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Dive Brief:
Hampshire Collegefaces persistent operating pressures and potential closure risk if it can’t refinance its debt, according to the private Massachusetts institution’s latest audit.
Hampshire breached the terms on a group of bonds last June,which could trigger a default, according to the college’s latest audit. Moreover, the college has been negotiating with a bondholder wishing to exercise an option on a separate bond group that would force Hampshire to pay the securities immediately.
Lenders have extended a refinancing deadline until September as the college looks to “demonstrate the successful implementation of its strategic plan to potential investors,” said the audit for the year ending June 30.
Dive Insight:
Not long ago, Hampshire College was the poster child for a successful higher education turnaround, raising tens of millions of dollars in donations and adding hundreds of students to its student body after a close brush with closure in 2019. But as its fiscal 2025 audit shows, the institution is once again under heavy financial stress.
In addition to talks with bondholders, auditors cited recurring decreases in net assets and negative cash flow from the college’s operations. Given those woes, auditors once again added in the college’s financial statement “going concern” language,accounting terminology that signals an entity might not be financially able to continue operating beyond a year. Hampshire’s audits for fiscal years 2023 and 2024 included similar warnings.
Hampshire’s fiscal 2025 year ended in June with a 13.9% drop in total net assets,to $37.9 million, and an operating deficit of $3.7 million.
The college’s total debt stood at $24.9 million at the end of the fiscal year.More than $20 million of that moved from long-term debt to short term after Hampshire breached bond covenants in 2025 and years prior.
Since 2022, one of the college’s bondholders has been trying to exercise a put option, which gives the holder the ability to sell back the bond to the issuer at a given price.As of late November, Hampshire hadn’t come up with a way to refund or refinance the bonds. “Both lenders have extended the tender dates to September 2026,” according to the audit.
According to the institution’s audit, “The College has stated that its ability to continue as a going concern is contingent on securing financing for these bonds.” Along with refinancing, however, officials are also exploring ways to boost enrollment, reduce expenses and potentially sell real estate.
The college has faced the threat of closure before. In fall 2019, Hampshire opted to admit only a partial incoming class as it navigated deep financial distress.
By June 2020, the college had racked up a total operating deficit of $7.1 million, more than double from the year before. But a curriculum revamp and fundraising blitz helped bring the college back from the brink of closure.
Yet pressures remained. The college has continued to operate in the red while trying to chip away at its deficit. In 2024, the college cut 9% of its staff after lower-than-expected enrollment and as it continued working toward a balanced budget.
“We’re still growing, enrollment is still increasing,” then-President Edward Wingenbach told Higher Ed Dive at the time. “This is really more about ensuring that we can continue to be successful as the parameters of that growth change.”
Wingenbach left the college last January, as the college touted steep long-term rises in both applications and enrollment, which reached 844 by fall 2024 — up nearly 70% from two years earlier. Jennifer Chrisler, previouslyHampshire’s chief advancement officer, replaced him as permanent president in October after stepping in as interim.
Hampshire’s enrollment ambitions hit another major speed bump last fall, when its new student enrollment of roughly 150 students missed the college’s goals — by half, MassLive.com reported last week.
For unions and nonprofit organizations committed to civic engagement and economic justice, this represents a unique opportunity: mobilize borrowers in ways that align with their values, rather than against them. Messaging that highlights fairness, personal responsibility, and stewardship—core Christian principles—can resonate deeply while framing student debt as a challenge to both economic and moral accountability.
These borrowers are approaching peak voting age, meaning that engagement now could influence local and national politics in the coming election cycles. Institutions like the University of Phoenix show the scale of the opportunity: over one million borrowers owe more than $21 billion nationwide, suggesting that faith-aligned organizing strategies could have broad impact.
The strategy is clear: educate borrowers about their rights, expose predatory practices, and organize them into civic action, all while respecting their values and beliefs. Done thoughtfully, this approach can build trust and spur meaningful participation in democracy, turning a population long overlooked into an informed, motivated constituency.
The coming years will test whether unions and nonprofits seize this moment. Hundreds of thousands of conservative, Christian borrowers could become a powerful force for accountability and change—but only if engagement is value-driven, strategic, and timely.
Student loan debt has been a defining economic and political issue in the United States for over a decade. As of 2025, Americans owe nearly $1.8 trillion in student loans, with roughly 42–45 million borrowers carrying federal debt and average balances exceeding $39,000 per borrower. Delinquency rates have surged since repayment reporting resumed, with more than one in five borrowers behind on payments, and millions at risk of default. These financial pressures are now rippling through credit markets and household budgets, especially for younger, middle-aged, and lower-income borrowers. While student debt already garners public attention, shifting demographic trends and mounting economic pressures promise to reshape its political weight in the coming years unless comprehensive changes are enacted.
The largest cohort of student borrowers today consists of Millennials and older members of Generation Z, many aged between 25 and 45. These are prime years for political engagement, as individuals are more likely to vote, form households, buy homes, and shape community priorities. In 2028, this group will be even more politically active, navigating careers, families, and fiscal pressures that student debt directly influences. As borrowers age into life stages where financial stability becomes paramount, their appetite for political solutions — including forgiveness, refinancing, and more manageable repayment structures — is likely to intensify.
Student loan debt also affects communities differently. Black and Latinx borrowers are disproportionately burdened, with Black borrowers often owing more and struggling with repayment longer due to structural inequities in income and wealth. These disparities will continue to grow unless systemic reforms address not just debt levels but the economic systems that compound them over time. Communities of color are projected to constitute a larger share of the eligible electorate by 2030, and when a disproportionate share of voters in a given demographic faces an issue like unsustainable debt, it naturally becomes central to their political priorities and shapes the platforms of candidates seeking their support.
Older Americans are impacted by student loan dynamics not necessarily as borrowers themselves, but as co-signers, parents, or caregivers helping children or grandchildren manage debt. With the U.S. population aging, the 65+ age group is expected to grow as a portion of the electorate, and those over 80 will increasingly drive Medicaid and healthcare costs, adding strain to federal and state budgets. Older voters tend to vote at higher rates than younger voters, and as more families find multigenerational debt obligations weighing on retirement savings, caregiving responsibilities, and healthcare needs, the political urgency around student loan reform may expand beyond traditional “student” demographics and into older voters’ policy concerns.
Geographic and economic shifts also shape the political significance of student debt. States with high education costs, and correspondingly high average debt loads, may see student loan issues become central to local and statewide elections. Migration patterns bringing younger, more diverse populations to new regions — including parts of the South and Midwest — will likely influence electoral alignments and policy debates in competitive districts. Meanwhile, national concerns such as the growing federal debt, ongoing military engagements abroad, and rising costs associated with healthcare for an aging population amplify the stakes, creating competing pressures on policymakers who must balance debt relief against broader fiscal challenges.
Economic inequality further complicates the picture. The concentration of wealth among the richest Americans continues to grow, giving this group greater political influence and shaping policy priorities in ways that often conflict with the needs of student borrowers and middle-class families. As wealth and power accumulate at the top, voters carrying student debt may increasingly perceive systemic unfairness, heightening the political salience of debt relief and broader structural reforms. The interaction of these factors — persistent debt, rising national obligations, ongoing conflict, and economic inequality — suggests that student loans will remain intertwined with larger national debates over fiscal responsibility, social safety nets, and the distribution of economic power.
Student loan debt has already become a wedge issue in national politics, especially within Democratic primaries. The demographic shifts of the late 2020s, rising diversity, coupled economic pressures, and growing awareness of wealth inequality could make it a central concern for a broader slice of the electorate. Policymakers who ignore student debt risk alienating key voter blocs: younger voters whose turnout matters in swing states, communities of color with growing electoral influence, and middle-class families navigating financial strain alongside broader economic and geopolitical uncertainties.
The economic impact of outstanding student loan debt, from delayed homeownership to depressed small business formation, carries demographic implications that feed back into the political sphere. If current trends continue, the cost of inaction will not just be political but economic, affecting national growth rates, tax revenue, social programs, and inequality metrics that in turn shape voter sentiment and policy priorities.
Student Debt and the Shifting Political Landscape
By 2028 and into the 2030s, demographic change is poised to elevate student loan debt from a pressing public concern to a core political battleground unless policymakers act proactively. With more borrowers entering key voting blocs, disproportionate impacts across racial and economic lines, and economic consequences rippling through communities of all ages, student loan debt is more than a financial issue: it is a demographic reality shaping the future of American politics.
Sadly, the Higher Education Inquirer will not be around to cover these developments as they unfold. HEI has made predictions about student debt and its political consequences in the past, and while nothing is set in stone, the combination of rising demographics, persistent economic inequality, the mounting national debt, ongoing war-related obligations, and pressures from an aging population does not paint a promising picture. Without major policy reforms — such as targeted debt relief, changes to repayment systems, or broader higher education financing reforms — the political salience of student debt is likely to intensify, influencing campaigns, elections, and national discourse for years to come.
Sources
Education Data Initiative, “Student Loan Debt Statistics 2025,” educationdata.org TransUnion, “May 2025 Student Loan Update,” newsroom.transunion.com Forbes, “Student Loans for 64 Million Borrowers Are Heading Toward a Dangerous Cliff,” forbes.com College Board, “Trends in College Pricing and Student Aid 2025,” research.collegeboard.org LendingTree, “Student Loan Debt Statistics by State,” lendingtree.com NerdWallet, “Student Loan Debt Statistics 2025,” nerdwallet.com
A new survey of federal student loan borrowers by the Institute for College Access and Success, a nonprofit focused on college affordability, found that about a fifth of borrowers are currently in either delinquency or default.
“These findings bring even greater urgency to ongoing concerns about a looming ‘default cliff,’ where an unprecedented number of borrowers struggle so much to repay their loans that they default on their payments in droves,” Michele Zampini, TICAS’s associate vice president for federal policy and advocacy, wrote in a blog post.
The Department of Education itself acknowledged a potential default cliff in an August data release, Zampini noted, writing that, although no new borrowers had defaulted since payments were paused in March 2020, many delinquent borrowers were in danger of defaulting after that pause ended.
Zampini also wrote that student loan default “comes with severe and punitive consequences.”
Just over half of respondents (52 percent) said their debt has negatively affected their ability to save for retirement, and 45 percent said the same about their ability to find and afford housing. Slightly fewer participants said that their student loan debt was “worth it”—41 percent—than said it wasn’t, at 48 percent. Advanced degree holders were more likely to consider their debt “worth it” than those with an associate or bachelor’s degree, as were male borrowers compared to female borrowers.
For Generation Z, the old story of social mobility—study hard, go to college, work your way up—has lost its certainty. The class divide that once seemed bridgeable through education now feels entrenched, as debt, precarious work, and economic volatility blur the promise of progress.
The new economy—dominated by artificial intelligence, speculative assets like cryptocurrency, and inflated housing markets—has not delivered stability for most. Instead, it’s widened gaps between those who own and those who owe. Many young Americans feel locked out of wealth-building entirely. Some have turned to riskier bets—digital assets, gig work, or start-ups powered by AI tools—to chase opportunities that traditional institutions no longer provide. Others have succumbed to despair. Suicide rates among young adults have climbed sharply in recent years, correlating with financial stress, debt, and social isolation.
And echoing through this uncertain landscape is a song that first rose from the coalfields of Kentucky during the Great Depression—Florence Reece’s 1931 protest hymn, “Which Side Are You On?”
Come all you good workers,
Good news to you I’ll tell,
Of how the good old union
Has come in here to dwell.
Which side are you on?
Which side are you on?
Nearly a century later, those verses feel newly urgent—because Gen Z is again being forced to pick a side: between solidarity and survival, between reforming a broken system or resigning themselves to it.
The Class Divide and the Broken Ladder
Despite record levels of education, Gen Z faces limited social mobility. College remains a class marker, not an equalizer. Students from affluent families attend better-funded universities, graduate on time, and often receive help with housing or job placement. Working-class and first-generation students, meanwhile, navigate under-resourced campuses, heavier debt, and weaker professional networks.
The Pew Research Center found that first-generation college graduates have nearly $100,000 less in median wealth than peers whose parents also hold degrees. For many, the degree no longer guarantees a secure foothold in the middle class—it simply delays financial independence.
They say in Harlan County,
There are no neutrals there,
You’ll either be a union man,
Or a thug for J. H. Blair.
The metaphor still fits: there are no neutrals in the modern class struggle over debt, housing, and automation.
Debt, Doubt, and the New Normal
Gen Z borrowers owe an average of around $23,000 in student loans, a figure growing faster than any other generation’s debt load. Over half regret taking on those loans. Many delay buying homes, having children, or even seeking medical care. Those who drop out without degrees are burdened with debt and little to show for it.
The debt-based model has become a defining feature of American life—especially for the working class. The price of entry to a better future is borrowing against one’s own.
Don’t scab for the bosses,
Don’t listen to their lies,
Us poor folks haven’t got a chance
Unless we organize.
If Reece’s song once called miners to unionize against coal barons, its spirit now calls borrowers, renters, adjuncts, and gig workers to collective resistance against financial systems that profit from their precarity.
AI and the Erosion of Work
Artificial intelligence promises efficiency, but it also threatens to hollow out the entry-level job market Gen Z depends on. Automation in journalism, design, law, and customer service cuts off rungs of the career ladder just as young workers reach for them.
While elite graduates may move into roles that supervise or profit from AI, working-class Gen Zers are more likely to face displacement. AI amplifies the class divide: it rewards those who already have capital, coding skills, or connections—and sidelines those who don’t.
Crypto Dreams and Financial Desperation
Locked out of traditional wealth paths, many young people turned to cryptocurrency during the pandemic. Platforms like Robinhood and Coinbase promised quick gains and independence from the “rigged” economy. But when crypto markets crashed in 2022, billions in speculative wealth evaporated. Some who had borrowed or used student loan refunds to invest lost everything.
Online forums chronicled not only the financial losses but also the psychological fallout—stories of panic, shame, and in some tragic cases, suicide. The new “digital gold rush” became another mechanism for transferring wealth upward.
The Real Estate Wall
While digital markets rise and fall, real estate remains the ultimate symbol of exclusion. Home prices have climbed over 40 percent since 2020, while mortgage rates hover near 8 percent. For most of Gen Z, ownership is out of reach.
Older generations built equity through housing; Gen Z rents indefinitely, enriching landlords and institutional investors. Without intergenerational help, the “starter home” has become a myth. In America’s new class order, those who inherit property inherit mobility.
Despair and the Silent Crisis
Behind the data lies a mental health emergency. The CDC reports that suicide among Americans aged 10–24 has risen nearly 60 percent in the past decade. Economic precarity, debt, housing insecurity, and climate anxiety all contribute.
Therapists describe “financial trauma” as a defining condition for Gen Z—chronic anxiety rooted in systemic instability. Universities respond with mindfulness workshops, but few confront the deeper issue: a society that privatized risk and monetized hope.
They say in Harlan County,
There are no neutrals there—
Which side are you on, my people,
Which side are you on?
The question lingers like a challenge to policymakers, educators, and investors alike.
A Two-Tier Future
Today’s economy is splitting into two distinct realities:
The secure class, buffered by family wealth, education, AI-driven income, and real estate assets.
The precarious class, burdened by loans, high rents, unstable work, and psychological strain.
The supposed democratization of opportunity through technology and education has in practice entrenched a new feudalism—one coded in algorithms and contracts instead of coal and steel.
Repairing the System, Not the Student
For Generation Z, the American Dream has become a high-interest loan. Education, technology, and financial innovation—once tools of liberation—now function as instruments of control.
Reforming higher education is necessary, but not sufficient. The deeper work lies in redistributing power: capping predatory interest rates, investing in affordable housing, curbing speculative bubbles, ensuring that AI’s gains benefit labor as well as capital, and confronting the mental health crisis that shadows all of it.
Florence Reece’s song endures because its question has never been answered—only updated. As Gen Z stands at the intersection of debt and digital capitalism, that question rings louder than ever:
Which side are you on?
Sources
Florence Reece, “Which Side Are You On?” (1931).
Pew Research Center, “First-Generation College Graduates Lag Behind Their Peers on Key Economic Outcomes,” 2021.
Dēmos, The Debt Divide: How Student Debt Impacts Opportunities for Black and White Borrowers, 2016.
EducationData.org, “Student Loan Debt by Generation,” 2024.
Federal Reserve Bank of St. Louis, Gen Z Student Debt and Wealth Data Brief, 2022.
CNBC, “Gen Z vs. Their Parents: How the Generations Stack Up Financially,” 2024.
WUSF, “Generation Z’s Net Worth Is Being Undercut by College Debt,” 2024.
Newsweek, “Student Loan Update: Gen Z Hit with Highest Payments,” 2024.
The Kaplan Group, “How Student Debt Is Locking Millennials and Gen Z Out of Homeownership,” 2024.
CDC, Suicide Mortality in the United States, 2001–2022, National Center for Health Statistics, 2023.
Brookings Institution, “The Impact of AI on Labor Markets: Inequality and Automation,” 2024.
CNBC, “Crypto Crash Wipes Out Billions in Investor Wealth, Gen Z Most Exposed,” 2023.
Zillow, “U.S. Housing Affordability Reaches Lowest Point Since 1989,” 2024.
Negotiated rulemaking, in which the federal government convenes representatives of affected parties before implementing major policy changes, is one of the wonkier topics in higher education. (I cannot recommend enough Rebecca Natow’s book on the topic.) Negotiated rulemaking has been in the news quite a bit lately as the Department of Education works to implement changes to federal student loan borrowing limits passed in this summer’s budget reconciliation law.
Since 2006, students attending graduate and professional programs have been able to borrow up to the cost of attendance. But the reconciliation law limited graduate programs to $100,000 and professional programs to $200,000, setting off negotiations on which programs counted as “professional” (and thus received higher loan limits). The Department of Education started with ten programs and the list eventually went to eleven with the addition of clinical psychology.
In this short post, I take a look at the debt and earnings of these programs that meet ED’s definition of “professional,” along with a few other programs that could be considered professional but were not.
Data and Methods
I used program-level College Scorecard data, focusing on debt data from 2019 and five-year earnings data from 2020. (These are the most recent data points available, as the Scorecard has not been meaningfully updated during the second Trump administration. Five-year earnings get students in health fields beyond medical residencies. I pulled all doctoral/first professional fields from the data by four-digit Classification of Instructional Programs codes, as well as master’s degrees in theology to meet the listed criteria.
Nine of the eleven programs had enough graduates with debt and earnings to report data; osteopathic medicine and podiatry did not. There were five other fields of study with at least 14 programs reporting data: education, educational administration, rehabilitation, nursing, and business administration. All of these clearly prepare people for employment in a profession, but are not currently recognized as “professional.”
Key takeaways
Below is a summary table of debt and earnings for professional programs, including the number of programs above the $100,000 (graduate) and $200,000 (professional) thresholds. Dentistry, pharmacy, and medicine have a sizable share of programs above the $100,000 threshold, while law (the largest field) has only four of 195 programs over $200,000. Theology is the only one of the nine “professional” programs with sufficient data that has higher five-year earnings than debt, suggesting that students in other programs may have a hard time accessing the private market to fill the gap between $200,000 and the full cost of attendance.
On the other hand, four of the five programs not included as “professional” have higher earnings than debt, with nursing and educational administration being the only programs with sufficient data that had debt levels below 60% of earnings. More than one-third of rehabilitation programs had debt over the new $100,000 cap, while few programs in other fields had that high of a debt level. (Education looks pretty good now, doesn’t it?)
I expect the debate over what counts as “professional” to end up in courts and to possibly make its way into a future budget reconciliation bill (about the only way Congress passes legislation at this point). Until then, I will be hoping for newer and more granular data about affected programs.
One month ago, Republicans chose to shut down the government rather than protect our healthcare. Now, by refusing to process SNAP benefits for November, they’ve put 42 million working families at risk of going hungry or being forced deeper into debt just to put food on the table.
Most of us aren’t in debt because we live beyond our means — we’re in debt because we’ve been denied the means to live. This is especially true for SNAP recipients, most of whom are workers being paid starvation wages by greedy employers, or tenants being squeezed every month by predatory landlords. SNAP is a lifeline for people trapped in an economic system that’s designed to work against us, which is exactly why they’re trying to destroy it.
Authoritarianism thrives on silence and complicity. We refuse to give in.This weekend, organizers across the country are mobilizing a mass effort to connect people with existing mutual aid networks. If you are on SNAP and are not sure where to look for help, get plugged into your local mutual aid network to get your needs met and organize to help others meet theirs.
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Dive Brief:
The U.S. Department of Education on Thursdayreleased final regulations that will bar organizations the agency deems as having a “substantial illegal purpose”from being a qualifying employer for the Public Service Loan Forgivenessprogram.
The Trump administration’s new rule will exclude organizations from the PSLF program that it determines to be“supporting terrorism and aiding and abetting illegal immigration,” among other activities, according to Thursday’s announcement.
Several advocacy groups immediately vowed to challenge the rule in court. They and other opponents argue the agency is politicizing the PSLF program and will use the new rule to remove organizations with goals not aligned with the Trump administration, such as providing gender-affirming care or supporting undocumented immigrants.
Dive Insight:
Congress created the PSLF program in 2007 to allow college graduates who work for government employers, including school districts, and certain nonprofits to receive debt relief on their student loans after making a decade of qualifying payments.
Many borrowers initially struggled to get relief through the program due to confusing eligibility requirements and loan servicer issues. As of April 2018, for example, just 55 workers had received debt relief through PSLF, according to a report that year from the U.S. Government Accountability Office.
To address the problems, the Biden administration eased some of the program’s requirements in October 2022 for one year.The administration also released regulations that expanded which loan payments counted toward PSLF beginning in 2023.
By October 2024, over 1 million workers had received relief through the program during the Biden administration, the White House said at the time.
But in a March executive order directing the Education Department to change PSLF’s eligibility requirements, President Donald Trump accused the prior administration of abusing the program by relaxing its requirements. Trump also contended that the program sent tax dollars to “activist organizations”that harm national security and undermine American values.
The Education Department’s final rule, which takes effect July 2026, is meant to carry out the executive order.It will bar organizations from the PSLF program if the Education Department determines they illegally:
Aided and abetted violations of federal immigration law.
Aided and abetted illegal discrimination.
Supported terrorism or engaged in violence “for the purpose of obstructing or influencing Federal Government policy.”
Engaged in “chemical and surgical castration or mutilation of children” — a common conservative description of providing gender-affirming care for transgender minors.
Engage in the “trafficking of children” across state lines to emancipate them from their parents.
Have a pattern of violating state laws.
The U.S. education secretary will determine whether employers have a “substantial illegal purpose” based on “a preponderance of the evidence,” which can include final federal or state court rulings or settlements in which organizations admit they engaged in illegal activities, according to an agency fact sheet.
Employers who are notified of such a finding will have an opportunity to respond and appeal.
They will also be able to “enter into a corrective action plan” with the Education Department to avoid being blocked from the program, according to an agency fact sheet. However, if they lose access to PSLF, they will only be able to reapply after 10 years.
If an organization is blocked from the program, loan payments made by its employees will still count toward their PSLF’s 10-year clock until the Education Department’s finding takes effect, according to a fact sheet.
“However, any payment made after an employer is deemed no longer eligible for PSLF will not be counted toward the number of payments to forgiveness,” the department said in the 185-page final rule, set to be published on Friday.“This approach ensures that workers who have served in good faith are not punished, while also protecting taxpayers by preventing benefits from flowing to unlawful conduct in the future.”
Student advocacy and nonprofit groups have decried the new rule.
Aaron Ament, president of the National Student Legal Defense Network, vowed in a Thursday statement to sue in the next few days.
“Instead of supporting first responders, healthcare workers, and teachers working to make our country a better place, the Trump Administration is punishing public servants for their employers’ perceived political views,” Ament said.
Democracy Forward and Protect Borrowers, two other advocacy groups, likewise said they would challenge the rule in court. In a joint statement Thursday, they said the rule would allow the Education Department to target organizations that support immigrants, provide gender-affirming care and protect the free speech rights of protesters.
“This new rule is a craven attempt to usurp the legislature’s authority in an unconstitutional power grab aimed at punishing people with political views different than the Administration’s,” they said.
Todd S. Nelson rose from academic beginnings—a B.S. from Brigham Young University and an MBA from the University of Nevada, Reno—to dominate the for-profit higher education space. Over nearly four decades, Nelson has amassed vast personal wealth leading University of Phoenix, Education Management Corporation (EDMC), and Perdoceo Education, even as each institution left embattled students and regulatory fallout in its wake.
Under Nelson’s leadership, Apollo Group (parent of University of Phoenix) mountains of revenue—$2.2 billion and over 300,000 students by 2006—coincided with a $41 million payday in that year alone. He resigned amid pressure over deceptive admissions practices.
Nelson’s move to EDMC in 2007 triggered another enrollment explosion—from 82,000 to over 160,000 students by 2011—propelled by federal student aid. Annual revenues reached nearly $2.8 billion, even as employees were alleged to be encouraged to enroll “anyone and everyone” to meet quotas. This aggressive focus on recruitment came with enormous personal compensation—approximately $13.1 million annually—while students endured mounting debt and dwindling outcomes.
A 2015 landmark settlement exposed EDMC’s alleged violations under the False Claims Act. The Justice Department accused the company of operating as a “recruitment mill,” illegally funneling federal funds through false certifications. EDMC agreed to pay $95.5 million in damages and forgive more than $102 million in student loans, affecting about 80,000 former students—averaging around $1,370 per student.Internal documents and court filings paint a grim picture: incentive-based pay for recruiters, breach of fiduciary duties, and a business model the trustee called “fundamentally fraudulent.”
Nelson’s chapter at Career Education Corporation (later Perdoceo) echoed the same script. Campuses shuttered, including Le Cordon Bleu and Sanford-Brown, left students stranded with untransferable credits—and yet Nelson’s compensation remained soaring. In 2019, he earned $7.4 million and held about $12 million in equity.
Whistleblower accounts from inside Perdoceo’s operations are damning. One former recruiter described pressure to enroll students “by any means necessary,” including coercive calls and emotional manipulation—often targeting vulnerable applicants with low income or lacking basic readiness. Despite those practices, Perdoceo reaped profits, with Nelson publicly touting revenue growth even as the Department of Education issued a formal notice in May 2021: thousands of borrower defense claims were pending against the company, alleging misrepresentations on credits, employment prospects, and accreditation.
Further regulatory investigations deepened through early 2022, focusing on recruiting, marketing, and financial aid practices—yet no executive accountability has followed.
The narrative that emerges is stark: Todd S. Nelson repeatedly led institutions to profit-fueled expansion using students’ federal dollars, while suppressing outcomes and exposing students to debilitating debt. Lawsuits, settlements, and investigative reports expose deceptive enrollment practices, false claims, and regulatory violations—but the executives—including Nelson—walk away with wealth and are rarely held personally responsible.
Sources
Wikipedia: Todd S. Nelson—compensation figures and resignation amid scrutiny.
TribLIVE: Allegations of “anyone and everyone” being enrolled to meet quotas under Nelson’s reign at EDMC.
Career Education Review: Insights on quality decline amid enrollment growth at EDMC and Perdoceo.
Department of Justice and NASFAA: 2015 EDMC settlement—$95.5 million damages, $102 million in loan forgiveness for hundreds of thousands.
Bankruptcy court filings: Allegations of fraudulent business model and incentive-driven recruitment.
Republic Report & USA Today: Whistleblower testimony on Perdoceo’s predatory recruiting tactics.
