Academic Capitalism and the next phase of the College Meltdown (updated January 26, 2022)

It appears we have entered a new phase of Academic Capitalism and the College Meltdown. The previous phase involved College Mania! and the growth of the "educated underclass" (including gig workers, adjuncts and postdocs), Wall Street over-speculation, the divestment of corporations from employee benefits, and the rise and fall of for-profit colleges: Corinthian Colleges, ITT Tech, Education Management Corporation, Apollo Group, Education Corporation of America, and Laureate Education.  

Enrollment at proprietary schools is down about 40 percent from its peak in 2010 and higher education enrollment has dropped every year for the last decade.  In absolute numbers, community colleges have taken the largest hit.  Regional public universities have also experienced large enrollment declines.

At other schools, student aid has shifted from "needs based" to "merit based" making college choice for low- and moderate income families an even riskier choice. 

Student loan debt has crippled millions of working families, but neoliberal experts at Goldman Sachs and the Federal Reserve do not see a significant problem. 

According to the Federal Reserve, the student debt problem is ameliorated by the decline in births to people of lower socio-economic status.  The FED has also consistently reported that the debt is not a huge drag on the economy (less than 0.05 percent per year). Those developments, along with an anemic but growing student debt movement, have meant that the chance for progressive and meaningful change is limited under the Biden administration, but possible in the long run.  

This new phase of the College Meltdown has strong roots in the 1980s and involves the continued growth of the educated underclass (including elite overproduction in higher education) and more bulls*t jobs, the privatization of public higher education, the proliferation and consolidation of online program managers (OPMs) working for name brand and lesser known schools, non-profit subprime colleges, robocolleges, continued grade inflation, and the fall of the US federal student loan program. In 2020 and 2021, higher education also received three massive federal bailouts.  

Larger developments include the resurgence of authoritarianism, the hollowing out of America, and the global climate change crisis.  Despite these glaring existential problems, a looming college enrollment cliff in 2026, and growing dismay by working families, irrational exuberance and false optimism continues among most college business officers and middle-class consumers.  

Will austerity and excesses in the system lead to even more dramatic failures? Will the states and federal government ask for more transparency and accountability of the government funds that keep the system afloat?

What should we be observing in this new phase:  

1. The growth (and power) of the "educated underclass"

2. The effects of student loan debt on working families and social institutions (including religion and the economy) 

3. The state of the student loan forgiveness movement and popular opinion about student loan forgiveness

4. The health of the US Department of Education's Student Loan Portfolio

5. The growth of Online Program Managers

6. The degree that public universities are serving their citizens

7. The amount of money spent on marketing and advertising in higher education

8. Analyses of the FED, big banks, and rating agencies about the K-12 pipeline, higher education, student loan debt, and the growth of the educated underclass 

9. Local, state, and federal responses to "savage inequalities" in the K-12 pipeline, student loan debt, and the growth of the "educated underclass"

10. The rise of authoritarianism/neofascism in US education and the US as a whole  (e.g. mass surveillance, anti-intellectualism, hate crimes)

11. In deference to Bryan Alexander and his upcoming book "Universities on Fire" I must include global climate change as a phenomenon that must be observed and dealt with.  Failure to address this existential problem makes the other issues irrelevant.  

References

• Lawsuit alleges top colleges illegally collude to limit financial aid (Ivana Saric, Axios)
• USC Pushed a $115,000 Online Degree. Graduates Got Low Salaries, Huge Debts (Lisa Bannon and Andrea Fuller, WSJ)
• The Semi-Rich and Elite Overproduction (Matthew Stewart, Peter Turchin and Higher Ed)
• Student Debt From Private Lenders Hits All-Time High (Alexis Gravely, Inside Higher Education)
• Students Are Living In Hotels & Cars Due To Lack Of Campus Housing In California (Dantee Ramos)
• The Grade Inflation–College Completion Connection (Elizabeth Redden, Inside Higher Education)
• Low Literacy Levels Among U.S. Adults Could Be Costing The Economy $2.2 Trillion A Year (Forbes)
• Colleges See Best Gains in Decades Thanks to Private Investments (Janet Lorin, Bloomberg)
• Enrollment algorithms are contributing to the crises of higher education (Alex Engler, Brookings Institution)
• A Generation of American Men Give Up on College: ‘I Just Feel Lost (Douglas Belkin, WSJ)
• The Great Master’s-Degree Swindle (Kevin Carey, CHE)
• The Number of Colleges Continues to Shrink (Doug Lederman, Inside Higher Education)
• Pennsylvania system board votes to merge 6 institutions into 2 (Jeremy Bauer-Wolf, Higher Ed Dive)
• ‘Financially Hobbled for Life’: The Elite Master’s Degrees That Don’t Pay Off (Melissa Korn and Andrea Fuller, WSJ)
• Spring Numbers Show 'Dramatic' Drop In College Enrollment (Elissa Nadworny, NPR)
• States Step In To Stop Colleges Holding Transcripts Ransom For Unpaid Bills (Jon Marcus, NPR)
• Bond Boom Comes to America’s Colleges and Universities (Juliet Chung and Melissa Korn, WSJ)
• Colleges Could Lose $183 Billion During Pandemic (Emma Whitford, IHE)
• A Brutal Tally: Higher Ed Lost 650,000 Jobs Last Year (Dan Bauman, CHE)
• Tempering the Baby Bust Financial Hit (Phillip B. Levine, IHE)

This article was updated November 11, 2021 to include a link to elite overproduction in higher education and on January 26, 2022 to include a list of recent references.