipotle Mexican Grill, Taco Bell, The Walt Disney Company, Discover Financial Services, 5 Guys Inc) and educational providers (Penn Foster, University of Arizona Global Campus, Purdue University Global, University of Florida). The edtech startup is said to be valued at $1 Billion + (a unicorn), with annual revenues of $100 Million+. Paul Freedman has stated that Guild could become a $100 Billion company. But how about the real balance sheet? 

Bright Horizons is the company's largest competitor. Bright Horizons is publicly traded (BFAM) and has worked with more than 200 companies, including Home Depot and Goldman Sachs. Instride works with Arizona State University, Starbucks, and Uber. 

While University of Phoenix and EducationDynamics represent the old guard in for-profit education, Guild Education brings the "business model" of higher ed into the 2020s, connecting anti-union companies, low wage labor, and the new "lower ed," producing what appears to be little more than hype.

Leadership and Board Members

Rachel Romer Carlson is the CEO of Guild Education and the grand daughter of former Colorado Governor Roy Romer.  Her father Chris Romer is a lesser known politician who has worked in the oil and gas industry and charter schools.  Natalie McCollough is president and Chief Commercial Officer, Jessica Rusin is Chief Technology Officer, and Suzanne Stoller is the Chief People Officer.  Mae Podesta, VP of Finance and Strategy, is the daughter of DC power broker John Podesta. 

Guild's Board of Directors includes American business executive Kenneth Chenault, Google product innovator Wesley Chan, and Johnny C. Taylor Jr., President and CEO of the Society for Human Resource Management (SHRM). Lisa Sherman, President and CEO of the Ad Council is a board advisor. Michael Horn, co-founder of the Clayton Christensen Institute for Disruptive Innovation, is a senior strategist. Other board members include Annie Kadavy of Redpoint Ventures and Byron Deeter of Bessemer Venture Partners.  

Current Partners

Walmart's program is called Live Better U. Associates have the opportunity to earn a college degree "for just $1 a day." Partners include Penn Foster High School, Southern New Hampshire University, Purdue University Global, University of Florida, Bellevue University, and eCornell. Penn Foster provides online courses in facilities maintenance, industrial maintenance, HVAC/refrigeration, electrical, plumbing and construction. 

Disney's Aspire program partners include Purdue University Global, Southern New Hampshire University, University of Arizona online, University of Central Florida, Valencia College, Brandman University, University of Florida Online, University of Denver University College, Wilmington University and Bellevue University. In 2019, Disney reported "that they had invested $150 million in the Aspire free education program for 90,000 of the company’s cast members." 

Chipotle's program partners with Bellevue University. Wilmington University, Southern New Hampshire University, Brandman University, and Purdue University Global.

Lowes' program partners are Penn Foster High School, Brandman University, Colorado State University School of Business, Wilmington University, and Bellevue University.

Taco Bell's program partners with Brandman University, Johnson and Wales University online, Pathstream, University of Denver, and Wilmington University.

Discover Financial Services' program partners include University of Denver University College, Brandman University, Wilmington University, Bellevue University, and University of Florida Online.

Five Guys' program partners include Penn Foster High School, Brandman University, Southern New Hampshire University, Wilmington University, and Bellevue University.

Education Partners

Ancora Education is a for-profit educator focusing on vocational and technical programs.
Bellevue University is a private university based in Nebraska.
Brandman University is part of the Chapman University system.
eCornell is part of Cornell University, an elite private university.
Pathstream is a "web-based platform for teaching in-demand tech skills for work."
Penn Foster High School is a for-profit online high school owned by Bain Capital.
Purdue University Global, formerly known as Kaplan University, is a part of the Purdue University system.
Southern New Hampshire University is a large non-profit university.
University of Denver University College is a private university.
UF Online is part of the University of Florida state system.
Wilmington University is a private non-profit university based in Delaware.

Competitors

Bright Horizons is the company's largest competitor. Bright Horizons is publicly traded (BFAM) and has worked with more than 200 companies, including Home Depot and Goldman Sachs. Instride works with Arizona State University, Starbucks, and Uber.

Humans Don't (Really) Matter

According to the company, from 2015 to 2019, 400,000 working adults used Guild Education to explore their paths back to school. Guild states that there is a 208 percent return on investment for every one dollar spent on education and that the 90-day retention rate for employees enrolled in Guild is 98 percent versus a 71 percent baseline employee retention rate. In 2018, according to Guild, the Lumina Foundation "agreed to research and measure the impact and effectiveness of the program and will work with the Walmart team to share findings." In 2021, Guild also claims to have "helped working learners avoid more than $363 million in student debt." 

According to the Chronicle of Higher Education, "about 15,000 of 950,000 eligible employees use the $1-a-day tuition benefit." That's only about two percent of Walmart's workforce.  In a piece for EducationDive, CEO Rachel Romer Carlson said about 3 to 5 percent of workers in the Guild programs use the benefits.  

With their other clients, is Guild providing educational services to more than two percent of the eligible workers? And how many workers are completing programs?  From this analysis, and the intentional lack of data, it would appear Guild Education for the most part is acting as an anti-union shill, for corporate PR, gathering personal data, upskilling a few workers, and creating lots of goodwill for Walmart and others.  It's possibly a profitable strategy in a world of growing automation and widening inequality, where working people have little to do with the calculus. 

  

2U Collapse Puts Sallie Mae and SLABS Back on the Radar (Glen McGhee)

The collapse of 2U and its subsidiary edX has put Sallie Mae (SLM) on the radar.  Many of those elite brand certificate programs (under the name Harvard, MIT, Cal Berkeley) were propped up by Sallie Mae private student loans. 

When the adult learners who took these certificate courses from edX did not get better jobs that they were promised, some ended up struggling to pay their loans. Some have defaulted on their loans. And a ripple occurs.  As part of a larger edtech meltdown, and with IT jobs being lost each month, the situation promises to get worse.

As a hedge for SLM, most of these loans are processed into Student Loan Asset-Backed Securities (SLABS) and sold off as assets. Large investors, including pension programs are invested directly or indirectly in this mess.

Sallie Mae Boom and Bust 

Sallie Mae (SLM) is a private lender that has had a number of problems.  Despite being bailed out by the US government and spinning off part of itself, SLM has a poor credit rating that's bad and getting worse. 

In 1972, the Nixon administration created the Student Loan Marketing Association, or “Sallie Mae” — a government-sponsored enterprise empowered by the government to use U.S. Treasury money to buy government-backed student loans from banks. 

As a publicly traded corporation Sallie Mae has benefited from decades of close government connections.

SLM was very profitable (and very predatory to consumers) when there was little oversight, and the US economy was booming. But when the Great Recession hit in 2008, SLM had to be bailed out when the US government purchased billions of dollars in government-backed student loans. After that bailout, Sallie Mae returned to maximizing profitability.  Over the last 5 years, SLM shares have gained 144 percent in value as student borrowers have suffered.   

While the economy is doing well enough for the middle class, that could change for the worse, not just for consumers, but also Sallie Mae. 

Recent Troubles, Troubles Ahead

In July 2024, Moody's changed its outlook on SLM's long-term from stable to negative, The bond ratings were already less than stellar, a Ba1 for senior unsecured notes. Ratings for some of its Student Loan Asset-Backed Securities were downgraded in 2022. 

Help for Student Debtors

For student loan debtors, we recommend joining the Debt Collective and contacting other advocates, including the Student Borrower Protection Center and the Project on Predatory Student Lending.

Related links:

2U Suspended from NASDAQ. Help for USC and UNC Student Loan Debtors.

2U Declares Chapter 11 Bankruptcy. Will Anyone Else Name All The Elite Universities That Were Complicit?

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

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

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

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

College Meltdown 2.1 (2022)

EdTech Meltdown (2023)  

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