Tag: Beware

  • PXED — A $22 Billion Student‑Debt Gamble Investors Should Beware

    PXED — A $22 Billion Student‑Debt Gamble Investors Should Beware

    Warning to Investors: Phoenix Education Partners (PXED) may present itself as a cutting‑edge solution in career-focused higher education, but it’s built on the same extractive infrastructure that powered the University of Phoenix. With nearly a million students still owing an estimated $22 billion in federal loans, backing PXED isn’t just a financial bet — it’s a moral and reputational risk.

    PXED’s leadership includes powerful private-equity players: Martin H. Nesbitt (Co‑CEO of Vistria and PXED trustee), Adnan Nisar (Vistria), and Theodore Kwon and Itai Wallach (Apollo Global Management). Also in the mix is Chris Lynne, PXED’s president and a former Phoenix CFO intimately familiar with UOP’s controversial enrollment and marketing strategies. These are not educational reformers — they are dealmakers aiming to extract value from a student-debt pipeline.

    Higher Education Inquirer’s College Meltdown Index highlights how PXED fits into a broader financialization of higher education. Rather than reforming the University of Phoenix, its backers have resurrected it under a new brand — one that continues to enroll vulnerable adult learners, harvest federal aid, and operate with considerably less public oversight. 

    Whistleblowers previously documented that Phoenix pressured recruitment staff to falsify student credentials, enrolling people who wouldn’t otherwise qualify for federal aid. Courses were allegedly kept deliberately easy — not to teach, but to keep students “active” enough to trigger aid disbursements. Internal marketing also exaggerated job prospects and corporate partnerships (e.g., with Microsoft and AT&T) to entice students. 

    PXED may lean on a three‑year default rate (often cited around 12–13%), but that number is deeply misleading. Many UOP students stay stuck in deferment, forbearance, or income-driven repayment, masking the real long-term risk of non-payment. This is not just a short-term liability — it’s a potentially massive, multiyear financial exposure for PXED’s backers.

    There was a significant FTC settlement that canceled $141 million in student debt and refunded $50 million to some students. But the scale of harm far exceeds that payout. Untold numbers of borrowers still have unresolved Borrower Defense claims, and the reputational risk remains profound.

    Beyond financial concerns, there’s a major ethical dimension. HEI’s Divestment from Predatory Education argument makes a compelling case that investing in companies like PXED — or in loan servicers that profit from student debt — is not just risky, but morally indefensible. According to HEI, institutional investors (including university endowments, pension funds, and foundations) are complicit in a system that monetizes students’ aspirations and perpetuates financial harm. 

    For investors, the message is clear: Phoenix is not merely an education play — it’s a high-stakes, ethically fraught extraction machine built on a legacy of indebtedness and regulatory vulnerability.

    Unless PXED commits to real transparency, independent reporting on student outcomes, and accountability mechanisms — including reparations or debt relief — it should be approached not as a social-growth story, but as a dangerous gamble.


    Sources

    • HEI. “Divestment from Predatory Education Stocks: A Moral Imperative.” Higher Education Inquirer

    • HEI. “The College Meltdown Index: Profiting from the Wreckage of American Higher Education.” Higher Education Inquirer

    • HEI. “What Do the University of Phoenix and Risepoint Have in Common? The Answer Is a Compelling Story of Greed and Politics.” Higher Education Inquirer

    • HEI. “University of Phoenix Uses ‘Sandwich Moms’ to Sell a Debt Trap.” Higher Education Inquirer

    • HEI. “New Data Show Nearly a Million University of Phoenix Debtors Owe $21.6 Billion.” Higher Education

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  • Beware the sharing issue in the depths of the higher education iceberg

    Beware the sharing issue in the depths of the higher education iceberg

    If you’re a proper Eurovision Song Contest loser like me, you look forward each year to the crowdsourced fansourced compilation of the season’s Iceberg.

    On the surface is the stuff you figure that “normal” casual Saturday night viewers will notice – like the considerable coverage afforded to Malta’s entry this year, which involved its artist Miriana Conte attempting to argue that her song “Serving Kant” really meant “serving song”.

    Then several layers below sea level there’s things like the news that Sasha Bognibov – who has entered the Moldovan selection several times with a series of increasingly creepy entries – had died of a heart attack, only to come back alive a few days later.

    “Icebergs of ignorance”, as they’re officially known, were originally invented by a Japanese management consultant in the 80s. Sidney Yoshida’s keynote at the 1989 International Quality Symposium in Mexico had described his research on a car manufacturer named Calsonic – where he’d found that senior managers at the firm only saw about 4 percent of the issues, with the bulk hidden at lower levels.

    And like an iceberg, most of the danger lies beneath the surface – with supervisors and frontline staff far more aware of the everyday challenges. In theory it all highlights the need for stuff like open communication, feedback loops and genuine staff voice – so decision-makers aren’t steering blind.

    Under the surface

    I’ve long been fascinated by the way the concept might apply in a university. Plenty of senior leaders might take the view that the cultural (and now regulatory/legal) protection afforded to academic staff saying critical things on social media on everything from workload to the travel booking system means very little is below the surface – but my guess is that that can breed complacency about the things that people don’t say out loud.

    From a higher education sector and public perception point of view, we might interpret new research from the Policy Institute at King’s and HEPI in a similar way – an iceberg of misunderstanding where the surface-level chatter obscures the submerged reality.

    The public apparently overestimate graduate regret, assumes that nearly half of graduates feel crushed by debt when only 16 per cent say so, and underestimate higher education’s economic heft. And like Yoshida’s managers, the danger isn’t so much ignorance of the big headlines as it is the quiet accumulation of false assumptions beneath the surface – gaps in knowledge that, if unchallenged, steer the national conversation off course.

    But it’s the big financial crisis in the sector where I keep thinking most about the Iceberg. Above the surface, to the extent to which the issue is “cutting through”, it’s the prospect of a provider going under that the press seem really keen to report on. Every other day one of us at Team Wonkhe will get a message from journo or other asking us who might be on the brink, presumably because stories like this in the i Paper (“At least six unis at risk of going bust before 2025 freshers finish their degrees”) get clicks.

    Just below the surface (for me at least) is what’s happening to student demand (or, more accurately, supply) – a process that seems to be converting “high”, “medium” and “low” tariff group categories into “medium”, “low” and “has a pulse” as each day of Clearing 2025 goes on.

    The next level down for me is redundancy rounds and telegraphed cuts. They definitely sound bad – especially if a course closes. But if they result in 24 hour library becoming a 15 hour one, or the optional electives on an undergraduate degree being slashed, they seem be harder to pin down and understand – and often aren’t being picked up and protected by consumer law, complaints or Student “Protection” Plans.

    The worst of all of that, at least so far, has been down the bottom end of the league tables – although journos hoping for an actual collapse may find that the realities of processes like endless cost-cutting remain buried at the bottom of the iceberg because of the amount of debt that everyone’s in.

    A small provider like Spurgeon’s can fall over because the banks aren’t expecting millions to be repaid on shiny buildings – big universities extended in that way are likely to be able to renegotiate because banks like being paid back, albeit in a way that effectively surrenders the already shaky illusion that the Board of Governors is in control to a shadow board of bankers insisting on deeper and deeper cuts to students with the least social capital and confidence to complain about them.

    We need a shrink

    What then manifests is the scourge of shrinkflation. You know the idea – when the Quality Street tubs appear in the supermarket in September, you’re only minutes away from a national newspaper pointing out that there’s two fewer toffee pennies in this year’s tub of 525g than last year. I mean have you seen how small a Freddo is these days?

    The problem for students is that this stuff is hard to spot and even harder to enforce rights over. It is simply not possible to lose the number of academic staff that the sector has lost over the past two years and for providers to not be in breach of contract – promises have either been broken, or the contract itself gives a university too wide a discretion to vary, or it doesn’t and the risks of not making the cuts are greater than the risks of a handful of students having the energy to complain.

    And when the big red flags from the Office for “Students” are about financial sustainability with the odd askance murmur about finding efficiencies in a way that protects the student experience, it’s not as if the regulatory environment is doing anything other than egging on the shrinkflation. You’re only going to get inspected on the provision by OfS if your outcomes are terrible, and it seems to have all but given up doing inspections anyway.

    Will a student enrolling onto a three year degree get the course they were promised in two years time? I’ve no idea, and all OfS can offer in protection terms is “let’s hope you paid your fees on a credit card because you might be able to get the credit card company to do a chargeback”.

    Every year I get taken in by a fresh promise that OfS will actually enforce the stuff about broken promises. Almost a year ago to the day Director for Fair Access and Participation John Blake turned up at an SU staff conference to declare that he’d heard students worried about being promised one thing and getting another loud and clear. What he didn’t say was that a full year on, its new definitions of “fairness” will only apply to students in newly registered providers – with no sense of when “fairness” might be a thing for everyone else.

    Deep down

    But the temptation would be to assume that the harms of where we are are exclusively in those layers already mentioned. For me, right down at the bottom of the Iceberg – for the public, regulators and students themselves – is the sharing problem.

    I often lament that being in a university library in certain weeks of the year is like being on a short-formed Cross Country train with no air con on a Bank Holiday Monday when the service before it has been cancelled. There’s nowhere to sit, everyone is very tense, and there’s a real sense that an actual fight might break out between two otherwise polite members of the public over a seat reservations issue.

    There’s always an idiot with their bag on a seat, the catering trolley can’t get through, and the wheelchair user finds themselves yelling at those with suitcases because they’ve been plonked in the space for chairs at the end of the carriage. It’s carnage.

    Over the years, I’ve often skim-read commentary from financial and management consultant types that “one less international PGT means needing to recruit two home students”, as if the only thing that matters is the overall financial target rather than having enough of everything for the students being recruited.

    What I (almost certainly naively) never expected is that it pretty much is panning out like that at the top end of the tables – and while there’s debates to be had about acquisition costs, suitability for a course and/or culture, market instability and the loss of “local” options and choice, the thing that worries me most of all is the sharing thing.

    Let’s imagine – hopelessly simplistically, I know – that some universities are indeed setting a financial target regardless of the number of students that would involve recruiting. As part of that, let’s imagine that these are universities more likely to recruit students living away from home. If 1 x PGT becomes 2 x UG, are there enough bed spaces in the city?

    Enough is enough

    Enough books in the library? Enough marking capacity to hit the 2 week turnaround pledge? Enough sockets for laptops when everyone’s in at once? Enough spaces in seminar rooms to avoid students sitting on the floor? Enough counselling staff to cope when that extra intake tips more students into crisis? Enough careers support to avoid queues that make the whole thing feel tokenistic rather than transformative?

    Enough quiet corners for those who can’t concentrate in noisy shared flats or packed libraries? Enough placements to go around when professional courses all need them at the same time of year? Enough personal tutor appointments to avoid the system becoming decidedly impersonal? Enough contact with actual academics rather than a carousel of casualised staff? Enough eduroam bandwidth when every lecture, seminar, and social is streaming at once? Enough student housing that isn’t mouldy, miles away, or eye-wateringly expensive?

    “Enough” is already pretty subjective – and itself subject to wild differences between subject areas on campus in a way that makes it hard to not always spot someone (probably an international PGT in the Business School) who’s worse off. Even if they knew they could and even if they were minded to, it’s pretty hard for a student to argue that something that is still there and was always shared is being stretched a little too thinly now.

    And this sort of thing almost always manifests in conflict between students rather than pinning the blame tail on the university donkey – see our dismal debates about things like NHS access and immigration for a classic example.

    It’s not even as if the regulator doesn’t understand. John Blake again, a year ago:

    When the 2012 number controls were abolished, there are institutions that literally doubled in size overnight… I don’t know that the answer is us saying, no, you can’t have your students, or you have to do this. But I think there’s definitely scope for us thinking about what the obligation of institutions is to have discussions with their local community about where their students are going to go, because it’s clearly not sustainable for every institution to double itself overnight in small places.

    See also everything else about a university experience that, by definition, involves sharing things.

    Swear words

    It remains the case that it’s almost as bad to sing the uncensored version of Miriana Conte’s Eurovision entry in a church as it is to even gently propose some student number controls. And even though one of the least publicly resisted immigration rules is not a cap but a “if you want more CAS, you have to think about whether you have the capacity” (maybe because it’s never been meaningfully or publicly enforced by UKVI), people even seem to be nervous about suggesting something like that for home students.

    I’ve said it before and I’ll say it again – higher education is an endeavour that is profoundly unsuited to very rapid expansion and very rapid contraction at programme, subject and institutional level. But the biggest mistake of all would be to focus on the end of the league tables where the impacts of contraction are closest to the Iceberg’s surface.

    Cramming tens of thousands more students into the cities of the (not so) high tariffs may well be just as damaging, all while the tone of their recruitment relationship – “you’re lucky to be here” – reduces the chances of students doing anything other than the HE equivalent of putting your head down, crouching next to the toilet and staring at your phone for three gruelling hours. Or, in HE’s case, years.

    It’s really not hard this one. You want to expand your student numbers by more than 5 per cent in a subject area? Publicly consult on how you’ll do it – including the results of conversations with staff, students, the local community and local providers, and you’re on. Imagine suggesting out loud that doing some planning to ensure more students doesn’t mean a worse experience would represent a regulatory “burden”.

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  • Beware Illusions of Campus Normalcy This Spring (opinion)

    Beware Illusions of Campus Normalcy This Spring (opinion)

    It’s nearing the end of the academic year at Harvard University, where I teach in the Graduate School of Education. Students are preparing for final exams and finishing up capstone projects. Awards ceremonies are being held and celebrations, formal and informal, have begun. The weather has finally warmed up in Cambridge, and the outdoor tables at restaurants and coffee shops are crowded. The women’s tennis team clinched the Ivy League title.

    It all feels normal. Yet it all feels discordant, like a scene in a M. Night Shyamalan movie that infuses the quotidian with a barely detectable feeling of dread.

    This discordance is of course especially powerful at Harvard, the current epicenter of a ferocious and lawless attack on higher education that might make Viktor Orbán blush. But it is not unique to Harvard. At colleges and universities across the country, classes continue, clubs meet and Frisbees are being tossed even as the government sows fear and confusion by revoking, then restoring, then warning that it might again revoke the visa statuses of more than 1,800 international students.

    Lawyers continue to do what lawyers do, while large firms are essentially signing on to be instruments of the government, individuals are being targeted because the president of the United States holds a grudge, bigly, and court orders are being ignored.

    Doctors continue to treat patients while billions of dollars of funding for medical research and experimental trials are being withheld and the secretary of Health and Human Services is declaring that autism is preventable and the measles vaccine is maybe, sort of OK.

    We get in our cars or on our bicycles and go off to work while the government is pressing before the courts an argument that would allow it to send anyone, citizen or noncitizen, to a foreign prison without cause or legal recourse.

    When many of us think about authoritarian takeovers, we imagine military coups and declarations of martial law. But the truth is that the most powerful tool of the aspiring authoritarian is not shock, but normalcy. How bad can things be if we can still shop at Costco or take our families out for Italian food? How bad can they be if we can still download Maya Angelou onto our Kindles or watch Jimmy Kimmel Live!? How bad can they be if I can still publish a piece like this one, critical of the federal government?

    Look around not only at the campuses, but at the streets and bars and hardware stores in any city or town in America and it appears to be the same as it was last year and the year before. The NBA playoffs have begun and there’s a new film starring Michael B. Jordan. Normal.

    Except it is not, in ways of which we are vaguely aware but unable or unwilling to fully credit.

    For most people—the ones not scooped off the street by men in masks or ousted from their jobs with the federal government without cause or forced to stop their research because of the loss of National Institutes of Health funding—life feels more or less the way it did when we were a reasonably functional democracy. This is the way it works: Keep 99 percent of the lives of 99 percent of the people undisturbed for as long as possible so that they will remain unaware of or indifferent to what is happening at the margins. By the time they recognize that the edges of normalcy have drawn closer, it will be too late to do anything about it because the guardrails will have been destroyed.

    Begin with the least sympathetic targets. Who will shed tears for the fate of Venezuelan gang members (real or imagined)? Does anyone really like Big Law? Government employees are the problem, not the solution. Harvard, with its giant endowment and Ivy League arrogance, is rarely anyone’s idea of an underdog. Why should we concern ourselves with any of this on the way to McDonald’s or Starbucks? I work at Harvard and most of the time I find it difficult to take seriously the reality that the federal government is trying to destroy a private university simply to prove that it can and because its appetite for both control and chaos appears to have no limits.

    Be sure to cite rules and regulations that few people care to understand. What is 501(c)(3) status anyway? “Indirect costs” seem sort of like a scam. The “Alien Enemies Act” sounds like something pulled from the latest Marvel movie. Then cloak it all in the guise of causes to which it seems difficult to object—fighting antisemitism, because Donald Trump and the party of Marjorie Taylor Greene and the Proud Boys are the first things that come to mind when one thinks about protecting Jews. Or perhaps national security, given the threat to the republic posed by international students co-authoring op-eds for the campus newspaper.

    Above all, lie. Constantly, relentlessly, shamelessly lie. Since most people don’t spend a majority of their time lying about a majority of things, they appear to find it difficult to recognize when other people do. It’s hard to question a time-tested strategy.

    The fight against our current level of inertia is painfully difficult because the allure of the normal, the desire to believe that things are just fine, is so powerful. A tank in the street is hard to ignore. A steady eroding of legal and ethical norms just beyond the limits of our daily vision is easy to miss.

    Our greatest hope might be the tendency of authoritarians and those without any moral compass to overreach. If they can change life by 1 percent without much resistance, why not five or 10 or 20? If they can, through executive actions, free hundreds of convicted felons and strip away environmental protections, why not impose arbitrary and irrational tariffs? What made the reaction to tariffs different and what has, at least for the moment, slowed their progress is the fact that they tore a hole in the illusion of normalcy. Plummeting retirement accounts and worries about the cost of groceries will disrupt the normal in a way that canceling student visas or defunding Harvard will not. It was a mistake, and they will, out of arrogance and stupidity, make more.

    The set of demands sent to Harvard, for instance, which Harvard refused to comply with, resulting in headlines around the globe, was apparently sent in error. You could make that up, but no one would believe you.

    Meanwhile, I wonder whether we can afford to wait. Is it sufficient to hope that they will make things abnormal enough for a large enough group of people to provoke resistance, or do we have to do the difficult work of wrenching ourselves, somehow, out of the reassuring comforts of familiar routines? David Brooks, hardly a radical, has called for a “comprehensive national civic uprising” to counter the war being waged on our national civic fabric. Do people, organizations and institutions in the United States, so certain for so long about the permanence of its democracy, even have the energy or the will? Can that happen here or is it something that happens in Seoul or Istanbul and is shown on CNN?

    Meanwhile, I have laundry to do and a class to teach this week. Maybe I’ll catch something on Netflix. Pretty normal stuff.

    Brian Rosenberg is president emeritus of Macalester College, a visiting professor at Harvard Graduate School of Education and author of Whatever It Is, I’m Against It: Resistance to Change in Higher Education (Harvard Education Press, 2023).

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